Suzuki says it used wrong mileage tests for Japan models; shares slide

[May 18, 2016]  By Minami Funakoshi
 
 TOKYO (Reuters) - Suzuki Motor Corp <7269.T> said it had used improper fuel economy tests for its cars in Japan but that proper testing subsequently had shown the mileage data did not need amending, in a widening of a scandal that has already engulfed Mitsubishi Motors <7211.T>.

Suzuki Motor Chairman and Chief Executive Officer Osamu Suzuki bows at a news conference at the Land, Infrastructure, Transport and Tourism Ministry in Tokyo, Japan, May 18, 2016. REUTERS/Thomas Peter

Mitsubishi, which admitted last month that it had manipulated fuel economy for four minivehicle models, said on Wednesday its President Tetsuro Aikawa will step down to take responsibility for the scandal.

The admission prompted the automaker to agree to sell a one-third controlling stake to Nissan Motor Co <7201.T>, and Japan's transport ministry to ask domestic automakers to re-submit fuel economy readings on all their vehicles by Wednesday.

Suzuki, Japan's No.4 automaker, said 2.1 million vehicles were affected but Chief Executive Osamu Suzuki told reporters that his workers did not intentionally use improper data.

"The company apologizes for the fact that we did not follow rules set by the country," he said.

Shares in Suzuki ended down 9.4 percent after the company said it had used improper tests but before it briefed media. At one point they fell as much as 15 percent to their lowest level since November 2013.

Suzuki specializes in minivehicles, which have engines of up to 660cc and get preferential tax treatment under Japanese law. It commands roughly one-third of the country's minivehicle market.

The automaker said it plans to continue sales of its cars given that new readings had not deviated much from those previously submitted, adding that it did not see much impact on earnings for now.

The impact has been much greater on Mitsubishi.

Mitsubishi said on Wednesday that "shortening of time spent on R&D, and expectations that high fuel-efficiency be achieved" led to data manipulation.

"There was no direct order from top management in this incident," Mitsubishi Chief Executive Osamu Masuko told reporters.

"But top management did not have a firm grasp on the proceedings at the R&D department," he said, adding there were several chances to stop its workers from using improper testing methods but that they did not stop.

Emissions and fuel economy have come under increasing scrutiny from regulators globally after Germany's Volkswagen <VOWG_p.DE> admitted last year that it used "defeat devices" on 11 million diesel vehicles to lower emissions during tests.

France, which ordered tests on a random sample of about 100 diesel cars last year, said last month some vehicles made by Renault <RENA.PA>, Fiat <FCHA.MI>, Mercedes, VW, PSA Peugeot Citroen <PEUP.PA>, Nissan, Opel <GM.N> and Ford <F.N> failed to comply fully with its emissions regulations.

South Korea, which has tested 20 diesel vehicle models, said on Monday it would punish Nissan with a fine and a recall of its Qashqai diesel sport utility vehicles, accusing it of manipulating emissions. Nissan denied the allegation.

In the United States, the Justice Department is investigating Daimler, the maker of Mercedes vehicles, over emissions testing.

(Reporting by Minami Funakoshi, Maki Shiraki, and Chris Gallagher; Additional reporting by Joshua Hunt; Writing by Miyoung Kim; Editing by Edwina Gibbs and Muralikumar Anantharaman)

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