On Thursday, Mitsubishi Motors Corps shares were not untraded as they were flooded with sell orders, and were composed to reach a record low following the Japanese automaker acknowledged to have influenced fuel-economy record.
On Wednesday, Japans sixth largest automaker stated it had influenced test data to exaggerate the fuel economy of 625,000 cars, a condition the government called "extremely serious".
Mitsubishi Motors had stated it discontinued making and selling its eK mini-wagons for the domestic market after Nissan Motor Co (T:7201), that markets the same model build by Mitsubishi Motors, found a inconsistency in fuel efficiency test data.
JPMorgan auto analyst Akira Kishimoto projected the cheating, could cost Mitsubishi over 50 billion yen ($450 million), plus payments to consumers, the costs of changing parts, and payment to Nissan.
And although Mitsubishi stated the automobile were sold only in Japan, the influence could be felt extensive.
"In addition to the costs of the scandal, the secondary effects on worldwide sales could be very large," Kishimoto stated in a note to clients, adding that “ the automaker has tied its brand to environmentally friendly technology with its fuel-sipping plug-in hybrids and fully electric vehicles.”
With the Tokyo stock market guidelines, if no trades are completed in Mitsubishi Motors shares for all of Thursday, they will be considered to have closed at the specified price. The specified price on Thursday was 583 yen, the bottom they can go for the day, signifying a 20% decline from Wednesdays close.
A decline to that level would take Mitsubishi Motors shares down the prior record down of 660 yen and would mean they have lost a 3rd of their market worth, or $2.5 billion, in two days.
Disclosures of the cheating follow a scheme scandal that is taken Mitsubishi close to the edge approximately a decade ago, when the automaker acknowledged to systematically hiding deficiencies more than decades. It was Japans worst automotive memory scandal at the time.
Chief Cabinet Secretary Yoshihide Suga, the governments top spokesperson, told a news conference."This undermines consumers trust and it shouldnt have happened. It is an extremely serious case."
"We want the whole picture of the misconduct clarified as soon as possible, and want a strict response and the safety of automobiles to be ensured," he commented
On Wednesday, Japans transport ministry instructed the firm to submit a complete report on test manipulation within a week, and stated it would choose on its response by May 18.
Mitsubishi, that has yearly sales of just more than1 million cars, is the first Japanese automaker to issue a misdemeanors linking to fuel economy tests since Volkswagen AG was found out last year to have cheated diesel emissions tests in the United States and elsewhere.
People briefed on the matter says Reuters Volkswagen has reached an agreement with the U.S. goverment and agreed to buy back nearly 500,000 diesel-powered vehicles to abstain from U.S. emission rules.
In 2014, South Korean car manufacturer Hyundai Motor Co (KS: 005380) and affiliate Kia Motors Corp (KS: 000270) settled to pay $350 million in penalties to the U.S. government for exaggerating their vehicles fuel economy rankings. They also fixed claims from car owners.
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