Jun 22, 2016

    Mitsubishi to post loss over mileage scandal: Report


    MITSUBISHI Motors expects to incur a net loss this financial year over its mileage cheating scandal, hurt by compensation costs and a slide in vehicle sales, Kyodo news agency reported yesterday.

    The automaker said last week it planned to give owners of four minivehicles close to US$1,000 (S$1,340) in compensation for its overstating of mileage readings, part of reimbursement costs that will total at least US$600 million.

    Mitsubishi, which has said it expects a charge of 50 billion yen (S$642 million) this business year due to compensation costs, did not comment.

    It admitted in April to overstating the mileage on four of its minivehicles, including two models it produced for Nissan Motor.

    The scandal, which the company has blamed on pressure to deliver competitive readings and poor supervision of testing processes, has led to plans for Nissan to take a one-third controlling stake in the embattled automaker.

    Separately, Japan's government said sales of Mitsubishi vehicles with overstated mileage levels could resume.

    Government tests had showed that fuel economy for the minivehicles was on average 11 per cent lower than their advertised readings but the transport ministry said this would not lead to change in their vehicle classification.