By Chang-Ran Kim
TOKYO (Reuters) - Mitsubishi Motors Corp's (T:7211) shares slid for a second straight day, hitting a record low after it admitted to manipulating fuel-economy data, stirring worries of compensation costs and fines in its biggest scandal since a defect cover-up a decade ago.
The stock has lost a third of its market value, or $2.5 billion, in two days after Japan's sixth-biggest automaker said it had manipulated test data to overstate the fuel economy of 625,000 cars, a situation the government called extremely serious.
The issue came to light after Nissan Motor Co (T:7201), which markets a model made by Mitsubishi, found a discrepancy in fuel efficiency test data. It affects two models - Mitsubishi's eK mini-wagon and Nissan's Dayz, with both automakers saying they will halt sales of the vehicles.
JPMorgan (NYSE:JPM) auto analyst Akira Kishimoto estimated the cheating could cost Mitsubishi more than 50 billion yen ($450 million), including payments to consumers, the costs of replacing parts, and compensation to Nissan.
And while Mitsubishi said the cars were sold only in Japan, the impact could be felt wider.
"In addition to the costs of the scandal, the secondary effects on worldwide sales could be very large," Kishimoto wrote in a note to clients, adding that the automaker has tied its brand to environmentally friendly technology with its fuel-sipping plug-in hybrids and fully electric vehicles.
Revelations of the cheating follow a cover-up scandal that brought Mitsubishi close to the brink about a decade ago, when the automaker admitted to systematically concealing defects over decades. It was Japan's worst automotive recall scandal at the time.
On Thursday, the shares were untraded for the whole day as they were swamped with sell orders - which sometimes happens when there is particularly bad news for a company. Tokyo stock exchange rules do not allow trades when there is a huge imbalance in buy and sell orders but shares close at their last indicated price.
Japan's transport ministry has ordered the company to submit a full report on test manipulation within a week,
"We want the whole picture of the misconduct clarified as soon as possible, and want a strict response and the safety of automobiles to be ensured," Chief Cabinet Secretary Yoshihide Suga, the government's top spokesman, told a news conference.
The transport ministry has also ordered Japanese automakers to submit fuel economy test data by May 18.
Mitsubishi, which has annual sales of just over 1 million cars, is the first Japanese automaker to report misconduct involving fuel economy tests since Volkswagen AG (DE:VOWG_p) was discovered last year to have cheated diesel emissions tests in the United States and elsewhere.
People briefed on the matter told Reuters Volkswagen and U.S. officials had reached a framework deal under which the automaker would offer to buy back almost 500,000 diesel cars that used sophisticated software to evade U.S. emission rules.
South Korean car maker Hyundai Motor Co (KS:005380) and affiliate Kia Motors Corp (KS:000270) in 2014 agreed to pay $350 million in penalties to the U.S. government for overstating their vehicles' fuel economy ratings. They also resolved claims from car owners.