Mitsubishi Admits Faking Fuel Economy Tests

Japanese carmaker Mitsubishi Motors has admitted manipulating fuel economy tests on some of its own brand and Nissan cars to make the results more favourable.

The company spoke up after initial reports that vehicles had failed testing sparked the biggest one day fall in its share price for 12 years - losing 15%, or $1.2bn (£835m), of its market value by the close of trading.

In an announcement that bore striking similarities to the emissions-testing scandal at German rival Volkswagen and reignited questions on the quality of world testing regimes, Mitsubishi (LSE: 7035.L - news) confirmed employees falsified test data for several models.

It (Other OTC: ITGL - news) involved 157,000 of its own brand light passenger cars and 468,000 vehicles produced for Nissan, which had no knowledge of the cheating.

Mitsubishi said all 625,000 cars were built since mid-2013.

Its UK managing director, Lance Bradley, said: "I would like to reassure everyone that there is no evidence to suggest that UK or European models are affected.

"Mitsubishi has immediately halted production and sales of the four cars, which are the Mitsubishi eK Wagon, Mitsubishi eK Space, the Nissan Dayz and Nissan Roox, which are manufactured for Nissan by Mitsubishi.

"The cars in question are only sold in the Japanese domestic market."

At a news conference in Tokyo, Mitsubishi president Tetsuro Aikawa bowed in apology and told reporters the wrongdoing came to light because Nissan alerted it to inconsistencies in emissions data.

He admitted the test involved was "different" from one required by Japanese law and profits would take a hit.

It is not the first time Mitsubishi's reputation has been tarnished.

It struggled to win back consumer trust after a scandal in the early 2000s over cover-ups of problems such as failing brakes, faulty clutches and fuel tanks prone to falling off in problems dating back to the 1970s.

Professor Andre Spicer, Director of The Centre for Responsible Enterprise at Cass Business School said: "The Mitsubishi Motors announcement shows that manipulating emissions data was not limited to Volkswagen (LSE: 0P6N.L - news) , and as many thought, is a practice more widespread throughout the industry."

VW is facing an incalculable bill for the fitting of emissions-cheating software in 11 million vehicles, including 1.2 million sold in the UK.

South Korean firms Hyundai and Kia are two brands to have already been penalised in the US for overstating fuel economy ratings (Other OTC: UBGXF - news) .