Last week, Mitsubishi admitted that it had manipulated fuel economy figures for 625,000 vehicles sold in Japan. But today, the scandal has only grown as the Japanese automaker revealed that it used fuel economy testing methods that were not compliant with Japanese regulations since 1991.
Reuters reports that Mitsubishi was compiling data for fuel economy tests using U.S. standards ( focuses on higher-speed, highway driving) and not Japanese standards (focuses more on city driving).
Since Mitsubishi has come clean about the manipulation last week, the company has lost half of its market value (about $3.9 billion). This has also brought back memories of a scandal Mitsubishi Motors was embroiled in fifteen years ago with covering up customer complaints and vehicle defects for more than 20 years.
Last week, Japanese authorities raided one of Mitsubishi's R&D offices. The Japanese Government has also asked Mitsubishi to submit a report on the manipulation by tomorrow. Meanwhile, U.S. regulators are pressing Mitsubishi to see if any vehicles sold here were involved in the manipulation.
Mitsubishi announced that it has brought in three lawyers to conduct an investigation into the scandal. A report is expected in three months.
Press Release is on Page 2
Tokyo, April 26, 2016
Regarding the Report to MLIT Concerning Improper Conduct in Fuel Consumption Testing of Vehicles Manufactured by Mitsubishi Motors Corporation
The following is a summary of the report submitted by Mitsubishi Motors Corporation (MMC) to the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) today, pursuant to instructions received from MLIT on April 20 to investigate improper conduct in fuel consumption testing of vehicles manufactured by MMC.
1.Background to the improper conduct of MMC mini-car fuel consumption testing data
(1) Four grades of the model year 2014 eK Wagon and Dayz (submitted in February 2013) were produced—a fuel-economy grade, a standard grade, a turbo grade and a 4WD grade. During development of the fuel-economy grade, the fuel consumption target, which had initially been 26.4km/l (in February 2011), was revised upward over a series of internal meetings until finally being set at 29.2km/l (February 2013).
(2) Driving resistance data were obtained for that fuel-economy grade using a "high-speed coasting test," which differed from the coasting test required by the applicable laws and regulations in Japan. A relatively low value was selected from among the test results for use as the driving resistance value in order to give the appearance of greater fuel consumption. Data for the remaining three grades were calculated without testing based on the data for the fuel-economy grade.
(3) The data submitted for the model year 2014 eK Space and Dayz Roox (submitted in October 2013), the model year 2015 eK Wagon and Dayz (submitted in March 2014), the model year 2015 eK Space and Dayz Roox (submitted in December 2014), and the model year 2016 eK Wagon and Dayz (submitted in June 2015) were all calculated without testing based on the data for the model year 2014 eK Wagon and Dayz to achieve the fuel consumption targets.
2. The following is the timeline leading up to the use of the "high-speed coasting test" differing from the test required by the applicable laws and regulations in Japan. We are currently investigating the reasoning behind each of the decisions outlined below.
(1) In 1991, the coasting test was designated as the method for testing driving resistance under the Road Transport Vehicle Act, but MMC began testing vehicles for the Japanese market using a different method, the "high-speed coasting test".
(2) In January 1992, a method was developed to reverse-calculate coasting time using driving resistance.
(3) In January 2001, a test was run that compared the coasting test to the "high-speed coasting test," and the difference in results was found never to exceed 2.3%.
(4) In February 2007, the testing manual was updated to add that "TRIAS (i.e., the coasting test) is to be used for DOM (i.e., vehicles for sale in Japan)." Nevertheless, the "high-speed coasting test" continued to be used thereafter.
3. Future direction of investigations
(1) While some progress has been made in investigating the events described in sections 1 and 2 above, we will continue to work to discover the causes of this improper conduct and who is responsible.
(2) Sufficient investigation has not been made into MMC vehicles other than the mini-cars described above; we plan to submit a separate report after looking into those models.
Establishment of Special Investigation Committee
In connection with the certification process for the mini-cars manufactured by Mitsubishi Motors Corporation ("MMC"), MMC hereby notifies that, yesterday, the board of directors decided to establish a special investigation committee (the "Committee") consisting of only external experts.
MMC expresses its most sincere apologies to all of our customers, shareholders, and stakeholders for any inconvenience or concern caused by this occasion.
1: Background for the establishment of the Committee
As announced, on April 20, 2016, in the press release titled "Improper conduct in fuel consumption testing on products manufactured by Mitsubishi Motors Corporation (MMC)," it has been revealed that, in the certification process for mini-cars manufactured by MMC, with respect to the fuel consumption testing data submitted to the Ministry of Land, Infrastructure, Transport, and Tourism, MMC conducted testing improperly, to present better fuel consumption rates than the actual rates; and that the testing method was also different from the one required by Japanese law (the "Matter"). For the sake of ensuring an objective and thorough investigation into the Matter, MMC has established this Committee in a way such that all members would be external experts independent from MMC.
2: Membership and activities of the Committee
i Membership of the Committee
The Committee is composed of the members, as follows, who have no conflicts of interest with MMC. Therefore, MMC has recognized no factor that would harm the independence and neutrality of the Committee. Further, MMC is considering appointing experts with technical knowledge to participate in the investigation.
Committee Chair: Keiichi WATANABE, Attorney at Law
(former Superintending Prosecutor, Tokyo High Prosecutors Office)
Committee Member: Yoshiro SAKATA, Attorney at Law
Committee Member: Genta YOSHINO, Attorney at Law
The Committee shall perform the following activities pursuant to MMC's delegation.
Investigation to uncover the facts surrounding the Matter, including review of related documents and data, and interviews with the related people.
Investigation to confirm the existence of other improper conduct similar to the Matter, and uncover the facts, if it does.
Analysis of the cause of the Matter, and a suggestion on measures to prevent recurrence.
3: Schedule moving forward
The Committee shall investigate the Matter for about the next three months, and make a report on its results. MMC plans to disclose the report in a timely manner.