Mitsubishi Motors shares indicated below record low after cheating on mileage
Apr 20, 2016, 08:08 PM
#1
Mitsubishi Motors shares indicated below record low after cheating on mileage
https://www.yahoo.com/news/mitsubish...ce.html?ref=gs
TOKYO (Reuters) - Mitsubishi Motors Corp's shares were flooded with sell orders on Thursday, indicated far below their life-time low after the Japanese automaker admitted to manipulating test data to overstate the fuel economy of 625,000 cars.
If the shares trade at their indicated price, they would lose a third of their value in two days, wiping $2.5 billion off the automaker's market value.
Japan's sixth-biggest automaker said on Wednesday it stopped making and selling its eK mini-wagons for the domestic market after Nissan Motor Co , which markets a similar model made by Mitsubishi Motors, found a discrepancy in fuel efficiency test data.
JPMorgan auto analyst Akira Kishimoto estimated the cheating could cost Mitsubishi more than 50 billion yen ($450 million), including payments to consumers, the costs of replacing parts, and compensation to Nissan.
"In addition to the costs of the scandal, the secondary effects on worldwide sales could be very large," he wrote in a note to clients, adding that the automaker has tied its brand to environmentally friendly technology with its fuel-sipping plug-in hybrids and fully electric vehicles.
Revelations of the cheating follow a cover-up scandal that brought Mitsubishi close to the brink about a decade ago, when the automaker admitted to systematically concealing defects over decades. It was Japan's worst automotive recall scandal at the time.
The shares were indicated to fall by their daily lower limit to 583 yen, representing a drop of a fifth on the day. The previous record low was 660 yen.
Japan's transport ministry on Wednesday ordered the company to submit a full report on test manipulation within a week, and said it would decide on its response by May 18.
Mitsubishi, which has annual sales of just over 1 million cars, is the first Japanese automaker to report misconduct involving fuel economy tests since Volkswagen AG was discovered last year to have cheated diesel emissions tests in the United States and elsewhere.
South Korean car makers Hyundai Motor Co and affiliate Kia Motors Corp in 2014 agreed to pay $350 million in penalties to the U.S. government for overstating their vehicles' fuel economy ratings. They also resolved claims from car owners.
($1 = 109.6700 yen)
TOKYO (Reuters) - Mitsubishi Motors Corp's shares were flooded with sell orders on Thursday, indicated far below their life-time low after the Japanese automaker admitted to manipulating test data to overstate the fuel economy of 625,000 cars.
If the shares trade at their indicated price, they would lose a third of their value in two days, wiping $2.5 billion off the automaker's market value.
Japan's sixth-biggest automaker said on Wednesday it stopped making and selling its eK mini-wagons for the domestic market after Nissan Motor Co , which markets a similar model made by Mitsubishi Motors, found a discrepancy in fuel efficiency test data.
JPMorgan auto analyst Akira Kishimoto estimated the cheating could cost Mitsubishi more than 50 billion yen ($450 million), including payments to consumers, the costs of replacing parts, and compensation to Nissan.
"In addition to the costs of the scandal, the secondary effects on worldwide sales could be very large," he wrote in a note to clients, adding that the automaker has tied its brand to environmentally friendly technology with its fuel-sipping plug-in hybrids and fully electric vehicles.
Revelations of the cheating follow a cover-up scandal that brought Mitsubishi close to the brink about a decade ago, when the automaker admitted to systematically concealing defects over decades. It was Japan's worst automotive recall scandal at the time.
The shares were indicated to fall by their daily lower limit to 583 yen, representing a drop of a fifth on the day. The previous record low was 660 yen.
Japan's transport ministry on Wednesday ordered the company to submit a full report on test manipulation within a week, and said it would decide on its response by May 18.
Mitsubishi, which has annual sales of just over 1 million cars, is the first Japanese automaker to report misconduct involving fuel economy tests since Volkswagen AG was discovered last year to have cheated diesel emissions tests in the United States and elsewhere.
South Korean car makers Hyundai Motor Co and affiliate Kia Motors Corp in 2014 agreed to pay $350 million in penalties to the U.S. government for overstating their vehicles' fuel economy ratings. They also resolved claims from car owners.
($1 = 109.6700 yen)
Apr 21, 2016, 07:43 PM
#6
Mitsubishi Motors shares fall further 15% on fuel cheating
https://www.yahoo.com/news/mitsubish...89.html?ref=gs
Mitsubishi Motors' shares nosedived for a third day on Friday, falling as much as 16 percent in early trading in response to its shock admission that it cheated on fuel-efficiency tests.
At 10:07 am (0107 GMT), the stock was down 13.20 percent at 506 yen, after dipping as low as 489 yen, or 16.12 percent off.
Panic-selling in the past two days had already sent the share price tumbling by a third, wiping about $2.5 billion off the automaker's market value, after the embarrassing revelation.
It marked the worst three-day decline since the company's listing in 1988, Bloomberg News reported.
The scandal came as German auto giant Volkswagen struggles to restore its badly dented reputation after revelations of emissions rigging.
Mitsubishi admitted Wednesday that unnamed employees rigged tests to make some of its cars seem more fuel-efficient than they were in reality.
The company said it would halt production and sales of the affected models -- mini-cars sold in Japan including some made for rival Nissan -- and warned that the number of cars involved in the scandal would likely rise.
"Certainly it is a blow, the vast majority of their business in Japan has become selling mini-vehicles to Nissan because the market share of their own branded products after the scandal in the 2000s withered down to practically nothing," Christopher Richter, an auto analyst at brokerage CLSA in Tokyo, told AFP.
More than a decade ago Mitsubishi teetered on the edge of bankruptcy after being hit by a lack of cash and a series of huge recalls linked to serious defects.
Japanese industry minister Motoo Hayashi told reporters Friday that he has "instructed (the company) to swiftly report facts" around the fuel efficiency scandal to the ministry, Jiji Press reported.
Meanwhile, the transport ministry sent officials to raid a Mitsubishi Motors' research and development centre for a second day on Friday, a ministry official told AFP.
Transport minister Keiichi Ishii told reporters on Friday that the ministry will review ways to test fuel efficiency to prevent a repeat of the scandal, Jiji said.
https://www.yahoo.com/news/mitsubish...89.html?ref=gs
Mitsubishi Motors' shares nosedived for a third day on Friday, falling as much as 16 percent in early trading in response to its shock admission that it cheated on fuel-efficiency tests.
At 10:07 am (0107 GMT), the stock was down 13.20 percent at 506 yen, after dipping as low as 489 yen, or 16.12 percent off.
Panic-selling in the past two days had already sent the share price tumbling by a third, wiping about $2.5 billion off the automaker's market value, after the embarrassing revelation.
It marked the worst three-day decline since the company's listing in 1988, Bloomberg News reported.
The scandal came as German auto giant Volkswagen struggles to restore its badly dented reputation after revelations of emissions rigging.
Mitsubishi admitted Wednesday that unnamed employees rigged tests to make some of its cars seem more fuel-efficient than they were in reality.
The company said it would halt production and sales of the affected models -- mini-cars sold in Japan including some made for rival Nissan -- and warned that the number of cars involved in the scandal would likely rise.
"Certainly it is a blow, the vast majority of their business in Japan has become selling mini-vehicles to Nissan because the market share of their own branded products after the scandal in the 2000s withered down to practically nothing," Christopher Richter, an auto analyst at brokerage CLSA in Tokyo, told AFP.
More than a decade ago Mitsubishi teetered on the edge of bankruptcy after being hit by a lack of cash and a series of huge recalls linked to serious defects.
Japanese industry minister Motoo Hayashi told reporters Friday that he has "instructed (the company) to swiftly report facts" around the fuel efficiency scandal to the ministry, Jiji Press reported.
Meanwhile, the transport ministry sent officials to raid a Mitsubishi Motors' research and development centre for a second day on Friday, a ministry official told AFP.
Transport minister Keiichi Ishii told reporters on Friday that the ministry will review ways to test fuel efficiency to prevent a repeat of the scandal, Jiji said.
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Apr 22, 2016, 08:07 AM
#9
EvoM Community Team Leader
they say sometimes you gotta hit rock bottom before you can turn things around.
Apr 22, 2016, 08:23 AM
#10
I am not sure that applies to business. They will need an infusion of cash from somewhere. Their model lineup is small and showing its age.
Outlander/Outlander sport, Lancer, Mirage, & I-Miev. Walking into a Mitsubishi dealer (if you can find one) doesn't exactly blow your socks off.
Outlander/Outlander sport, Lancer, Mirage, & I-Miev. Walking into a Mitsubishi dealer (if you can find one) doesn't exactly blow your socks off.
Apr 22, 2016, 08:35 AM
#11
EvoM Community Team Leader
It would be cool if Chrysler just bought them out or something. I have fond memories of the old DSM days. Plus could you imagine an SRT Outlander
Apr 22, 2016, 08:40 AM
#13
EvoM Guru
iTrader: (1)
I am not sure that applies to business. They will need an infusion of cash from somewhere. Their model lineup is small and showing its age.
Outlander/Outlander sport, Lancer, Mirage, & I-Miev. Walking into a Mitsubishi dealer (if you can find one) doesn't exactly blow your socks off.
Outlander/Outlander sport, Lancer, Mirage, & I-Miev. Walking into a Mitsubishi dealer (if you can find one) doesn't exactly blow your socks off.
The perfect example of that would be GM and Chrysler. They bottomed out, and would not be around today if it wasn't for the government bailouts.
Apr 22, 2016, 08:49 AM
#14
EvoM Community Team Leader
I know its not just a given that things will turn around if they do hit rock bottom. The company has assets though and unless some vulture capitalists swoop in and tear it apart, there will be restructuring and the chance for a major course correction. Failed ideas can be discarded and fresh people and vision can be installed.
Apr 22, 2016, 09:03 AM
#15
I think Mitsubihsi has pinned their future to EV and crossovers (as they have said as much repeatedly). Time will tell, but I am not optimistic.
I would like to see a Mazda/Mitsubishi partnership. Lightweight chassis + EV.
Or Yamaha/Mitsubishi, the Yamaha sports ride concept sold through Mitsubishi dealers would be win.
I am tempted to buy some mitsubishi stock in case it rebounds, but I can't think of a good reason to. https://www.google.com/search?q=mmto...hrome&ie=UTF-8
I would like to see a Mazda/Mitsubishi partnership. Lightweight chassis + EV.
Or Yamaha/Mitsubishi, the Yamaha sports ride concept sold through Mitsubishi dealers would be win.
I am tempted to buy some mitsubishi stock in case it rebounds, but I can't think of a good reason to. https://www.google.com/search?q=mmto...hrome&ie=UTF-8
Last edited by nemsin; Apr 22, 2016 at 10:18 AM.