As a part of the reimbursement costs that will total at least $600 million for its overstating of mileage readings, Japan’s Mitsubishi Motors Corp said it plans to give owners of four mini vehicles close to $1,000 in compensation.

Nissan Motor Co has had to take a one-third controlling stake in the embattled automaker following the mileage scandal which the company has blamed on pressure to deliver competitive readings and poor supervision of testing processes.

The planned compensation costs were not expected to hinder its talks with Nissan, Mitsubishi CEO Osamu Masuko told reporters.

Allegations of deliberately overstating the fuel economy for some 625,000 minivehicles including two models produced for Nissan were admitted to by the automaker in April. Minivehicles are sold mostly in Japan where they get preferential tax treatment and have engines of up to 660cc.

Analysts however had estimated that the  payment per customer for the four models would have been around 46,000 yen to 146,000 yen and the company is paying 100,000 yen. The v are not covered by the payments.

Owners of five other vehicles where improper mileage calculations were used will receive around 30,000 yen ($290) in addition to those models. Mitsubishi said that since the gap between the mileage advertised and actual mileage was much smaller, therefore the compensation was much lower.

In the wake of the scandal, there has been intense and strict scrutiny of Japanese automakers’ mileage calculations. Suzuki Motor Corp was also using wrong methods to calculate mileage for models going back to 2010, found an investigation by the transport ministry.

A 50 billion yen charge in the current financial year through next March would be the result of the compensation-related costs, Mitsubishi said. This is in addition to the 15 billion yen the company put aside in the past business year.

Numbers for some models going back as long as 25 years have been rigged by the company, Mitsubishi has now confirmed.

The Mitsubishi eK Space and eK wagon, as well as the Nissan Dayz and Dayz Roox are the four models for which $1,000 compensation will be offered. The models that would be compensated for target the hotly competitive microcar segment where buyers are largely searching for low prices and high mileage numbers.

It did not rig tests for models sold outside the Japanese market, the company has insisted. But an ongoing outside investigation into the company’s practices is yet to reveal final results.

In addition to the $600 million as compensation for overstating of mileage readings, Mitsubishi could also face additional costs that can include possible fines levied by the Japanese government. Several Mitsubishi offices have been raided for evidence as the investigators have launched a criminal probe.

Mitsubishi President and Chief Operating Officer Tetsuro Aikawa and several other top officials of the company have had to resign following the scandal. However the loss of the carmaker’s independence is the most significant impact of the scandal.

Apart from Mitsubishi, other Japanese automakers that are facing trouble over mileage data include Japanese minicar maker Suzuki. On the other hand in the U.S., General Motors has had to restate mileage on several of its own vehicles and offer compensation to owners.

(Adapted from Reuters and Thedetroitbureau.com)

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