Two of Japan’s automakers have admitted to providing fuel economy data discrepancies in 2016, which widened the fuel efficiency testing scandal that rocked Volkswagen AG back in September 2015. In April 2016, Mitsubishi Motors Corporation revealed that it had been manipulating its fuel efficiency testing data, which sent the stock price down over 50 percent in just five trading days.
After Mitsubishi’s scandal broke, Japan’s transport ministry ordered Mitsubishi and other Japanese automotive manufacturers to submit fuel economy test data. Just a few weeks after Mitsubishi’s scandal was publicized, Suzuki Motor Corporation admitted that it had used improper testing methods, but strongly denied that it cheated on fuel efficiency tests. On May 18, 2016, Suzuki Motor’s stock price fell 15 percent at one point, the day the news broke, but it rebounded slightly and ended the day down just under 10 percent.
Since these scandals have come to light, there may be increased regulations in the automotive manufacturing industry and Mitsubishi and Suzuki may face substantial fines. However, these scandals may cause alliances between automakers in Japan, such as the alliance that is forming between Nissan Motor Company and Mitsubishi. The alliances would be beneficial to some companies and may help boost sales in some Japanese automakers with small market shares.
Mitsubishi’s Fuel Efficiency Cheating Scandal
Mitsubishi Motors announced it altered the tire rolling resistance and aerodynamic drag data of four minicar models that were in production since 2013. The false air and tire resistance data provided to the Japanese transport ministry for government tests to certify the fuel efficiency. The manipulated data caused the fuel efficiency of over 600,000 minicars to be overstated between 5 percent and 10 percent.
