Home > industry > manufacturing > Mitsubishi Motors makes cheating in tests look endemic

Frankfurt: Mitsubishi Motors’ admission that it falsified fuel consumption figures on more than 600,000 vehicles seems a peculiarly Japanese problem—at first glance.

The cars concerned are so-called kei cars—small-engined vehicles that benefit from tax breaks and other incentives in Japan and are thus wildly popular there, despite their yoghurt-pot looks.

But, of course, we’ve been here before. Mitsubishi Motors’ admission is only the latest scandal to undermine consumer faith in the claims car makers make about their vehicle emissions and fuel economy. Hyundai, Kia, and Volkswagen have all been probed.

No car buyer needs telling that the vehicle rarely achieves the miles-per-gallon claimed on the sticker in the real world. Reviewers have long pointed this discrepancy out.

And even before the Volkswagen scandal broke, environmental groups were warning that nitrogen oxide emissions in Europe were much higher than they should be. Here’s the International Council on Clean Transportation in 2014, for example.

Mitsubishi Motors appears to have manipulated the rolling resistance generated by the tires in the laboratory to boost the car’s fuel economy.

This isn’t a world away from the perfectly legal—but ethically dubious—techniques carmakers in Europe used for years to game lab tests, from taping over door cracks to overinflating tires.

Following the VW scandal, rival carmakers were at pains to insist they hadn’t cheated, their vehicles complied with various regulatory frameworks and were properly certified.

But if the tests themselves are inadequate or oversight is lax, those claims of innocence count for very little.

A more stringent common fuel economy testing procedure called the Worldwide harmonized Light Vehicles Test Procedures (WLTP) is due to come into force in Europe from 2017, which should go some way towards alleviating fuel economy discrepancies.

Peugeot and General Motors’s Opel unit are among car makers to have announced they will publish more realistic figures for their vehicle emissions from later this year.

But following fierce lobbying from the car industry, European Union (EU) lawmakers watered down plans to cut the level of permissible nitrogen oxide emissions.

Car makers have long traded at relatively low multiples of their earnings due to their tendency to destroy shareholder capital.

Volkswagen and Mitsubishi Motors’ actions suggest the industry deserves even larger discount: firstly, because it’s all too conceivable that further cheating will come to light and secondly, because the costs of complying with tighter emissions standards will be higher in future and consumers may be unwilling to pay for this.

Carlos Ghosn, the chief executive officer (CEO) of Renault (a French car maker with its fair share of emissions questions) and Nissan (which bought some of the affected Mitsubishi Motors cars) told Bloomberg television in a interview last month that there will always be emissions conditions “the regulator cannot regulate".

“If you really worry about emissions the only solution is electric cars—here you have zero emissions, you have nothing to measure," he said.

Ghosn’s answer was self-serving—Renault sells lots more electric vehicles than most—but it’s hard to fault his logic. The sooner carmakers abandon the combustion engine and switch to battery vehicles, the faster scandals surrounding emissions and fuel economy can become a relic of the past. If the emissions debacle helps bring that moment closer, so much the better. Bloomberg

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