Mitsubishi Promises It Wasn't Cheating On Fuel Economy Tests In America

Illustration for article titled Mitsubishi Promises It Wasn't Cheating On Fuel Economy Tests In America

Good Morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to know.


1st Gear: It’s Cool Guys, We Only Cheated In Japan

With Mitsubishi besieged by the MitsuTireInflateGate scandal in Japan, where it admitted to getting better fuel economy ratings on microcars by fiddling with tire pressures during testing, many have wondered if the automaker was doing the same thing in other markets.

That’s not the case, Mitsubishi Motors North America announced in a news release last night. Here’s what they said:

As you may have heard, Mitsubishi Motors Corporation in Tokyo recently announced irregularities concerning fuel consumption testing data on vehicles sold in Japan. To confirm that U.S. market vehicles are not affected by this issue, Mitsubishi Motors R&D America, Inc., working together with Mitsubishi Motors Corporation in Japan, proactively conducted an internal audit of U.S. market vehicles going back several model years to check previously submitted data to the EPA.

The results of that audit confirm that vehicles sold in the United States are not impacted by the fuel consumption testing data irregularities. Our findings confirm that fuel economy testing data for these U.S. market vehicles is accurate and complies with established EPA procedures.

Well that’s good.

2nd Gear: But It’s Taking A Big Hit

Reuters reports that Mitsubishi should have enough cash to weather this cheating scandal and whatever penalties may result, but it comes at an especially rough time for the company:

Demand for Mitsubishi cars has weakened, particularly at home, where the maker of the Outlander SUV and Delica mini-van sold just 102,000 vehicles in the year through March, half the number it sold less than a decade ago. With annual sales of around 1 million vehicles, MMC is a minnow in the global market, and has surrendered market share to rivals including Honda (7267.T), Mazda (7261.T) and Hyundai (005380.KS).

Shares in MMC rose more than 6 percent on Thursday ahead of a market holiday, but are down 48 percent since the company said it manipulated mileage test data on four mini-vehicle models, wiping $3.7 billion off its market value.

A nagging concern for investors had been whether MMC also rigged data for cars sold in the United States. While MMC sold fewer than 100,000 cars there last year, it’s a more litigious marketplace and could have meant significantly higher damages. MMC says mileage ratings on its U.S. vehicles were correct.


3rd Gear: VW Sees A Path Forward, Doesn’t Say What It Is

One more from Reuters: Volkswagen executives say that they see “light at the end of the tunnel” after reaching a deal with U.S. authorities last week on an emissions fix for the cheating diesel cars. That exact fix hasn’t been disclosed yet, though buybacks and cash are part of it.


Still, VW thinks it can “go forward” now, to quote their CFO:

“We are all agreed that we can make it, that we have potential ... now we have to do our homework, we have to clean up, and then we can go forward again,” Chief Financial Officer Frank Witter said.

Chief Executive Matthias Mueller said he had personally apologised to U.S. President Barack Obama for the test cheating when he met him at the Hanover Fair industry trade show this week, and that the company could look with confidence to future conversations with U.S. authorities.

Analysts said there were big challenges ahead, as Volkswagen strives to cut costs at its underperforming VW brand in the face of union opposition, and reform a highly centralised company structure blamed for lax controls and delays to new models.


4th Gear: What A Friend We Have In Google

That news yesterday about Fiat Chrysler possibly partnering with Google? More than one analyst says it makes a lot of sense. Here’s The Detroit News:

Fiat Chrysler has been slower than most automakers, including its crosstown rivals General Motors Co. and Ford Motor Co., in investing in and supporting the development of autonomous vehicles.

Google, reported to be in talks with Fiat Chrysler, doesn’t have the experience or infrastructure to mass-produce vehicles, as it continues to refine and test its fleet of self-driving cars that have driven about 1.5 million miles in autonomous mode.

“If Fiat Chrysler is the smallest volume of the Big Three, but suddenly is paired with someone like a Google and their resources, it kind of immediately changes the playing field,” said Kelley Blue Book senior analyst Karl Brauer. “Both of those companies jump to the front of the line.”


5th Gear: GM Optimistic On China

The unexpected downturn in China has meant big headaches for a lot of automakers. (Well, it was unexpected if you looked at the Chinese economy with blinders on, like they did.) But General Motors’ China president expects steady growth again, via The Detroit News:

Matt Tsien, GM’s China president, said in a roundtable with reporters in Detroit, that the company has no plans to change its investment plans in what is GM’s largest sales market, representing 37 percent of company sales last year. That comes in a market that is maturing and has shown signs of a slowdown in sales.

“Our outlook is pretty optimistic,” he said.

GM’s sales in China have slowed in recent months and have fallen short of industry growth of about 8 percent so far this year. The company and its joint venture’s sales in China through the first quarter rose 0.2 percent to 963,652.

GM expects sales volume to grow as new launches of vehicles such as the Cadillac CT6 and Chevrolet Malibu XL improve. IHS Automotive predicts light vehicle sales in China will grow 5.4 percent industrywide this year to about 25.8 million.


Reverse: RIP Oldsmobile


Neutral: How Does VW Move Forward In America?

Besides “more better cars Americans actually want to buy.” What else?

Editor-in-Chief @ Jalopnik, 2015-2019.


Porschebago Redux, formerly Mini Mid-life Crisis

“We Only Cheated In Japan” sounds like an album title from a really pretentious indie band.