Mitsubishi Motors braced for a net loss of 145 billion yen (1.4 billion dollars) for the current financial year due to massive compensation costs related to its fuel economy scandal, it said Wednesday.

The figure will mark the first net loss in eight years, compared with a net profit of 72.6 billion yen in the previous financial year, Mitsubishi Motors said in a statement.

The carmaker also predicted an operating profit of 25 billion yen for the year through March 2017, down 81.9 per cent from the year before, while sales are estimated at 1.9 trillion yen, down 16 per cent.

Domestic vehicle sales are expected to plunge 41 per cent in the year, the carmaker said.

Japan's sixth-largest carmaker revealed in April that it had falsified data on fuel economy tests for four mini vehicles, including two manufactured for Nissan Motor.

The scandal spread to other models in Japan as the manufacturer of the Pajero sport-utility vehicle and the i-MiEV electric car acknowledged last week it had found irregularities in fuel economy data for all 29 models in the past 10 years.

On Tuesday, the Transport Ministry said its own tests showed the carmaker exaggerated mileage on its vehicles by up to 16 per cent.

Nissan agreed last month to take a 34-per-cent stake in Mitsubishi Motors for 237 billion yen in order to turnaround the embattled carmaker.

In 2000, Mitsubishi was rocked by a recall-cover-up scandal. The carmaker admitted it had concealed defect information for its vehicles for decades.

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