Mitsubishi Motors to post $480M loss over fuel-cheat scandal

TOKYO, Japan – Mitsubishi Motors said Friday, June 17, it will post a $480 million special loss for the current fiscal year to pay compensation to customers over years of cheating on fuel-economy tests.

Mitsubishi first admitted in April it had been falsifying the tests, manipulating data to make cars seem more efficient than they were.

Since the scandal emerged, its sales in Japan have slumped and the company last month said its president would resign.

The scandal – reported to cover almost every model sold in Japan since 1991 – also includes mini-cars produced by Mitsubishi for Nissan as part of a joint venture.

“We will post a special loss of 50 billion yen ($480 million)” for the year to March 2017, the automaker said in a statement, “as costs for payments to customers of our company and Nissan Motor.”

It has already booked 15 billion yen in payments to customers for the year ended in March.

It was Nissan that first uncovered problems with the fuel economy data, but Mitsubishi has said the company had no part in the cheating.

Yokohama-based Nissan last month threw a lifeline to Mitsubishi as it announced plans to buy a one-third stake in the crisis-hit automaker for $2.2 billion, forging an alliance that will challenge some of the world’s biggest auto groups.

For the past year to March, Mitsubishi posted a net loss of 72.6 billion yen and operating profit of 138.4 billion yen on sales of 2.27 trillion yen.

Following the scandal, it has been slow to give a full-year earnings forecast for the current fiscal year, with the company now “estimating other (future) costs” related to the cheating, Mitsubishi said in the statement. – Rappler.com