Mitsubishi admits it falsified fuel milage data. Now what? (+video)
The automaker says employees overinflated tires during testing to give false fuel economy statistics. Mitsubishi executives have apologized to customers, and say they are seeking to make things right.
Koji Sasahara/AP Photo
Mitsubishi Motors stock prices plunged today after the Japanese company admitted to releasing false fuel economy statistics for more than half a million of its mini-cars.
The minicar models in question include the eK Wagon, the eK Space, which are Mitsubishi models, and the Dayz and Dayz Roox models that the company manufactures for Nissan. These models with tiny engines and claims of great mileage have been popular in the company's home country of Japan, but not as much in other markets.
This scandal is just the latest in a series that have tarnished the reputation of the auto industry raising questions and concerns over regulations and reporting standards and how much responsibility automakers have over the actions of their employees.
"The wrongdoing was intentional," said Mitsubishi Motors president Tetsuro Aikawa during a press conference today. "It is clear the falsification was done to make the mileage look better. But why they would resort to fraud to do this is still unclear."
Mr. Aikawa added that he is ashamed of the falsification, and that he feels responsible.
Mitsubishi says it has sold 157,000 of its own minicar models, and has shipped 468,000 vehicles to Nissan.
The duplicity was discovered when Nissan found deviations between its own fuel economy findings and those reported by Mitsubishi, according to a press release.
Mitsubishi then conducted an internal investigation after the Nissan revelations. Their investigation uncovered the fuel economy falsification. Mitsubishi also stated that the company's testing procedures differed from requirements under Japanese law.
The employees who faked fuel economy stats likely did so by overinflating tires during testing, in order to give a falsely high fuel economy rating, according to the BBC. Such procedures likely boosted fuel economy ratings for the mini-cars by 5 to 10 percent, to about 71.5 miles per gallon.
Mitsubishi officials say they were unaware that employees had faked data.
But the lack of oversight has raised consumer concerns once again about the apparent lapses in global regulations throughout the auto industry.
In the early 2000s Mitsubishi admitted to covering up a manufacturing scandal that saw fuel tanks fall off cars, brakes malfunction, and faulty clutches. In 2014, automakers Hyundai and Kia both admitted to artificially inflating fuel economy statistics for cars sold on the US market. Most recently, Volkswagen was outed for a massive diesel emissions cheating scandal, during which it admitted to installing technology in 11 million vehicles that allowed those cars to cheat emissions testing protocol around the world.
"I feel the difficulty of ensuring thorough awareness about compliance among all employees," said Aikawa during the press conference Wednesday.
Nevertheless, both Mitsubishi and Nissan say that they work to make things right for customers who were deceived by false fuel economy reports. Mitsubishi stated that both companies plan to discuss compensation for the issue, and that production of the impacted models has stopped completely.
"We express deep apologies to all of our customers and stakeholders for this issue," wrote Mitsubishi in a press release.
Meanwhile, Mitsubishi stock has fallen 15 percent since the company's announcement earlier Wednesday.