Mitsubishi has admitted to falsifying fuel economy data after discrepancies were found during tests on cars it produced for fellow Japanese carmaker Nissan.
Around 625,000 vehicles are said to have been affected, 468,000 of them produced for Nissan. The models are very small cars with small engine outputs, designed for and extremely popular in congested Asian cities.
While all the cars were sold on the Asian market, the company said it would conduct an investigation into products sold elsewhere as part of its response.
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Mitsubishi admitted it had "conducted testing improperly to present better fuel consumption rates than the actual rates; and that the testing method was also different from the one required by Japanese law".
The company claims the cheating was carried out by a handful of rogue engineers and that senior officials were unaware.
"The wrongdoing was intentional. It is clear the falsification was done to make the mileage look better. But why they would resort to fraud to do this is still unclear," said president Tetsuro Aikawa, who joined senior executives in bowing solemnly at a news conference to announce the information.
In a much more low-tech affair than Volkswagen's use of a defeat device, Mitsubishi manipulated tyre pressure values during tests in order to "flatter" fuel economy.
The carmaker has taken the affected models off sale, as has Nissan, who will open talks with its manufacturing partner over compensation.
Mitsubishi is one of Japan's largest carmakers and sold more than one million vehicles last year. The announcement sent shares down 15 per cent in the country on Wednesday morning – the biggest one-day drop in 12 years.
According to the BBC, the company struggled for years to regain the trust of consumers in Japan after a defect scandal in the early 2000s that covered up problems such as components falling off vehicles, faulty clutches and failing brakes.
The Guardian says the company joins Hyundai, Kia, and Ford in the list of carmakers that have mishandled fuel consumption figures. Hyundai and Kia agreed to pay $350m (£244m) to the US in 2014 for overstating the efficiency of some of its models.
