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Fuel scandal drives Mitsubishi to first loss in 8 years

Mitsubishi: We cheated in fuel tests

Mitsubishi Motors has revealed the heavy financial toll from its fuel economy scandal.

The Japanese automaker says it expects to post a net loss of 145 billion yen ($1.4 billion) for the current financial year. That would be the first time it’s plunged into the red in eight years.

Mitsubishi shocked its customers in April when it announced it had manipulated fuel economy tests affecting hundreds of thousands of vehicles in Japan. The mileage scandal later spread to include more models, and the company admitted the flawed testing goes back a quarter century.

The affair has hammered Mitsubishi’s stock price, resulted in the resignations of two top executives and led Nissan Motor to step in with a multibillion dollar investment to prop up the embattled company.

Related: Mitsubishi Motors president quitting amid scandal

Mitsubishi said Wednesday that the negative financial impact from the improper testing is expected to amount to 205 billion yen ($2 billion) during this financial year, which ends in March 2017.

Investors appeared to shrug off the grim numbers, with the company’s shares rising 2.5% in Tokyo. But the stock is still down 37% since the scandal broke.

Mitsubishi has said its investigations showed that company managers were under intense pressure to keep pace with fuel economy rates reported by competitors, and used a procedure to calculate efficiency that did not comply with Japanese law. It has admitted that rebuilding trust with customers will be difficult.

— Yoko Wakatsuki contributed reporting.

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