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Friday, 21st December 2012
In Business In Japan,

Japanese transport ministry warns Mitsubishi over handling of vehicle recalls

Japanese car giant Mitsubishi has once again hit the headlines as it was forced to increase the number of cars it needed to recall because of an issue with oil leaking due to a faulty engine part.

Some two years previously, the motor manufacturer had to recall close to 250,000 of its vehicles as a result of the problem, this has now increased to approximately 1.7 million cars.

The recall is likely to have a significant impact on the company's finances as initial estimates put the cost at 7.5 billion yen (£54 million).

As a result of the incident, the company's share prices dropped by 5.5 per cent to settle at 86 yen in Tokyo.

Japan's transport ministry has suggested that Mitsubishi has not handled the issue in the appropriate manner.

In a statement the ministry said that it "warned the company on having been passive in its handling of the recalls, for having made inappropriate decisions, for providing the ministry with inappropriate explanation, for being insufficient in clarifying the causes of the recall".

Koji Yokomaku, Mitsubishi Motors' general manager for quality, suggested that the manufacturer had decided not to take broader action following the initial recall as the faulty seals had not caused safety issues.

The problem is limited to those vehicles produced within Japan, the company confirmed.

As a result of the company's handling of the problem, Japan's transport ministry said it would be conducting on-site inspections, and Mitsubishi has been ordered to report on the measures it has taken to improve the issue by March 2013.

In more positive news for the company, it announced today (December 21st)  that total global production for November was 21.6 per cent up on the same period last year, which was "the fourth consecutive monthly year-on-year increase since July this year".

However, it also revealed that sales of vehicles in Japan were some 8.8 per cent less in November 2012 compared to the same month in 2011.


Written by Mark Smith