Mitsubishi admits fuel economy data falsification by employees

Japan’s sixth-largest automaker by market value, Mitsubishi, has admitted that its employees falsified fuel economy test data for more than 600,000 vehicles causing its shares to tumble more than 15 percent this morning.

Following the latest incident, the company announced it is stopping production and sales pending when investigations are completed. It also said the incident has been reported to the Japanese transportation ministry. Investigations will be carried out to find out whether data was altered for vehicles sold overseas.

The falsification involved 157,000 of its own brand light passenger cars, eK Space and eK wagon and 468,000 Dayz Roox vehicles produced for Nissan.

The company said it was able to uncover the problem after Nissan observed the inconsistencies in emissions data. Mitsubishi promptly carried out an internal investigation and discovered that figures had been falsified and test did not meet Japanese law.

“We found that with respect to the fuel consumption testing data, MMC conducted testing improperly to present better fuel consumption rates than the actual rates and that the testing method was also different from the one required by Japanese law. We express deep apologies to all of our customers and stakeholders for this issue,” said Tetsuro Aikawa, President Mitsubishi Motors Corps.

The plunge in Mitsubishi Motor’s shares dropped its market value to 721 billion yen or $6.6 billion.

The car maker had struggled for years to win back consumer trust after a scandal in the early 2000s over cover-ups of problems such as failing brakes, faulty clutches and fuel tanks prone to falling off. In 2015, the company sold more than one million vehicles but has less than 1 percent of the market.

The latest incident puts it at risk of damaging growing consumers’ trust in not just Mitsubishi but in car companies’ fuel economy claims. Invariably, the company’s manipulation of tests would further deepen scrutiny of the auto industry after Volkswagen AG’s admission last year that it rigged diesel models with software to meet with US emissions standards. Volkswagen is reported to have set aside 6.7 million euro to pay for the crisis and its shares are down about 30 percent since the scandal was revealed in September 2015.

In late 2014, Hyndai Motor Company and Kia Motors Corporation agreed to pay fines and forfeit emissions credits to settle US claims they overstated mileage ratings. Ford Motors has also lowered ratings for hybrid models between 2013 and 2014.

Mitsubishi President Tetsuro Aikawa and two other executives bowed deeply in apology at a briefing in Tokyo. On the other hand, Nissan has declined comments on the incident but will be discussing compensation with Mitsubishi soon.