Mitsubishi Motors Corp., the Japanese automaker admitted that it manipulated fuel economy tests risks This announcement knocked its shares down more than 15% and wiping $1.2 billion off its market value on Wednesday.
As global emissions regulations tighten, fuel economy has become a major factor for environmental- and cost-conscious buyers.
Over the past three years, nearly 625,000 minicars were marketed as being as much as 10 percent more fuel efficient than they were by understating how much air and tire resistance they were actually out on the road. President of Mitsubishi Motors, Tetsuro Aikawa, bowed and apologized Wednesday on the cheating.
We'd like to apologize for the issue," Aikawa said. "The focus right now is to resolve this problem and prevent it from happening again. It could be quite damaging."
Mitsubishi Motors sepnt for years to win back consumer trust after an auto defects scandal in the early 2000s over cover-ups of problems including failing brakes and flawed axles leading wheels to detach.
"I realize that view exists," he said with a shaking voice. "I see how difficult it can be to have compliance consciousness spread among all our employees."
“It’s not the first time for Mitsubishi to have this kind of issues and this definitely won’t help them rebuild their reputation,” said Seiji Sugiura, an analyst at Tokai Tokyo Research Center. “Investors are shocked. Those who didn’t take action today may rush to sell tomorrow.”