Mitsubishi Fuel Economy Scandal Grows Larger

Mitsubishi fuel economy scandal leads automaker to stop selling eight models in Japan.

Posted in News

— The Mitsubishi fuel economy scandal has caused the automaker to suspend sales of eight Japanese models to correct fuel economy figures that are off by nearly 10 percent. The eight models are part of Mitsubishi's 25-year coverup of selling vehicles with overstated fuel economy estimates.

In April 2016, the company admitted it cheated fuel economy standards in Japan for the past 25 years, and the news came just days after admitting the company intentionally falsified data about fuel economy on more than 600,000 minicars.

Mitsubishi had manufactured many of the vehicles for Nissan and it was Nissan that originally discovered the problems. Nissan has since taken a third ownership of Mitsubishi which gives Nissan full control under Japanese law.

Nissan found that Mitsubishi used wrong test procedures that provided false data over the 25 years. Mitsubishi said it knew incorrect testing methods were used since 1991 and was again reminded of the fraud in 2007 when Japanese authorities updated their fuel economy testing manual. However, the automaker continued to provide data it knew was false.

The automaker conducted an internal investigation that found engineers were pressured to perform fuel economy improvements without the tools to do it, creating pressure on employees as they tried to answer to management.

Investigators also determined Mitsubishi executives didn't manage the company in an ethical way because management was too concerned with what other automakers were doing.

Much of the problem occurred after Mitsubishi admitted it submitted results from fuel economy tests conducted in a lab when those tests should have taken place on the roads. Road tests provide more accurate results because the testing procedures more accurately reflect real-world driving habits.

After spending 25 years building a business based on false information, the fuel economy scandal caused a 75 percent drop in profit for the first quarter of 2016. In addition, the automaker said it expects that after years of increased profits, it will lose about $1.2 billion for the year.

This newest revelation also caused Mitsubishi to lay aside another $68 million as potential compensation to affected owners.