Mitsubishi shares fall amongst ongoing fuel economy test probe

Mitsubishi Motors's disclosure that it manipulated fuel-economy tests risks putting the Japanese carmaker back in a familiar position: needing help from Mitsubishi group companies to stay in business.

President Tetsuro Aikawa bowed in apology on Wednesday before saying the fuel efficiency of 625,000 minicars had been exaggerated by as much as 10 per cent.

Mitsubishi Motors sank by its daily limit to 583 yen at the close in Tokyo trading. A bigger issue may still lie in store: the company has been testing passenger cars using a method not compliant with Japanese standards since 2002, according to Aikawa.

While the company said it’s unclear whether the flawed method enhanced or reduced fuel economy, further revelations that ratings have been exaggerated may overwhelm the automaker, which has the lowest level of cash among its Japanese peers.

The carmaker required two rounds of bailouts more than a decade ago from Mitsubishi group companies to survive a scandal involving a cover-up of deadly defects.

“Since the cover-up of recalls in the 2000s, we have tried to reinforce compliance within the company, but a compliance sense still hasn’t penetrated to every employee,” Aikawa said.

“I deeply understand how difficult it is to strengthen compliance, and I think this is a very shameful issue.”

Chief Cabinet Secretary Yoshihide Suga said manipulating test data is an "extremely serious" issue.

The government has been inspecting Mitsubishi Motors's plant and technical centre in central Japan's Aichi prefecture since Wednesday and plans to disclose details of the misconduct as soon as possible, Suga told a briefing.

- Bloomberg