Tokyo - Suzuki shares have plunged after it said it used an improper method to test the fuel efficiency of its vehicles, widening a scandal for Japan’s auto industry that first originated with Mitsubishi Motors.
Chairperson Osamu Suzuki will report the issue to Japan’s transport ministry on Wednesday, said spokesperson Hidehiro Hirano.
Suzuki shares tumbled as much as 15%, its worst drop in 16 years and traded down 8.7% in Tokyo trading. The company has a market value of about $11.9bn and the stock is down 29% this year.
"The impression is bad, especially as the market has become very jittery after the Mitsubishi scandal," said Koji Endo, a Tokyo-based analyst with Advanced Research Japan. "Even if they didn’t manipulate data, this is still bad."
Suzuki is the first automaker to step forward with potential wrongdoing after Japan’s transport ministry asked companies to conduct internal investigations in the wake of Mitsubishi's scandal that began last month.
Mitsubishi overstated the ratings of four mini car models by as much as 10%, manipulated data related to those cars and has been investigating use of improper testing of other models dating back to 1991.
Maruti’s impact
At about $17bn, affiliate Maruti Suzuki India has a higher market value than its majority owner. Maruti Suzuki’s shares declined in Mumbai trading as much as 3.7%, the biggest intraday drop in six weeks.
About 22% of Suzuki’s 2.86 million worldwide vehicles sales were in Japan during the fiscal year ended in March, as the company has shifted its focus to expanding in India. Maruti last month reiterated that Suzuki will start production at its wholly owned factory in India’s western Gujarat state in January.
Suzuki has built fewer vehicles in Japan for 13 consecutive months and reduced domestic output in the last fiscal year by 18%. In March, the company’s Japan dealers began selling the imported Baleno hatchback, built by Maruti in India’s northern Haryana state. The strength of its Japan line up is in the mini car market, where it trails only Daihatsu.