Mitsubishi shares plunge after false fuel economy test data admission
Shares in Mitsubishi have plunged after it admitted to falsifying fuel economy test data, as City analysts warned it could face a bill of up to 450 million euro (£354 million) as a result.
The Japanese car manufacturer saw shares plummet 15% in Tokyo - its biggest one-day fall - as it revealed inaccurate tests had been carried out on more than 600,000 vehicles.
Joe Rundle, head of trading at ETX Capital, said it could end up costing Mitsubishi hundreds of millions of pounds.
He said: "At the last calculation, VW has set aside 6.7 billion euro (5.2 billion) for around nine million cars affected, which works out at roughly 750 euro (£590) per vehicle. Therefore, we could reasonably assume that this will cost Mitsubishi around 450 million euro (£354 million), if costs were incurred at the same rate.
"But the real question is really how far this scandal goes - Mitsubishi makes around one million cars a year and this has been going on since mid-2013. If every car were affected the bill could be closer to two billion euro (£1.5 billion).
The company said the bogus tests had been made on four mini-car models and impacted 157,000 built for Mitsubishi and 468,000 for Nissan.
It said its testing method, which is different to the one required by Japanese law, had also been used on other Mitsubishi cars manufactured for the Japanese market.
The announcement is the latest scandal to hit the automotive industry after Volkswagen admitted using software to allow diesel vehicles to cheat emissions tests.
"There is no suggestion yet that the problem affects cars sold in the UK or Europe - but if the VW fiasco teaches us anything it's that the scale of the wrongdoing can be much more than appears at first sight," Mr Rundle added.
The car manufacturer said Mitsubishi and Nissan had stopped producing and selling the "applicable cars" and would begin discussing compensation.
The four models are the Mitsubishi eK Wagon and ek Space and the Nissan Dayz and Dayz Roox.
Mitsubishi said it had "conducted testing improperly to present better fuel consumption rates than the actual rates, and the testing method was also different from the one required by Japanese law".
It added: "Taking into account the seriousness of these issues, we will also conduct an investigation into products manufactured for overseas markets."
Some 22,693 new Mitsubishi cars were sold in the UK last year, according to the Society of Motor Manufacturers and Traders. This represents 0.9% of the UK market.
Lance Bradley, managing director of Mitsubishi Motors in the UK, said: "I would like to reassure everyone that there is no evidence to suggest that UK or European models are affected."