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▼ Analysis / Mileage Competition Spurred MMC Manipulation
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The Yomiuri Shimbun
Mitsubishi Motors Corp. (MMC), which announced Wednesday it had falsified data on fuel efficiency for four minivehicle models, has been in fierce competition over better mileage to attract cost-conscious consumers.
The company overstated the fuel economy of these models apparently in a bid to catch up with the top two makers in the minivehicle market, Daihatsu Motor Co. and Suzuki Motor Corp.
“I feel responsible as this manipulation was intentional,” MMC President Tetsuro Aikawa said during a press conference Wednesday.
Aikawa himself was one of the developers of the inaugural edition of the eK Wagon, one of the four models involved in the scandal. However, the president said he was only informed of the data falsification on April 13.
The manufacturer insisted that its executives were unaware of the manipulation as it was conducted mainly by managers of the product development division.
The falsification centered on basic data used in fuel economy tests. Mileage can be calculated based on running resistance values, which show air resistance and rolling resistance mainly generated by tires. From multiple running resistance readings, MMC intentionally submitted lower ones for the four models to the Land, Infrastructure, Transport and Tourism Ministry, even though regulations stipulate that manufacturers should submit medium values.
Mitsubishi Motors Corp. (MMC), which announced Wednesday it had falsified data on fuel efficiency for four minivehicle models, has been in fierce competition over better mileage to attract cost-conscious consumers.
The company overstated the fuel economy of these models apparently in a bid to catch up with the top two makers in the minivehicle market, Daihatsu Motor Co. and Suzuki Motor Corp.
“I feel responsible as this manipulation was intentional,” MMC President Tetsuro Aikawa said during a press conference Wednesday.
Aikawa himself was one of the developers of the inaugural edition of the eK Wagon, one of the four models involved in the scandal. However, the president said he was only informed of the data falsification on April 13.
The manufacturer insisted that its executives were unaware of the manipulation as it was conducted mainly by managers of the product development division.
The falsification centered on basic data used in fuel economy tests. Mileage can be calculated based on running resistance values, which show air resistance and rolling resistance mainly generated by tires. From multiple running resistance readings, MMC intentionally submitted lower ones for the four models to the Land, Infrastructure, Transport and Tourism Ministry, even though regulations stipulate that manufacturers should submit medium values.
Using lower readings, the models were dressed up to be able to run with less resistance and therefore deemed to have better mileage. Data were also falsified when the models underwent minor changes to promote better fuel economy.
“The manipulation is seriously malicious,” a senior ministry official said. “The management will be held accountable.”
The four models were developed by a company jointly set up in 2011 by MMC and Nissan Motor Co., for which MMC supplies two of the four models involved for sale under Nissan’s own brand. They are produced at Mitsubishi’s Mizushima plant in Kurashiki, Okayama Prefecture.
This collaboration has given some benefits to MMC as it can produce vehicles for a company that enjoys stronger sales networks, while also at the same time being able to increase the output of its plant.
As the minivehicle market is dominated by Daihatsu and Suzuki, other automakers used to focus on compact and regular vehicle models. However, sales of these types have become sluggish under the economic slowdown, making those manufacturers turn to minivehicles.
Not only MMC and Nissan, but also Honda Motor Co. have released minivehicle models. This smaller type accounted for about 37 percent of new automobile sales during fiscal 2015 and also dominated the sales ranking with six minivehicle models among the top 10.
Still, Daihatsu and Suzuki have a combined 60 percent share in the minivehicle market. Honda follows at about 18 percent, while Nissan stands at about 10 percent and Mitsubishi at about 3 percent.
The two top makers offer many models whose mileages exceed 30 kilometers per liter. MMC technicians manipulated data apparently because they desperately tried to reach strict in-house goals in an effort to catch up with the firm’s bigger rivals.
“The manipulation is seriously malicious,” a senior ministry official said. “The management will be held accountable.”
The four models were developed by a company jointly set up in 2011 by MMC and Nissan Motor Co., for which MMC supplies two of the four models involved for sale under Nissan’s own brand. They are produced at Mitsubishi’s Mizushima plant in Kurashiki, Okayama Prefecture.
This collaboration has given some benefits to MMC as it can produce vehicles for a company that enjoys stronger sales networks, while also at the same time being able to increase the output of its plant.
As the minivehicle market is dominated by Daihatsu and Suzuki, other automakers used to focus on compact and regular vehicle models. However, sales of these types have become sluggish under the economic slowdown, making those manufacturers turn to minivehicles.
Not only MMC and Nissan, but also Honda Motor Co. have released minivehicle models. This smaller type accounted for about 37 percent of new automobile sales during fiscal 2015 and also dominated the sales ranking with six minivehicle models among the top 10.
Still, Daihatsu and Suzuki have a combined 60 percent share in the minivehicle market. Honda follows at about 18 percent, while Nissan stands at about 10 percent and Mitsubishi at about 3 percent.
The two top makers offer many models whose mileages exceed 30 kilometers per liter. MMC technicians manipulated data apparently because they desperately tried to reach strict in-house goals in an effort to catch up with the firm’s bigger rivals.
MMC at one time faced a financial crisis over its cover-up of huge recalls since 2000. However, the manufacturer’s performance has been recovering due to the financial assistance given from fellow Mitsubishi Group companies.
Asked about a possible setback for its business in the immediate future, Aikawa said he believes his company “will suffer huge damage” from the data manipulation.
Models involved in the falsification of data have received tax breaks for being highly efficient, environmentally friendly vehicles, although they may not have been eligible for the benefit. MMC is willing to cover the shortfall in taxes paid by affected users.
With the manipulation, MMC has not only betrayed its users, but also caused an indirect burden to be placed on the public as the government did not receive due taxes in full.
Nissan, meanwhile, is becoming distrustful of its partner. “This could ruin the image of Nissan vehicles,” an executive said.
The two companies had plans to dispatch employees to the joint company to develop more new minivehicle models, but the scandal has cast a shadow over their collaboration.
Asked about a possible setback for its business in the immediate future, Aikawa said he believes his company “will suffer huge damage” from the data manipulation.
Models involved in the falsification of data have received tax breaks for being highly efficient, environmentally friendly vehicles, although they may not have been eligible for the benefit. MMC is willing to cover the shortfall in taxes paid by affected users.
With the manipulation, MMC has not only betrayed its users, but also caused an indirect burden to be placed on the public as the government did not receive due taxes in full.
Nissan, meanwhile, is becoming distrustful of its partner. “This could ruin the image of Nissan vehicles,” an executive said.
The two companies had plans to dispatch employees to the joint company to develop more new minivehicle models, but the scandal has cast a shadow over their collaboration.
- April 22, 2016
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