Suzuki today admitted to finding "discrepancies" in its fuel-economy and emissions testing, but the firm denied deliberately manipulating data to make cars seem more efficient.
The remarks from the Japanese small-car maker came in the wake of rival Mitsubishi Motors' shock admission last month that it had cheated on fuel-efficiency tests for decades.
Mitsubishi said its president Tetsuro Aikawa would resign over the scandal, which has left the company's reputation in tatters.
Japan's transport ministry has ordered all domestic automakers to probe their own compliance with government testing methods following Mitsubishi's revelations that it manipulated fuel-economy data.
Suzuki joined that list today, although it admitted that it was not using tests required by the government.
"Any wrongdoing, such as manipulation of fuel efficiency data, were not found," it said.
"Some discrepancies were found in the automobile emission and fuel-efficiency testing process" between the method required by the government and what Suzuki did, the company statement added.
Sixteen models and about two million cars were affected, but the problem did not extend to cars sold outside Japan, according to Suzuki, which has a major presence in India.
Suzuki said it has been using the improper testing since 2010.
The firm's shares dived as investors took it as the latest bad news for a global auto industry shaken by scandals over deadly defects and emissions cheating.
Suzuki stock plunged as much as 15 per cent in afternoon trading. It closed 9.4 per cent lower at 2,613 yen (USD 24).
The Suzuki news comes amid the Mitsubishi revelations and as Germany's Volkswagen struggles to drive past a worldwide emissions cheating scandal.
Tokyo-based auto parts giant Takata has also been hit by lawsuits and regulatory probes over claims it hid deadly airbag flaws linked to at least 13 deaths and scores of injuries globally.