Mitsubishi Cheating Compensation Tops $600m

Mitsubishi Motors has raised its charge for compensating customers affected by a fuel economy scandal to $620m (£435m).

The embattled company said it was to book a $480m "special loss" for its current financial year - on top of $140m already announced for owners of cars affected by the cheating.

The scandal - uncovered by Nissan in April - covers every vehicle it sold in Japan and made for Nissan there since 1991 - with some owners reportedly set to receive a maximum $1,000 (£700) each.

Mitsubishi (LSE: 7035.L - news) found staff had falsified mileage tests to make the cars seem more fuel efficient than they were.

The inquiry uncovered a culture of poor supervision amid pressure to comply with tough domestic tax regimes aimed at boosting sales of smaller cars.

No vehicles sold outside of Japan are believed to be affected, though investigations are continuing.

Mitsubishi said the additional charge also covers payments to Nissan, which is taking a 34% stake in the troubled business at a cost of $2.2bn (£1.5bn), money that Mitsubishi will need as it faces the wrath of regulators in addition to irate customers.

For Nissan, Mitsubishi has an attractive domestic manufacturing and development set-up which is underutilised given sharp falls in sales in the wake of the scandal.

Its president,Tetsuro Aikawa, is to step down from the role in a week's time.