Mitsubishi admits cheating on fuel-economy tests

TOKYO -- In the latest scandal to hit the automobile industry, Mitsubishi Motors said Wednesday that it had cheated on fuel-economy tests for an ultrasmall car it produces in Japan. The company acknowledged that its engineers had intentionally manipulated evaluations.

The cheating affected about 620,000 cars sold in the Japanese market starting in 2013, Tetsuro Aikawa, Mitsubishi's president, said at a news conference.

But the problem could stretch beyond that make of car. Aikawa said that the same testing method, which was in violation of Japanese standards, was used on oth

er models in the country and that Mitsubishi was investigating whether fuel-economy ratings for other lines had been exaggerated as a result.

"It has become clear that improper testing methods were used to improve the appearance of fuel efficiency," Aikawa said. Company executives called the manipulation of tests on the microcar, called the eK, "intentional." Automakers' reports of fuel economy and pollution ratings have come under especially close scrutiny after the scandal at Volkswagen last year.

Mitsubishi's reputation has been battered by scandal before. In 2000, the company admitted that it had been hiding reports on vehicle defects for more than two decades. The news contributed to a sales plunge of nearly 50 percent and nearly pushed the automaker into bankruptcy.

The revelation of cheating put the fuel ratings of other Mitsubishi vehicles under scrutiny. Shares in Mitsubishi fell 15 percent Wednesday after the company released a brief statement saying it had engaged in "improper" fuel-economy reporting. It disclosed the details after the market closed.

The cheating at Mitsubishi appears to have been exposed by an unexpected source: another Japanese carmaker, Nissan Motor.

Mitsubishi manufactures the eK and sells it at dealerships in Japan. But it also supplies versions of the car to Nissan, which markets them under a different name, the Dayz. Nissan, a larger company with a more extensive dealer network, actually sells more of the vehicles than Mitsubishi does.

Such arrangements are increasingly common in the global automobile industry, as manufactures pursue greater scale in an effort to lower costs. And for smaller manufacturers like Mitsubishi, whose sales of 1.2 million vehicles a year make it only Japan's sixth-biggest carmaker, they can be financially indispensable.

Nissan took over development and design work on the eK and Dayz last year. It was then, Aikawa said, that Nissan's engineers noticed the discrepancy in the published fuel rating -- ostensibly an impressive 25 to 30 kilometers per liter, or 60 to 70 mpg, depending on the version -- and confronted Mitsubishi.

This story was originally published April 20, 2016 at 11:53 PM with the headline "Mitsubishi admits cheating on fuel-economy tests ."