Mitsubishi Motors said that it will book a $480m charge this fiscal year to compensate customers who are affected by its fuel economy manipulation scandal.
Chairman Osamu Masuko said that the company will pay a compensation of ¥100000 for four minvehicle models including eK Wagon and eK Space along with Dayz and Dayz Roox, the models it manufactured for Nissan Motor.
Apart from these models,Mitsubishi Motors said that it will pay compensation for other models such as Pajero and Colt,whose data was obtained recently.
The company agreed to pay ¥30,000 per vehicle for a total number of about 100,000 vehicles.
The Japanese automaker admitted to rigging fuel economy tests by not adhering to standard Japanese tests and sticking to mileage on paper and not on real-life tests.
The admittance to the scandal has led to drop in sales and drop in prices of its shares. About 32% of the company's value in share value was wiped out due to this scandal.
Mitsubishi Motors president Tetsuo Aikawa and vice president Ryugo Nakao will retire from their posts in late June.
Recently, Nissan offered to invest $1.8bn in Mitsubishi Motors and sought to take control about one third of the company's stake in the process.
One of Nissan's top executives, Mitsuhiko Yamashita will join Mitsubishi Motors as the head of R&D division.
The issue occurred at the managerial level, where the company managers felt pressure from news of competitors' increased mileage. This led to relying on methods not compliant with Japanese environmental regulations.
The company has however said that no evidence of manipulation was found in an internal investigation. It also admitted that due to such repeated wrongdoings, it will be difficult to regain consumers' trust.
Right after the scandal came to light, the Japanese government ordered for industry-wide emissions tests. During one of these tests, Suzuki Motor also admitted that it too reported false mileage and fuel efficiency results for some of its models sold in Japan.
