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Tokyo - Mitsubishi booked a ¥19.1bn charge to reflect losses related to its fuel economy testing scandal, which reduced profit last fiscal year by 19% and prompted a shake-up in top management.
The Japanese automaker said it earned ¥72.6bn for the fiscal year ended in March, rather than the ¥89.1bn initially reported last month. Chairman Osamu Masuko will add the role of president, replacing Tetsuro Aikawa, who said last week he’d resign.
A former executive for Nissan, which plans to buy a 34% stake in Mitsubishi, will head the development unit that manipulated fuel economy data and used test methods out of compliance with Japan law for 25 years.
The charge adds clarity to the extent of the costs of Mitsubishi Motors’ fuel economy data scandal as the company looks to sell a stake to Nissan for about $2.2bn. Aikawa, 62, is poised to step down after the company said management created an environment for fraud, adding to disclosures that it tested nine models improperly and overstated the ratings of four minicars by as much as 15%.
Compensation costs
The charge takes into account an estimation of costs to compensate customers, who purchased cars that underperform their fuel economy ratings, said Shinji Akiyama, a Mitsubishi spokesperson. It also factors in costs of repaying the government for tax rebates that the vehicles shouldn’t have been eligible for, he said.
Compensation to Nissan, which Mitsubishi supplied with the faulty minicars, and to dealers whose sales have taken a hit from the scandal don’t factor in the charge, Akiyama said.
Mitsuhiko Yamashita, a former head of research and development for Nissan who retired from the company’s board last year, will become the head of Mitsubishi Motors’ development unit effective June 24.
