Mitsubishi Motor’s market value has nosedived nearly 50 percent since the company publicly admitted on April 21 to tampering with its fuel economy tests to make its vehicles appear more fuel-efficient.
The Japanese automaker has not yet commented on whether it will issue a forecast on vehicle sales for the year ending March 17. So far the company has lost more than 42 percent, or $3.2 billion, of its market value. Company officials are hesitant to announce earnings forecast due to uncertainty over how the fuel emissions test tampering will affect the bottom line.
This new fuel-emission cheating scandal involving Mitsubishi has so far managed to fly under the media’s radar, as well as that of many U.S. regulators, especially given the magnitude of the Volkswagen fuel emission cheating scandal that broke in September.
Gina McCarthy, director of the Environmental Protection Agency (EPA), has been relatively mum on the news as well, aside from telling an audience Thursday during an environmental summit at George Washington University that she advises countries on how best to ferret out companies that cheat fuel emission tests. McCarthy did not mention Mitsubishi by name during her talk.
The issue has certainly not gone unnoticed by Japan’s government. Japanese agents descended Thursday on Mitsubishi’s Okazaki office one day after the company admitted to essentially defrauding its customers by tinkering with the fuel emission tests of hundreds of thousands of vehicles.
The company, reports show, cheated fuel tests by varying the weight loads placed above the tainted vehicles’ wheels, according to local reports. Employees tinkered with air resistance and “rolling resistance” of vehicle tires to alter the emissions data for 625,000 vehicles, including minivans, trucks, and passenger cars.
The decision affected more than 600,000 Mitsubishi vehicles. Many of the vehicles were taxed at a lower rate if they met fuel emissions standards.
According to local Japanese reports from the Yomiuri newspaper, quoting unidentified sources, Mitsubishi admitted Sunday to not conducting vehicle test runs at all in some instances after making significant changes to certain vehicles.
Instead of initiating a new set of tests, the car maker simply estimated air resistance via calculations. The Japanese government’s transport industry requires the automotive industry to conduct tests after each time it makes alterations and changes to its vehicles, according to Yomiur’s sources.
News of the Mitsubishi’s manipulation came a few days after Volkswagen finally reached an agreement on how best to rectify its fuel emission cheating scandal.
VW took an $18 billion charge allowing it to comply with an agreement it hammered out by the company and the EPA, which mandates it either buyback, or recall and fix all of the vehicles tainted by so-called cheat devices on more than 600,000 vehicles.
The Germany-based company initially put aside $7.5 billion to cover the cost of the fixes.
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