Future of scandal-hit Mitsubishi Motors in doubt - again

Japan : Sales are falling off a cliff. Its reputation is in tatters. And even its top executive is talking about whether the automaker will survive.

Mitsubishi Motors' future is hanging in the balance for the second time in a decade after a bombshell admission that it has been cheating on fuel-economy tests for years.

The crisis is threatening to put the company into the ditch permanently, but some analysts think the vast web of shareholdings among Japanese firms may just save it from the scrap yard.

"I really think the future of Mitsubishi Motors is grim," said Hideyuki Kobayashi, a business professor at Hitotsubashi University, who authored a book about the company's struggles with an earlier cover-up.

"It would be silly to buy a Mitsubishi car after this (scandal). This isn't the first time this has happened."

In 2005, the maker of the Outlander SUV and Lancer cars was pulled back from the brink of bankruptcy after it was discovered that it covered up vehicle defects that caused fatal accidents.

The vast Mitsubishi group of companies stepped in with a series of bailouts, saving the embattled firm.

But it is not clear if they would be so willing to help this time around as the automaker faces possibly huge fines, lawsuits and customer compensation costs.

The scandal has shone a light on the cozy relationships between Japanese firms -- including the big equity stakes they hold in each other -- which have come under renewed scrutiny in recent years.

Critics say these mutual investments promote complacency and insulate mediocre management from criticism, while Japan's premier is pushing to unwind this web of investment ties to help improve the country's woeful corporate governance record.