1. Mitsubishi says employee-buying helps boost vehicle sales amid scandal

Mitsubishi says employee-buying helps boost vehicle sales amid scandal

Mitsubishi Motors Corp said buying by employees helped boost sales in Japan of some scandal-tainted vehicles in August, a rare bright spot for the embattled automaker as it struggles to regain customers after admitting to cheating on mileage data.

By: | Tokyo | Updated: September 1, 2016 5:40 PM
"Our employees around the country have been buying our minivehicles in an effort to support the company," a Mitsubishi Motors spokesman told Reuters, without disclosing how many vehicles were bought by staff. "We are grateful for this."(Reuters) “Our employees around the country have been buying our minivehicles in an effort to support the company,” a Mitsubishi Motors spokesman told Reuters, without disclosing how many vehicles were bought by staff. “We are grateful for this.”(Reuters)

Mitsubishi Motors Corp said buying by employees helped boost sales in Japan of some scandal-tainted vehicles in August, a rare bright spot for the embattled automaker as it struggles to regain customers after admitting to cheating on mileage data.

Japan’s sixth-largest automaker said on Thursday a 10.8 percent jump in domestic minivehicle sales in August, the first year-on-year monthly rise since May 2014, was driven by its workers buying its eK Wagon and eK Space models, whose fuel economy the automaker admitted to overstating earlier this year.

“Our employees around the country have been buying our minivehicles in an effort to support the company,” a Mitsubishi Motors spokesman told Reuters, without disclosing how many vehicles were bought by staff. “We are grateful for this.”

Mitsubishi also approached its domestic network of suppliers to buy the minicars, offering options and cash-back incentives through the end of the month, suppliers said.

Mitsubishi said it sold 3,362 minivehicles in total last month, thanks to demand across the country, including Okayama in western Japan, where the plant producing the pint-sized vans is located.

The plant had been shuttered for roughly two months through July after Japan’s transport ministry in April ordered Mitsubishi to stop sales of its affected vehicles.

The scandal has wiped off a third of Mitsubishi Motors’ stock market value and prompted the company to seek financial assistance from Nissan Motor Co, which has announced it plans to buy a major stake in the company.

Earlier this week, Mitsubishi said it had incorrectly stated the fuel economy for eight more of its models.
It is not unusual for companies in Japan or elsewhere to lean on employees for sales, especially during tough times, and the sales boost for Mitsubishi from the buying by its staff could yet be temporary.

Last November, Sharp Corp asked its employees to each pick up as much as 100,000 yen ($964.60) worth of its household electronic products when its fate was in question due to massive losses.

Mitsubishi is advertising the eK Wagon for 125,000 yen ($1,207.50), roughly half the average monthly salary in Japan, while offering 10,000 yen worth of options with each sale.

An official from the Japan Light Motor Vehicle and Motorcycle Association said it was not hearing of significant new demand for Mitsubishi minivehicles from regular customers. The manager of Mitsubishi’s Okayama dealership was not immediately available for comment.

The minivehicle sales gains in August came after sales tumbled as much as 75 percent in May-June this year. The fall in sales slowed in July, when production and sales of the eK Wagon and eK Space resumed.

At Nissan, which also suspended sales of two of its minivehicles produced by Mitsubishi due to their falsified mileage readings, sales failed to get a similar boost. Its minivehicle sales fell 23.2 percent year-on-year last month.

A Nissan spokesman said he was unaware of its employees buying its affected models to increase sales. ($1 = 103.6700 yen)

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