TOKYO (Reuters) - Mitsubishi Motors Corp <7211.T> expects to post a net loss this year after a scandal around manipulated fuel economy tests triggered hefty compensation costs and a drop in vehicle sales, Kyodo news agency reported on Tuesday.
Japan's sixth-largest automaker admitted in April to overstating the mileage on four of its minivehicles, including two models it produced for Nissan Motor Co <7201.T>, problems it blamed on competitive pressures and poor oversight.
Under a month later, Nissan agreed to take a one-third controlling stake in the group.
Asked to comment on the unsourced report, Mitsubishi Motors chief executive Osamu Masuko said on Tuesday the company would seek to contain the cost of the scandal in this financial year, but he did not say whether that would drag it into the red.
"(The scandal) will likely hurt us this year, and the extent to which we can recover from it, will depend up on how well we can leverage our synergies with Nissan," he said.
The automaker said last week it planned to give owners of four minivehicles close to $1,000 in compensation for its overstating of mileage readings, part of reimbursement costs that will total at least $600 million.
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It said on Tuesday it was also setting aside up to 9 billion yen ($86.19 million) to reimburse customers for lost "eco car" tax breaks for models with overstated mileage readings, adding it planned to resume production of those vehicles early next month.
Mitsubishi Motors had already announced it expects a charge of 50 billion yen ($480 million) this business year due to compensation costs.
Separately, Japan's government said sales of Mitsubishi vehicles with overstated mileage levels could resume. Production will start in early July, Masuko said.
Government tests had showed that fuel economy for the minivehicles was on average 11 percent lower than their advertised readings but the transport ministry said that this would not lead to change in their vehicle classification.
(Reporting by Naomi Tajitsu; Editing by Edwina Gibbs and Clarence Fernandez)