Mitsubishi expects annual loss due to mileage cheating scandal: Kyodo

TOKYO: Mitsubishi Motors Corp (7211.T) expects to post a net loss this financial year over its mileage cheating scandal, hurt by compensation costs and a slide in vehicle sales, Kyodo news agency reported on Tuesday.


The automaker said last week it planned to give owners of four minivehicles close to $1,000 in compensation for its overstating of mileage readings, part of reimbursement costs that will total at least $600 million.

Mitsubishi, which has said it expects a charge of 50 billion yen ($480 million) this business year due to compensation costs, declined to comment on the report. The report did not cite sources.

The automaker in April admitted to overstating the mileage on four of its minivehicles, including two models it produced for Nissan Motor Co (7201.T).

The scandal, which the company has blamed on pressure to deliver competitive readings and poor supervision of testing processes, has led to plans for Nissan to take a one-third controlling stake in the embattled automaker.

Separately, Japan’s government said sales of Mitsubishi vehicles with overstated mileage levels could resume.

Government tests had showed that fuel economy for the minivehicles was on average 11 percent lower than their advertised readings but the transport ministry said that this would not lead to change in their vehicle classification.