Mitsubishi Motors Office Raided Over Fuel Economy Tests

Japanese officials have raided an office of Mitsubishi Motors following the revelation that the carmaker had falsified its fuel economy data.

The officials searched its plant in the central Japanese city of Okazaki.

Mitsubishi has admitted that employees altered data to flatter mileage rates on more than 600,000 vehicles.

A government spokesman said they were treating it as an “extremely serious case” and that it had ordered the company to submit a full report.

The authorities have set 27 April as the deadline for Mitsubishi Motors to hand over the report on the inaccurate testing.

Japan’s chief cabinet secretary, Yoshihide Suga, said: “Based on [the findings from] the raid, and a report from the company, we would like to reveal the extent of the inaccuracies as soon as possible.

“We will deal with the situation in a strict manner and would like to make sure of the safety of cars.”

The raided office is the company’s second largest plant in Japan and is a manufacturing hub as well as a research facility.

Akira Kishimoto, an auto analyst at JPMorgan told Reuters that he estimated the falsification could cost Mitsubishi more than 50bn yen ($450m; £313.8m), including payments to consumers, the costs of replacing parts and compensation to Nissan.

The inaccurate tests involved 157,000 of its own cars and 468,000 vehicles produced for Nissan.

The issue affected models including Mitsubishi’s ek Wagon and eK Space, as well as Nissan’s Dayz and Dayz Roox.

All are “mini-cars” with 660cc petrol engines and are popular in Japan but have found little success in other markets.

Analysis: Karishma Vaswani, BBC Asia business correspondent

The troubles at Mitsubishi Motors are likely to get much worse now that the government has weighed in.

Japan’s transport ministry investigators have raided the research centre of the car-maker’s Nagoya plant, presumably to find out how these fuel-efficiency tests were falsified, and how much bigger the problem might be.

The government says that Mitsubishi has broken the trust of consumers and that it expects a report from the car-firm in the next week.

Estimates for how much this scandal will cost Mitsubishi are thought to be in the hundreds of millions of dollars – but the real damage will be to the company’s brand, still reeling from a defects scandal in the early 2000s.

Shares impact
Shares of Mitsubishi Motors were not traded on Thursday as no buyers could be found to match investors wanting to sell.

Instead, the Tokyo Stock Exchange set an indicated closing price of 583 yen, a 20% drop from Wednesday’s close of 733 yen.

Shares in Mitsubishi had already fallen 15% on Wednesday, when news of the falsified data first emerged.

Scandals
This is the first time that a Japanese car maker has reported misconduct involving fuel economy tests.

Mitsubishi had struggled for years to regain consumer trust after a defects scandal in the early 2000s that covered up problems such as failing brakes, faulty clutches and fuel tanks that fell off vehicles.

In 2014 South Korean car makers Hyundai and its affiliate, Kia, agreed to pay $350m in US penalties for overstating their vehicles’ fuel economy ratings. They also resolved claims from car owners.

Mitsubishi’s announcement follows on from the Volkswagen’s emissions scandal last year, in which it was found to have cheated diesel emissions tests in the United States and elsewhere.

VW is recalling millions of cars worldwide as a result of the scandal and has set aside €6.7bn (£4.8bn) to cover costs.

BBC