Mitsubishi Motors says it used non-compliant mileage data for 25 years

TOKYO - Reuters

REUTERS photo

Mitsubishi Motors Corp said it had used fuel economy testing methods that were not compliant with Japanese regulations for 25 years, much longer than previously known, and would set up an external committee to investigate the matter.

Japan’s sixth-largest automaker has lost half of its market value - some $3.9 billion - since it admitted last week that it overstated the fuel economy of four domestic mini vehicle models, including two produced for Nissan Motor Co.

The automaker’s admission that more models may not comply with Japanese standards has sparked fears of ballooning compensation costs and fines. The U.S auto safety regulator is also seeking information, while Japanese authorities have raided one of its research and development facilities.

Mitsubishi said the committee of external experts will report the results of its investigation in three months.

The automaker has said that it had been compiling data for fuel economy tests using U.S. standards, where higher-speed, highway driving is common, rather than Japanese standards, which are set to reflect driving in the city, where the need to stop more often means more fuel is used.

The company said on April 26 that it had been submitting non-compliant data to Japan’s transport ministry since 1991. Mitsubishi had previously only said such non-compliance went back to at least 2002.

The transport ministry announced earlier in the day that it had set up a task force to examine how other automakers submit fuel economy data. Last week it ordered other domestic automakers to submit fuel economy test data by May 18.

The misconduct has revived memories of a scandal more than 15 years ago in which Mitsubishi admitted to systematically covering up customer complaints for more than 20 years, bringing the company close to collapse.

Back then, it was helped by a bailout from other Mitsubishi Group companies. But now senior officials at other Mitsubishi firms say would be difficult” for them to help the car maker as they face their own financial squeeze, as well as calls to put shareholder returns above ties with the former Mitsubishi business empire.

On April 26, Mitsubishi Motors shares ended down nearly 10 percent.