Mitsubishi plans $600
million compensation for four models over mileage
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[June 17, 2016]
By Maki Shiraki and Naomi Tajitsu
TOKYO (Reuters) - Japan's Mitsubishi
Motors Corp said it plans 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.
The mileage scandal, which the company has blamed on pressure to
deliver competitive readings and poor supervision of testing
processes, has led to plans for Nissan Motor Co to take a one-third
controlling stake in the embattled automaker.
Mitsubishi CEO Osamu Masuko told reporters that the planned
compensation costs were not expected to hinder its talks with
The automaker admitted in April to deliberately overstating the fuel
economy for some 625,000 minivehicles including two models produced
for Nissan. Minivehicles, which have engines of up to 660cc, are
sold mostly in Japan where they get preferential tax treatment.
The 100,000 yen payment per customer for the four models compares
with analysts' estimates that had ranged from 46,000 yen to 146,000
yen. The payments do not to cover possible reimbursements for the
loss of tax subsidies that are set to be announced at a later date.
In addition to those models, owners of five other vehicles where
improper mileage calculations were used will receive around 30,000
yen ($290). The compensation was much lower as the gap between the
mileage advertised and actual mileage was much smaller, Mitsubishi
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A security personnel walks in front of Mitsubishi Motors Corp's
headquarters in Tokyo, Japan, May 13, 2016. REUTERS/Issei Kato
Japanese automakers' mileage calculations have come under increased scrutiny in
the wake of the scandal. An investigation by the transport ministry found that
Suzuki Motor Corp was also using wrong methods to calculate mileage for models
going back to 2010.
Mitsubishi said compensation-related costs will result in a 50 billion yen
charge in the current financial year through next March. That comes on top of 15
billion yen the company put aside in the past business year.
(Reporting by Maki Shiraki and Naomi Tajitsu; Editing by Ritsuko Ando and Edwina
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