Although the admission has wiped off $1.2 billion from its market capitalization, with the admission the company can now begin the process of rectifying the faults. Even in VW’s case, investors have wanted the company to turn a new leaf, fix responsibility for the mistake and move on.
With Mitsubishi Motors admission that it falsified the fuel economy test data for its vehicles to give a feel good factor to its emission levels, $1.2 billion of its market capitalization has been wiped off with its shares slipping by 15%.
The admission was made public by Tetsuro Aikawa, Mitsubishi Motor’s president. Mitsubishi Motor Corp is the 6th largest automobile manufacturer in Japan by market value. He bowed in apology at a news conference event in Tokyo, in what has been termed as the biggest scandal in Mitsubishi since a decade.
Its shares slumped by 15% to 733 yen, its biggest one-day drop in nearly 12 years.
Earlier in 2000, Mitsubishi Motors Corps had admitted to covering up customer complaints related to safety records. Four years later, it admitted to even bigger problems going back decades thus bringing about Japan’s worst automotive recall.
The current admission revolves around the test manipulations involving 625,000 vehicles produced since mid-2013. These include 468,000 cars it made for Nissan Motor and its eK mini-wagon.
It has now said, it would stop selling those models and has set up an independent inquiry panel to look into the issue.
In the previous year, Mitsubishi Motors sold over 1 million cars.
Mitsubishi Motors is the first Japanese automobile manufacturer to admit misconducts revolving around its vehicle’s fuel efficiency tests after the U.S EPA’s discovered that German automobile giant Volkswagen’s cheated on its diesel emission tests.
In 2014, South Korean car manufacturer, Hyundai and its affiliate Kia Motors Corp agreed to pay $350 million in penalties to the U.S. government after they were caught overstating its vehicles fuel economy ratings.
They duo also had to resolve claims from car existing vehicle owners.