Mitsubishi shares hit a record low after the fuel cheating disclosure image

The recent confession made by Mitsubishi around the manipulation of fuel figures on certain models made its shares fall to a record low, also triggering a big scandal in Japan.

Mitsubishi has confessed this week that it submitted some unrealistically-low fuel consumption figures to the Japanese regulators, a manipulation that affects around 625,000 locally sold cars. In fact, the company has been caught altering its fuel ratings by Nissan, which sells some models made by Mitsubishi. Since the scandal broke out, the automaker lost a third of its market value, or 2.5 billion dollars. However, the financial repercussions are expected to be greater than that, as Mitsubishi will probably face some heavy fines and it will probably also have to compensate the affected customers. In addition, other expenses will include any costs related to replacing some parts, further compensation to Nissan, not to mention the impact on worldwide sales.

The scandal is the second largest one for Mitsubishi in recent years, with the automaker admitting 15 years ago it hid some defects for decades. Japan’s transport ministry has ordered the company to submit a full report on test manipulation within a week and has also imposed on Japanese automakers to submit fuel economy test data by May 18. “We want the whole picture of the misconduct clarified as soon as possible, and want a strict response and the safety of automobiles to be ensured,” Chief Cabinet Secretary Yoshihide Suga, the government’s spokesman, said.

 

Via Reuters