India offers Suzuki Motor a cushion against the fallout from improper testing. Like smaller rival Mitsubishi Motors, the Japanese carmaker has spooked investors by admitting it ran dodgy fuel-economy tests. By Suzuki's account, the violations sound less serious. In any case, so much of Suzuki's value hinges on its Indian subsidiary that the risks to shareholders appear limited.

Suzuki shares plunged more than 9 per cent on May 18 as investors braced for a detailed account of how the auto industry's latest miscreant had veered off the road. The full admission, when it came, seemed pretty tame when compared with Takata's exploding airbags, Mitsubishi's quarter-century of bad tests, or the $18 billion bill Volkswagen has run up for understating diesel emissions.

Suzuki said it had created composite data, from separate tests of tyres, brakes, transmission and so on, rather than relying on actual vehicle results because its test ground was on a windy hill by the seaside. But Suzuki said this made little difference to the final results and it was not assuming any impact on group operating results.

Japanese authorities may yet take a dim view of Suzuki's infractions, even if the end-results weren't too far off. Fines could follow. The bad publicity could also dent domestic sales.

Still, even if Suzuki is being overly optimistic, shareholders have some pretty robust downside protection, thanks to the group's 56 per cent holding in Indian-listed Maruti Suzuki . Over time that stake has become a bigger and bigger part of the parent's overall value. It is now worth about $10 billion, while Suzuki's overall market value is merely $11.8 billion after the latest drop. So, very little value is being ascribed to the rest of Suzuki, even if a big “conglomerate discount” is slapped on the Maruti Suzuki stake. That makes it hard to see Suzuki stock falling much further.

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.)

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