Mitsubishi Motors fuel-cheating scandal widens on fresh admission

TOKYO, Japan – Japan’s Mitsubishi Motors said Tuesday, April 26, it has been using dodgy fuel-efficiency testing for 25 years and admitted it has no idea of the scale of the cheating that has plunged it into crisis.

The latest twist will likely drive speculation that its misconduct stretched to vehicles sold overseas, and send the number of affected vehicles soaring from the more than 600,000 already known about.

The embarrassing revelations have raised questions about Mitsubishi’s future – its Tokyo-listed shares have plummeted by about half since the story broke on Wednesday with billions of dollars wiped off the company’s market value.

It has also pointed to a broader problem in the global car industry as Volkswagen struggles with a huge emissions scandal and regulators probe other automakers’ pollution and fuel-efficiency standards.

“For the domestic market, we have been using that method since 1991,” Mitsubishi vice president Ryugo Nakao told a Tokyo news briefing on Tuesday.

“But we don’t know the number of models” affected in total, he added.

The company, which said Tuesday it was appointing an outside panel of experts to investigate the problems, previously said its flawed testing dated back to 2002.

Mitsubishi officials said the automaker did not change its fuel-efficiency testing method when the Japanese government ordered an updated system years ago.

Last week, Mitsubishi also admitted unnamed employees manipulated testing figures to make some of its cars seem more fuel-efficient than they were in reality.

Tetsuro Aikawa, the company’s president, has acknowledged that the crisis would damage firm finances and told Tuesday’s briefing: “I can only apologize.”

So far, the scandal has affected vehicles sold in Japan involving 4 mini-car models, including cars made for rival Nissan, which discovered the faulty figures.

Japan’s number-two automaker has said it would halt sales of the affected mini-cars, but added that it had no immediate plans to change its business relationship with Mitsubishi.

Mini-cars, or kei-cars, are small vehicles with 660cc gasoline engines that are hugely popular in the Japanese market, although they have found little success abroad.

‘Past problems’

Japan’s leading Nikkei business daily said Tuesday Mitsubishi had been supplying false results on more models than previously reported.

Transport ministry authorities raided the company’s office last week, about a decade after the automaker was pulled back from the brink of bankruptcy when it was found to have covered up a series of vehicle defects.

Bailouts by the Mitsubishi group companies saved the automaker, which had hidden flawed axles that could lead to wheels coming off vehicles.

It was unclear if some of the automaker’s top shareholders, including Mitsubishi Heavy Industries (MHI), would come to its rescue again as it faces the likelihood of huge fines and lawsuits.

“Mitsubishi Motors has come a long way since past problems, so this is very disappointing,” MHI president Shunichi Miyanaga told reporters in Tokyo Monday.

“We need to think about the brand image of the Mitsubishi Group, its social responsibility and accountability for performance.”

Analysts have previously said that a key driver in the cheating may have been Mitsubishi’s corporate culture, which prizes unwavering loyalty to the company even more than many Japanese firms.

Mitsubishi reportedly plans to compensate customers in a bid to limit the fallout from the scandal.

On Friday, German carmaker Volkswagen said its emissions-rigging crisis pushed it into its first annual loss for more than 20 years, and the final total costs are still not calculable.

Also Friday, Germany’s transport minister Alexander Dobrindt said a probe sparked by Volkswagen’s emissions-rigging scandal found irregularities at 16 car brands, including Mercedes, France’s Renault, Alfa Romeo, Chevrolet, Hyundai, Jaguar, and Nissan.

South Korean automakers Hyundai and Kia in 2014 agreed to pay $100 million to settle a US government investigation into exaggerated fuel efficiency on 2012 and 2013 car models sold in the United States. – Natsuko Fukue, AFP / Rappler.com