Subaru shares fall 7% after fuel economy falsification claims

Shares in Subaru fell more than 7% on Wednesday after allegations the carmaker falsified fuel economy tests.

Subaru said it was investigating claims made by Japanese broadcaster NHK, which cited unnamed sources saying the company may have falsified data on vehicle mileage readings during final inspections on vehicles sold in Japan.

Report published

The revelations followed the release of a report on Tuesday in which Subaru addressed findings earlier this year that unqualified staff had been conducting final inspections.

The report concluded that the company would improve its training of staff for, and oversight of final vehicle inspections. No safety issues related to the scandal have been reported.

Its statement concluded: " The most important task of Subaru’s management will be to thoroughly carry out the recurrence prevention measures, with all employees working collectively under the responsibility of the management team, and to thereby restore the trust that the company has lost."

Mitsubishi Motors has also been implicated in data falsification scandals this year: Wikimedia Commons

Japan Inc under scrutiny

Mitsubishi Motors was also embroiled this year in a scandal involving falsified fuel economy data, admitting it had overstated the efficiency of 625,000 cars.

Investor reaction to Mitsubishi's scandal wiped around 40% off its market value in three days in April.

“This is a serious problem that could lead to the loss of trust in our country’s auto industry,” said Transport Minister Keiichi Ishii at a news conference at the time.

Indeed, Subaru and Mitsubishi are not alone in being implicated in quality inspection scandals this year. Nissan's inspection crisis involved the recall of more than a million vehicles.

And the problem extends beyond the production of motor vehicles after Kobe Steel revealed it had falsified quality data for products it supplied to the auto industry.

Market reaction

Shares in Subaru ended 7.06% lower at Y3,478 on the Tokyo Stock Exchange.

Mitsubishi Motors was down 1.1% at Y806, while Nissan Motor gained 0.36% at Y1,111.50 and Kobe gained 0.38% to Y1,051.