Japan creates cheat-busting task force

Japan creates cheat-busting task force

MITSJapan has created a task force to prevent sneaky tricks being used by car makers to serve up false data to trusting customers – and regulatory bodies.

The move has come in the wake of Mitsubishi’s admission that it manipulated results during fuel efficiency testing.

Global scrutiny on Volkswagen’s diesel emissions scandal – although a very different case to Mitsubishi’s – underlined just how much weight regulators needed to place on any wrongdoers.

Japan’s transport minister Keiichi Ishii described Mitsubishi Motors’ fuel economy fakery has “extremely serious.”

Today is the deadline the ministry has given the company to report the findings of its internal investigation of the dodgy data.

Car companies in Japan – and globally – are expecting renewed scrutiny from regulators in relation to any data that could impact the environment.

Mitsubishi was due to report its fiscal fourth-quarter results today, but is reportedly delaying the move while it counts the costs of its admission of wrongdoing.

Mitsubishi is perhaps one of the least robust of Japan’s manufacturers, requiring two rounds of bailouts from Mitsubishi Group companies over a decade ago. That scandal involved a cover-up of deadly defects, and its almost certain that it would not have survived without a cash injection.

“Mitsubishi Motors has come a long way since past problems, so this is very disappointing,” Shunichi Miyanaga, president of the car maker’s largest shareholder, Mitsubishi Heavy Industries told reporters in Tokyo this week.

“We need to think about the brand image of the Mitsubishi Group, its social responsibility and accountability for performance.”

Nissan which discovered the falsified data that led to the admission by Mitsubishi, will decide on its partnership after “all verification is done,” said CEO Carlos Ghosn.

Three-quarters of the affected minicars produced by Mitsubishi in the past three years were supplied to Nissan.

Selling Point Fuel economy had been a selling point for Mitsubishi mini-vehicles as the company worked to overcome the residue of a 2000 recall scandal in which it admitted to overlooking fatal flaws in truck axles that could cause wheels to fly off.

“We don’t know what, in particular, we should do next,” Masayasu Noguchi, a representative of Kanto Mitsubishi Motor Sales, a dealership near the centre of Tokyo, said.

He said customers are angry about the falsification and have let him know it.

“New customers are the ones who are worried the most,” said Noguchi. “We have to handle this sincerely to keep them from walking away.”

The Japanese government is exploring the possibility of forcing the company pay all of the taxes exempted on minivehicles in the wake of the revelations.

These so-called ‘kei’ cars not only get national government tax exemptions, but also pay less to local governments.

Under a third-party tax system, an outside person or entity can pay on behalf of a taxpayer. Using Japan’s third-party tax system system, which allows a person or entity to pay tax on behalf of a taxpayer, Mitsubishi could be asked by the the government to cover the shortfall, the sources said, adding that if the eco-friendly vehicles meet the standards, the government will not seek payments from the automaker.

The minivehicle models involved are the Mitsubishi eK Wagon and eK Space, as well as two models supplied to Nissan, the Dayz and Dayz Roox. All four are eligible for tax breaks.

Mitsubishi said it had sold a total of 157,000 units of the eK Wagon and eK Space, and supplied 468,000 units of the Dayz and Dayz Roox to Nissan, as of the end of March.

Customers who purchase new cars that are deemed to be fuel efficient are exempted from the automobile acquisition tax required by the purchaser’s local government, and the weight tax due to the central government.

Reports in Tokyo today have said that Mitsubishi has admitted that fuel economy tests on its vehicles were flawed from the early 1990s, widening the scandal that has already tarnished its reputation and sales at home.

The carmaker said its internal probe had found that its fuel-economy testing methods did not comply with Japanese standards for models dating back to 2002.

But in a report to the transport ministry on Tuesday, local time, Mitsubishi admitted fuel economy tests had deviated from local standards since 1991, when the country changed to an alternative testing method.

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