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Mitsubishi offices raided after massive fuel efficiency scandal

Officials from the Japanese Transport Ministry descended on the Mitsubishi research and development centre in Nagoya earlier this morning.

Image: Shutterstock/Vytautas Kielaitis

JAPANESE TRANSPORT MINISTRY officials raided a Mitsubishi Motors office this morning following the shock admission by the automaker that it falsified fuel-efficiency tests in more than 600,000 vehicles.

The officials descended on a research and development centre in the city of Nagoya, and the government may slap the under-fire company with fines over the scandal, local media said.

“This has critically damaged consumers’ trust and it won’t be tolerated,” top government spokesman Yoshihide Suga said today. “It’s an extremely serious issue.”

Mitsubishi’s Tokyo-listed shares looked set to plunge about 20%, but were untraded owing to an overwhelming number of sell orders.

The firm plunged 15% yesterday before it confirmed reports about its misconduct, which saw unnamed employees rig tests to make cars seems more fuel-efficient than they were.

Mitsubishi said it would halt production and sales of the affected vehicle models – mini-cars sold in Japan including some made for rival Nissan – and warned that the number of affected vehicles would likely rise.

The embarrassing revelation follows a massive pollution-cheating scandal at Volkswagen that erupted in September and which the German giant is still struggling to overcome.

Mitsubishi’s top executive conceded yesterday that the brewing crisis would take a bite out of the automaker’s bottom line, as it widens its probe to cars that it sold overseas.

“This is not a simple problem and we need time” to assess the impact, Mitsubishi president Tetsuro Aikawa told a news briefing.

“But I’m sure there will be an impact. The damage will be big.”

The rigged figures were discovered after Nissan found inconsistencies in fuel-economy data and reported it.

Japan’s number-two automaker 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 have found little success abroad.

Mitsubishi sold more than a million vehicles at home and overseas in its latest fiscal year.

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The collapse of Mitsubishi’s stock yesterday was its biggest one-day plunge since 2004.

At that time, Mitsubishi was struggling to launch a turnaround as it teetered on the edge of bankruptcy, hit by a lack of cash and a series of huge recalls linked to serious defects.

German titan Volkswagen has been hammered by the global scandal that erupted when it emerged that it had installed emissions-cheating software in 11 million diesel engines worldwide.

The costs of the scandal are still incalculable but are expected to run into several billions of dollars as a result of fines and lawsuits.

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.

- © AFP, 2016

Read: VW set to buy back cars in the US but won’t be launching scheme in Ireland

Also: “We are sorry and we will fix this, at our expense” – the head of Volkswagen Ireland has been getting a grilling

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