TOKYO • Japanese officials raided a facility belonging to Mitsubishi Motors yesterday after the carmaker admitted to overstating the fuel efficiency of 625,000 cars, a revelation that has sent its shares into a tailspin.
A spokesman for the company said the raid by members of Japan's Transport Ministry at a plant in the central Japanese city of Okazaki would continue today.
Mitsubishi shares slid for a second straight day yesterday, hitting a record low amid concerns about the potential cost of compensation and fines from the biggest scandal to hit the company since a defect cover-up a decade ago.
The stock has lost a third of its market value, or US$2.5 billion (S$3.4 billion), in the last two days.
The problem, which the government has called "extremely serious", came to light after Nissan Motor, which markets a model made by Mitsubishi, found a discrepancy in fuel efficiency test data.
It affects two models - Mitsubishi's eK mini-wagon and Nissan's Dayz - with both vehicle makers saying that they will halt sales of the mini-cars. "This has critically damaged consumers' trust and it won't be tolerated," top government spokesman Yoshihide Suga said yesterday.
JPMorgan vehicle industry analyst Akira Kishimoto estimated that the cheating could cost Mitsubishi more than 50 billion yen (S$613 million), including payments to consumers, the cost of replacing parts and compensation to Nissan.
And while Mitsubishi said the cars were sold only in Japan, the impact could be felt farther afield.
Mitsubishi's top executive conceded on Wednesday that the brewing crisis would take a bite out of the manufacturer's bottom line, as it widens its probe to cars that it sold overseas.
"This is not a simple problem and we need time" to assess the impact, Mitsubishi president Tetsuro Aikawa told a news briefing. "But I'm sure there will be an impact. The damage will be big."
The cheating follows a cover-up scandal that brought Mitsubishi, Japan's sixth-biggest carmaker, close to collapse about a decade ago, when it admitted to systematically concealing defects over decades.
It was Japan's worst automotive recall scandal at the time.
Yesterday, Mitsubishi Motors shares were untraded for the whole day as they were swamped with sell orders prompted by the bad news. Tokyo stock exchange rules do not allow trades when there is a large imbalance in buy and sell orders, but shares close at their last indicated price.
The Transport Ministry has ordered the company to submit a full report on test manipulation within a week. The ministry has also ordered Japanese vehicle makers to submit fuel economy test data by May 18.
REUTERS, AGENCE FRANCE-PRESSE