February 26, 2016 / 2:53 PM / 3 years ago

Nokian Tyres admits use of better-quality tyres in tests

HELSINKI, Feb 26 (Reuters) - Finland’s Nokian Tyres said on Friday that it had supplied special high quality tyres for tests by motoring journalists until last year, leading to stronger test scores that helped to garner good publicity.

“The tyres were made especially for the tests and had better features than the commercially available models. Our guidelines now prohibit such actions, and I can ensure, that use of custom tyres ended last year,” Nokian Tyres’ Chief Executive Ari Lehtoranta told Reuters.

Shares in the company fell by nearly 10 percent at one point on Friday after financial newspaper Kauppalehti reported that the company had manipulated tyre tests. They were 6.6 percent lower at 1440 GMT.

The motor industry is particularly sensitive to accusations of test manipulation after carmaker Volkswagen last year admitted installing illegal software to conceal the true level of emissions of its diesel vehicles.

Citing internal emails and company sources, Kauppalehti said that for the past decade Nokian Tyres had systematically provided car magazines and other media testing its tyres with better quality tyres than its standard models to increase grip and performance in tests.

The report followed an interview Lehtoranta gave to Kauppalehti on Wednesday, in which he said custom-made tyres had been used in media tests.

Nokian Tyres, which makes tyres for major car manufacturers for passenger cars, vans and trucks, has flagged its strong test results extensively in its marketing and advertising.

“We are not expecting this to affect our sales, but we have to live with the fact that this harms our brand,” Lehtoranta said on Friday.

Nokian Tyres apologized for its actions in a press release on Friday afternoon, and said the company regrets the mistakes it made in the past.

“The market reaction makes sense,” said Sauli Vilen, analyst at Inderes Equity Research.

“Their brand and technological expertise are now being questioned, and possible legal actions only add to the uncertainty.” (Reporting by Tuomas Forsell; Editing by Susan Fenton and Keith Weir)

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