Japanese automaker Mitsubishi Motors Corp plans to compensate customers in a bid to limit the fallout from a fuel-efficiency cheating scandal, the Nikkei reported yesterday.
Authorities raided the company’s office on Thursday after the company admitted it had falsified efficiency data for hundreds of thousands of vehicles.
Mitsubishi Motors shares plunged more than 40 percent in the three days after the news emerged, their worst hat-trick of losses since the company listed in 1988.
The scandal has raised questions about the Japanese automaker’s future, after German giant Volkswagen AG posted its first loss in 20 years last year because of the fallout from its own huge emissions-rigging scandal.
Mitsubishi Motors plans to offer to cover the extra fuel costs incurred by vehicle owners, because their engines were less efficient than advertised, the Nikkei reported.
The move aims to “appease angry customers’ non-stop inquiries” and prevent an “exodus” of buyers, the Japanese business daily said, without giving its sources.
Mitsubishi Motors has said it will halt production of more than 600,000 affected vehicle models — mini-cars sold in Japan, including some made for rival Nissan Motor Co.
However, that has not been enough to stave off criticism of the company, which was brought to the brink of bankruptcy in 2004 over revelations it covered up defects in its vehicles.
Experts have said the firm prized unwavering employee loyalty even more than most Japanese companies and that might have been a key issue behind the rigged tests.
Japanese Minister of Land, Infrastructure, Transport and Tourism Keiichi Ishii echoed those fears.
“I cannot help but have doubt about the company’s basic attitude towards compliance. This is extremely regrettable,” he told reporters on Friday.
Ishii also said the government will review testing done by domestic automakers as it awaits the results of an internal probe by Mitsubishi, due next week.
While the scandal has sparked questions about its survival, it was unlikely a beaten-down Mitsubishi would be snapped up by one of its bigger rivals, said Christopher Richter, a Tokyo-based auto analyst at brokerage CLSA.
The automaker was born from the vast Mitsubishi group of companies, which are still loosely connected through cross-shareholdings and historical ties.
“In the past, consolidation has been talked about for Mitsubishi or streamlining the businesses, [but] there has been a lot of resistance from other companies within the Mitsubishi group,” Richter said. “They have to be factored in any calculation about consolidation.”
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