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False Sales-Report Allegations Denied by U.S. Mitsubishi

September 19, 2000|JOHN O'DELL | TIMES STAFF WRITER

The U.S. arm of Mitsubishi Motors Corp., which has avoided being stained by bribery and recall scandals that have rocked its parent in Japan, may be caught up in a brewing scandal of its own involving alleged phony sales reports by numerous dealers and regional corporate sales offices.

Industry trade journal Automotive News reported Monday that for a period of at least 18 months, through June, various Mitsubishi dealers and regional sales offices filed false reports--listing fictitious customer names such as "Supra Mann," whose address was given as 'Lois Lane"--to gain credits for sales that hadn't yet happened.

The documents--called retail delivery reports, or RDRs--are filed when a new automobile is sold. When an RDR is entered into an auto maker's tally book, it unleashes valuable cash incentives for the selling dealer. It also starts the clock running on the warranty.

The article alleged that as many as 21,000 Mitsubishis were involved--a number the company says is grossly inflated--and that the false RDRs were canceled when the cars and trucks ultimately were sold.

Mark Rechtin, the Automotive News reporter who wrote the article, said the story, citing revelations by unnamed Mitsubishi managers and dealers as well as company sales documents obtained by his publication, "speaks for itself."

Executives at Cypress-based Mitsubishi Motor Sales of America have acknowledged that some false RDRs were filed in the Southeast U.S. last year but insist that the tally is only about 100 vehicles.

The company launched its own investigation "as soon as the allegation about RDRs in the Southeast region" was brought to executives' attention in May, said Pierre Gagnon, executive vice president and chief operating officer.

No cases of false RDRs in California have been found, the company said. Falsifying automotive sales data is illegal in California.

And Mitsubishi says no warranty will be shortened because of a false, early sales report.

"Our customers are not impacted by these allegations," Gagnon said.

When the cars ultimately were sold to real customers, new RDRs were filed, which canceled the initial reports. That kept Mitsubishi's annual sales figures accurate, said spokesman Kim Custer.

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