The revelation that Mitsubishi Motors Corp. has been manipulating the fuel efficiency data of its minicars raises doubts about whether the automaker ever fixed the corporate culture that in the past was responsible for the cover-up of extensive vehicle defects, which led to top executives being convicted over fatal accidents blamed on these defects. Coming on the heels of Volkswagen AG’s emissions-cheating scandal, Mitsubishi Motors’ action to falsify the performance of its vehicles is yet another case that breaches the trust of consumers in favor of narrow corporate interests.
The automaker’s top executives said the division manager in charge is believed to have ordered falsification of the data to meet in-house fuel efficiency targets and denied that top management added pressure to commit the manipulation, although the firm will commission a panel of third-party experts to scrutinize how the decision to cheat was implemented. Mitsubishi Motors should find out whether the latest problem is a product of the company’s old ways, which it had vowed to correct following the earlier scandals.
Mitsubishi Motors says it tampered with the tire rolling resistance and aerodynamic drag data it provided to the transport ministry for government tests to certify the fuel efficiency of its four minicar models in production since 2013, including those supplied to Nissan Motor Co. under its brand. As a result, the roughly 625,000 units of the four models — eK Wagon, eK Space, and Nissan’s Dayz and Dayz Roox — were made to look 5 to 10 percent more fuel efficient than they would be in real-world driving conditions. Production and sales of the four models have been halted. Mitsubishi Motors is not expected to recall the vehicles in question because the problem doesn’t affect their safety, although it reportedly may consider some form of compensation for their owners for the extra fuel costs or possible termination of tax credits accorded to the models for their supposed fuel efficiency.
Cars may not be more prone to accidents just because their fuel mileage figures have been inflated. But the fact that the automaker was cheating on fuel efficiency figures in an effort to outperform its competitors in the vehicles’ catalog data — and deceiving its customers by doing so — is enough to raise questions as to whether the pursuit of its interests has led Mitsubishi to be less than honest about other product features.
Since the late 1970s, Mitsubishi Motors had covered up large numbers of customer complaints of defects in its vehicles that should have been reported to transport authorities as subject to recall, instead privately fixing the defects. The practice was exposed in 2000, but the conduct was not immediately corrected. In 2002, a wheel on one of its trailer-trucks came off and killed a pedestrian in an accident that a court later determined could have been averted if the defect had been fixed in a recall. Top executives of the automaker were charged and convicted of fatal negligence in this and another fatal accident involving its trucks.
Mitsubishi’s sales plummeted due to these scandals and pushed the automaker into a serious management crisis. It has since managed to rebuild its business with support from the Mitsubishi group of companies and reported a record consolidated net profit in the year to March 2015. The latest scandal will likely inflict serious financial damage once again on the automaker. But the larger question is whether the cheating on fuel efficiency is a sign that the flawed corporate culture that was behind the earlier scandals — which the firm had vowed to change as it tried to rebuild itself — has in fact remained unchanged.
The environmentally friendly performance of automobiles, including exhaust emissions and fuel mileage, are crucial elements of competition in today’s market. Mitsubishi Motors is believed to have rigged its data so as not to fare poorly against its rival makers in the highly contested minicar segment. Volkswagen came under fire after it admitted that millions of its diesel-powered vehicles sold worldwide carried software that allow them to pass emissions tests by turning on pollution controls to clear official tests and turning them off when the cars are driven to improve performance. Mitsubishi Motors’ problem seems no different in that they both misrepresented performance data that may have persuaded consumers to buy their vehicles.
Aside from ordering Mitsubishi Motors to file a detailed report on its cheating by the middle of next week, the transport ministry has told other automakers to look into and report by May 18 whether they have engaged in similar irregularities. The industry as a whole should scrutinize its practices to ease any doubts in consumers’ minds that may have been triggered by these scandals.
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