Mitsubishi Motors Posts Loss Over Scandal, Warns of Rising Costs
May 25 2016 - 6:20AM
Dow Jones News
TOKYO—Mitsubishi Motors Corp. on Wednesday posted a $174 million
special loss and warned that related costs could balloon further as
it grapples with the fallout from a fuel economy testing scandal
that has led to the resignation of its president.
Mitsubishi's sales are declining and its costs are rising after
it first admitted in April to falsifying data related to fuel
economy to make mileage look better on four models, so-called
minicars sold only in Japan. Two of these minicars, with 0.66 liter
engines, were manufactured by Mitsubishi and sold under Nissan
Motor Co.'s brand name.
Mitsubishi had originally reported a ¥ 89 billion net profit for
the year ended March 31. But in light of the special ¥ 19 billion
($174 million) loss, it said it was revising that figure to a ¥ 73
billion net profit—an unusual case of a company revising its
reported results for a period that is already over.
Scandal-related costs could increase further down the road, as
the company said it has "estimated part of losses based on internal
examination results" on the four minicars.
Mitsubishi has also said that data manipulation took place
beyond minicars, in some versions of its Pajero and RVR
sport-utility vehicles in Japan.
None of its vehicles sold overseas are affected by the mileage
problem, Mitsubishi has said.
The scandal broadened last week to include another of Japan's
second-tier auto makers, Suzuki Motor Corp., which has also
admitted to improperly testing its vehicles.
Mitsubishi and Suzuki are among several global auto makers under
scrutiny after Volkswagen AG late last year said it used illegal
software on some of its diesel-powered vehicles to cheat on U.S.
emissions tests.
Earlier this month Nissan agreed to take a 34% controlling stake
in Mitsubishi Motors for more than $2 billion, subject to
regulatory approval. It said it would help Japan's sixth biggest
auto maker by global sales volume rebuild its damaged brand
image.
As part of the deal, Nissan will send in an executive, Mitsuhiko
Yamashita, to head vehicle development at Mitsubishi Motors,
Mitsubishi said Wednesday. The company has also said its president
Tetsuro Aikawa will step down.
The company's shareholders will vote on the personnel changes at
the company's annual meeting on June 24.
Write to Megumi Fujikawa at megumi.fujikawa@wsj.com
(END) Dow Jones Newswires
May 25, 2016 06:05 ET (10:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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