Mitsubishi Cheated on Test TOO!

Mitsubishi Motors’ facility was raided by the Japanese Transport Ministry on Thursday, following the carmaker’s confession to overstating the fuel efficiency of more than half a million of its cars. The issue came to light when Nissan Motor, which markets Mitsubishi-made models, the Dayz and Dayz Roox, discovered discrepancy in test results; the other models that make up the 625,000 cars affected are Mitsubishi’s eK Wagon and eK Space. The production of these models, which were sold exclusively in Japan, has been halted.

This latest fuel-efficiency data-rigging news comes when the Volkswagen emissions scandal has not yet even died down. Mitsubishi’s method is less clever but much simpler – it seems that the automaker had over-inflated the tyres during fuel efficiency tests, which makes the car appear to use less fuel than it actually does.

Whether lawsuits and big payouts are in the future for Mitsubishi remains to be seen, though it is quite certain to be so, but karma has already started working. The company’s shares began sliding immediately after news broke, hitting a record low, and the stock’s value went down by a third – that’s US$2.5 billion - within two days. A JPMorgan analyst, Akira Kishimoto, estimates that the cheating could cost the company more than US$450 million, which would include compensation to customers and Nissan.

Like many automakers nowadays which like to associate their brands with the environmentally friendly tag, and boasting high fuel economy numbers, Mitsubishi had done the same. But, like Volkswagen, the automaker’s reputation has been severely affected. However, it’s not the first time that Mitsubishi has made headlines for the wrong reasons – in the early noughties, the company also admitted to covering up about defects in its cars since 1977; investigation found that the carmaker had secretly repaired cars without reporting the issues to the authorities.

With laws that are becoming increasingly stringent, and customers who prefer vehicles which can give them better bang for their buck, especially with regards to petrol costs, car companies have been trying to outdo one another with (over)statements about their cars’ fuel economy. Now that two leading automakers have been found to have cheated, it will not be surprising if their rivals are later found doing the same. If they were and we were them, we’d start the process of covering up now, while the authorities are distracted (just being honest).

Mitsubishi is required to submit a full report, within a week, to the Transport Ministry. More details about the cheating should emerge following the completion of the report.

image: Reuters