Nissan Has Conducted Unauthorized Vehicle Checks Since 1979

Updated on
  • Finding to be part of a report by team investigating practice
  • Subaru also considers vehicle recall after similar lapse

Nissan Said to Have Conducted Faulty Inspections

Nissan Motor Co. conducted vehicle inspections that don’t comply with Japanese regulations for almost four decades, raising questions about the company’s internal controls.

The company’s manufacturing division likely will take responsibility for the process, according to a person familiar with the situation who asked not to be identified because the information isn’t public. The regimen, which the government deemed faulty last month, has existed since at least 1979, according to an external investigation team the carmaker commissioned, said the person. The team’s report will be submitted before the Yokohama-based company’s Nov. 8 results announcement.

The team will release details of the investigation and suggest measures to ensure the problem doesn’t recur, according to a statement from the company.

The revelation broadens a crisis in Japanese industry, with manufacturers acknowledging disarray in quality control enabled by breakdowns in bureaucratic processes. Subaru Corp. also said it allowed uncertified workers to inspect vehicles before shipment. with Kobe Steel Ltd. admitting to falsifying product quality and Takata Corp. filing for bankruptcy earlier this year after revelations that its air bags injured automobile passengers rather than protecting them.

The Nissan inspection affair reflects a cultural crisis for a nation whose image and culture is intertwined with its industry: Chief Executive Officer Hiroto Saikawa has been criticized by local media for not bowing long enough while apologizing about the incident, as is customary in Japan. Saikawa, 63, who was handpicked by Chairman Carlos Ghosn to run the carmaker earlier this year, has promised to investigate the matter.

Shares of Nissan dipped on the news, but ended 0.2 percent higher Friday in Tokyo. The benchmark Nikkei 225 index jumped 1.2 percent and closed at the highest level since 1996.

Nissan traces its roots to the 1930s. Jidosha-Seizo Kabushiki-Kaisha was established on Dec. 26, 1933, taking over all the operations for manufacturing Datsuns from the automobile division of Tobata Casting Co., Ltd.. That company name was changed to Nissan Motor Co. on June 1, 1934, according to Nissan’s website.

The 1970s were the years of the Oil Shock, which helped catapult the Japanese automakers into the global stage. The Sunny was one of the most popular models of Nissan during that time along with other models such as Silvia, Cedric and Datsun. That decade was also when Nissan opened its factory in Kyushu.

Revelations late last month that Nissan technicians who weren’t registered with Japan’s transport ministry signed off final inspection of vehicles triggered a recall of about 1.2 million automobiles and a temporary shutdown of all production at the manufacturer’s factories in Japan for local sales.

No Safety Issue

The company has said models exported from Japan aren’t involved in the recall as the quality certificate is a Japan-specific requirement by the ministry. There are no safety issues with the vehicles, the company has said repeatedly.

Nissan is confident sales in Japan will recover within this fiscal year, Chief Performance Officer Jose Munoz said in an interview with Bloomberg Television at the Tokyo Motor Show this week.

An internal investigation by Subaru found that workers training to be certified were involved in inspections. The company is considering recalling 255,000 affected vehicles, which is likely to cost the automaker more than 5 billion yen ($44 million), officials told reporters Friday.

After the initial revelations of uncertified inspection, an external team probing the lapses found that some Nissan plants had transferred final vehicle checks to other lines. As a result, employees who were not internally registered as final vehicle inspectors performed the check. The company will reconfigure the inspection process, and plans to add additional final inspectors, Saikawa said this month.

— With assistance by Kyunghee Park, Kazunori Takada, Nao Sano, and Kevin Buckland

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