(Bloomberg) -- Mitsubishi Motors Corp.’s disclosure that itmanipulated fuel economy tests risks putting the Japanesecarmaker back in a familiar position: needing help from Mitsubishigroup companies to stay in business.

President Tetsuro Aikawa bowed in apology Wednesday beforebriefing reporters on the extent of the cheating. About 625,000minicars produced over the past three years, three-quarters ofwhich it supplied to Nissan Motor Co., were marketed as being asmuch as 10% more fuel efficient than they were by understating howmuch air and tire resistance they encounter out on the road.

Flawed method

A bigger issue may lie in store: Mitsubishi Motors has been testingpassenger cars using a method not compliant with Japanese standardssince 2002, according to Aikawa. While the company said it’sunclear whether the flawed method enhanced or reduced fuel economy,further revelations that ratings have been exaggerated mayoverwhelm the carmaker, which has the lowest level of cash amongits Japanese peers. The company required two rounds of bailoutsmore than a decade ago from Mitsubishi group companies to survive ascandal involving a cover-up of deadly defects.

“Since the cover-up of recalls in the 2000s, we have tried toreinforce compliance within the company, but a compliance sensestill hasn’t penetrated to every employee,” Aikawa said Wednesday.“I deeply understand how difficult it is to strengthen compliance,and I think this is a very shameful issue.”

Mitsubishi Motors’ shares fell 15% for the biggest decline inmore than a decade in Tokyo trading on Wednesday, cutting itsmarket value to 721 billion yen ($6.6 billion).

The deliberate use of biased data led to fuel efficiency beingoverstated for the Mitsubishi eK Wagon and eK Space, which are also sold by Nissan as theDayz and Dayz Roox. The mishandling of the test data wasintentional, Aikawa said.

Government tax rebates

The violation could result in Mitsubishi Motors having to pay backgovernment tax rebates its minicars shouldn’t have been eligiblefor, said Ryugo Nakao, an executive vice president. The company ischecking whether its improper conduct affects overseas models andsaid it’s unable to estimate the impact on its business at thispoint.

Mitsubishi Motors has been seeking to restore confidence in itsvehicles after a series of scandals more than 10 years ago led thecarmaker to seek multiple bailouts from Mitsubishi group companies.Mitsubishi Motors had covered up defects involving flawed axlesthat could lead wheels to detach.

“It’s not the first time for Mitsubishi to have this kind ofissues and this definitely won’t help them rebuild theirreputation,” said Seiji Sugiura, an analyst at Tokai Tokyo ResearchCenter. “Investors are shocked. Those who didn’t take action todaymay rush to sell tomorrow.”

Mitsubishi Motors reported having 484.7 billion yen in cash andequivalents as of the end of December, the least among Japan’smajor automakers and about one-tenth the cash pile on Toyota MotorCorp.’s balance sheet.

The company’s meager financial resources leave it stretched thinfor research and development. Mitsubishi Motors forecastspending 82 billion yen for the fiscal year ended in March. Bycontrast, Toyota would have had to spend about 88 billion yen onaverage per month to meet its annual projection.

Data manipulation

It’s unclear whether Mitsubishi Motors’s data manipulationwill compromise its minicar alliance with Nissan, which discoveredthe discrepancy. Nissan voluntarily suspended sales of the Dayz andDayz Roox models Wednesday until Mitsubishi Motors provided furtherclarification, said Jonathan Adashek, a Nissan spokesman.

The episode deals another blow to an industry already dealingwith reputation damage. Volkswagen AG admitted last year to riggingdiesel models with software to meet U.S.emissions standards. Hyundai Motor Co. and Kia Motors Corp. agreedto pay fines and forfeit emissions credits in late 2014 to settleU.S. claims they overstated mileage ratings. Ford Motor Co. alsolowered ratings for hybrid models in 2014 and 2013.

The scandal also draws parallels to another crisis engulfing aJapanese auto company at the center of the industry’s largest safety recall: troubled partssupplier Takata Corp. The company has admitted tomanipulating air-bag inflator test data, prompting a rebukefrom its biggest customer Honda Motor Co.

Takata is now seeking sponsors that would replenish its capitaland allow it to emerge as a new company, a person familiar with thematter said this month.

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