Suzuki shares dive on reports of improper fuel testing


(MENAFN- The Peninsula)

Tokyo:Suzuki shares dived Wednesday on reports that it may have used improper fuel-efficiency testing, the latest bad news for a global auto industry shaken by scandals over deadly defects and emissions cheating.

Investors pressed the sell button on the small carmaker's Tokyo-listed stock which plunged as much as 15 percent in afternoon trading. It closed 9.4 percent lower at 2,613 yen ($24).

The Suzuki news comes after rival Japanese automaker Mitsubishi was hit by fuel-efficiency cheating revelations and as Germany's Volkswagen struggles to drive past a worldwide emissions cheating scandal.

Tokyo-based auto parts giant Takata has also been hit by lawsuits and regulatory probes over claims it hid deadly airbag flaws linked to at least 13 deaths and scores of injuries globally.

Suzuki chairman Osamu Suzuki, a descendant of the company's founding family, is visiting the transport ministry Wednesday to discuss the issue, a firm spokesman said, without elaborating.

He declined to comment on reports by public broadcaster NHK and Kyodo News agency saying Suzuki was using a fuel-economy testing method that was different from one required by government regulators.

They did not give further details, but the Mainichi newspaper quoted unnamed company sources as saying that Suzuki's testing did not result in false fuel-economy data.

Suzuki, which also has a major presence in the Indian market through its Maruti Suzuki unit, sold almost three million vehicles globally last year.

"The company has to make a report on its testing methods at the transport ministry," the Suzuki spokesman said.

"Chairman Osamu Suzuki will report on that today at the ministry."

The 86-year-old executive is expected speak at a news briefing at 4:00 pm local time (0700 GMT) Wednesday.

The transport ministry has ordered all Japan's automakers to probe their own compliance with government testing methods after Mitsubishi admitted last month it manipulated data to make its cars seem more fuel efficient than they were.

Major players Nissan, Toyota, Honda and Mazda have already denied any wrongdoing.

But in a separate case, Seoul said this week it will fine Nissan for allegedly manipulating emissions data on a popular diesel sports utility vehicle sold in South Korea.

The news came as an embarrassment for Japan's number two carmaker, but the company has so far not come under fire for emissions cheating in Japan or anywhere else.

- Testing troubles -

If Suzuki did not cheat on the fuel-efficiency data it supplied -- like Mitsubishi did -- it may not take as big a hit to its reputation and sales, said Koji Endo, managing director at Advanced Research Japan.

"But even so, using a different testing method than the one ordered by the government is a problem," he added.

"And because Suzuki's sales in Japan are a lot larger (than Mitsubishi) it could have a big impact on the domestic market.

"But it really depends on how many models are affected."

Mitsubishi is also expected to submit a report to the ministry on its testing later Wednesday.

Its president Tetsuro Aikawa plans to quit the crisis-hit company, Japan's leading Nikkei business daily said Wednesday.

Last week, Nissan threw an unexpected lifeline to Mitsubishi by offering to buy 34 percent of its shares, in a deal that would give Nissan effective control over the smaller firm.

The scandal -- reported to cover almost every model sold in Japan since the early 1990s -- also includes mini-cars produced by Mitsubishi for Nissan as part of a joint venture.

It was Nissan that first uncovered problems with the fuel economy data, but Mitsubishi has said Nissan had no part in the cheating.

Nissan's top executive warned last week that he would kill the $2.2 billion offer if the Mitsubishi scandal spreads beyond Japan.

AFP


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