Mitsubishi admits mileage fraud and gets charged $480 million image

Mitsubishi Motors, sixth biggest Japanese carmaker, has admitted to falsifying test data for 20 car models it has sold in the past ten years.

The majority-owned by Nissan company stated that it would book a $480 million charge this fiscal year to repay buyers after the brand manipulated its fuel-efficiency ratings.

In a statement released today, the Japanese carmaker said that it used “desktop calculations” and fake data on the models sold from 2006 up to this year. The brand added that it lowered resistance readings on purpose to provide better results in the fuel economy department.

This latest admittance to fraud is only adding to the issues the company is going through, as Mitsubishi has previously admitted to overstating the fuel economy of its minicars and to conduct improper tests on its existing models. Following the scandal, two top executives left Mitsubishi Motors, earnings were cut and the company had to turn to Nissan Motor Co. for a bailout in the shape of a $2.2 billion stake purchase.

Carlos Ghosn, Nissan’s CEO, is confident that Mitsubishi Motors will make it through this scandal in Japan and increase the carmaker’s presence in emerging markets from Southeast Asia like Thailand, Indonesia and Philippines. Nissan announced that the checks would be signed in August that that the deal would be finalized in October this year.

The findings from the current investigation into Mitsubishi’s mileage fraud will be released around the end of July with three former prosecutors working on the case. Before the company’s statement of fraud, Mitsubishi Motors shares witnessed an increase of 6.4% in Tokyo trading, the biggest rise in a month the company had scored.