Mitsubishi sales plummet

CONSUMER demand for Mitsubishi vehicles in Japan fell by almost two-thirds in June after details emerged of how the company covered up car defects.

Mitsubishi, best known in the UK for its Shogun 4x4 vehicles, saw sales in the huge domestic Japanese market tail off drastically.

Sales of Mitsubishi mini-vehicles, those with engines no bigger than 660cc, also fell sharply – these vehicles account for about one in three of all new car sales in Japan.

Altogether, this meant sales in June of Mitsubishi‘s MMC brand vehicles plunged 47.5%.

The figures come just a day after the company‘s chief executive, Yoichiro Okazaki, apologised to shareholders for the dire state of the business and vowed to turn things around.

Mitsubishi is Japan's only money-losing carmaker and faces an uphill struggle to win back consumers after admitting that it had covered up information for years about defects in its vehicles.

Mitsubishi is now looking for more money to pay for a survival plan unveiled in May as the downturn in domestic sales will put extra pressure on finances.

The Tokyo-based company's image has been battered since disclosing earlier this year that it had not kept its promise four years ago to stop hiding car defects.

For decades, the vehicle maker had systematically covered up defects to avoid the costs of carrying out recalls.

Former and current Mitsubishi officials have been arrested on charges of professional negligence resulting in death and other offences in two fatal accidents in 2002 involving Mitsubishi lorries in which wheel and clutch-system defects are suspected.

Police say officials failed to follow orders from authorities to report defects even after promising to stop the cover-ups.

Mitsubishi Fuso Truck and Bus Corporation, which was spun off last year, reported soaring profits on Wednesday but will take a financial hit from the cost of recalls for defective wheels, clutch systems and dozens of other serious defects.

DaimlerChrysler, which boosted its stake in Mitsubishi Fuso in March, has said it is considering demanding compensation from Mitsubishi Motors for damages in the series of recalls. Mitsubishi Motors has a 20% stake in Mitsubishi Fuso.

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