TOKYO: Mitsubishi Motors Corp forecast a net loss of 145 billion yen ($1.4 billion) for this business year as it faces hefty compensation costs and falling sales in the wake of a mileage-cheating scandal.

The company admitted in April to overstating the mileage on four of its minivehicles, including two models it produced for Nissan Motor Co - problems it blamed on competitive pressures and poor oversight.

Nissan has agreed to take a one-third controlling stake in the group, offering a lifeline for its smaller rival.

The expected loss would follow a 39 percent fall in net profit to 72.6 billion yen in the past business year, when Mitsubishi booked a special loss of 19.1 billion yen related to the mileage manipulation.

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.

It said on Tuesday it was also setting aside up to 9 billion yen ($86 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.