Subaru Mulls Vehicle Recall as Japan Inspection Scandal Widens

  • Carmaker says internal probe found improper checks on cars
  • Violation comes after similar issue found at Nissan factories

Subaru Said to Have Used Uncertified Inspectors

Subaru Corp. is considering recalling as many as 255,000 vehicles after a lapse in its inspection process, widening the quality-control scandal that erupted at Nissan Motor Co. almost a month ago.

An internal investigation found improper checks on cars and the company will report to the transport ministry on Oct. 30, Subaru said in a statement Friday. The recall may cost more than 5 billion yen ($44 million) for the automaker, 17 percent owned by Toyota Motor Corp., Atsushi Osaki, vice president for quality control, told reporters in Tokyo.

Shares of Subaru fell 2.6 percent in Tokyo on Friday, the biggest decline since June 5. In comparison, the benchmark Nikkei 225 index rose 1.2 percent.

Bloomberg’s Brian Fowler reports on Subaru’s admission of using uncertified inspectors.

(Source: Bloomberg)

Subaru’s is the latest in a string of irregularities that has tainted Japan’s reputation for quality manufacturing. While Takata Corp.’s exploding airbags were the subject of the industry’s biggest ever recall, Kobe Steel Ltd. admitted this month to falsifying data related to the durability of some of its products, shocking customers. Nissan suspended production for the Japan market to fix its inspection process after ordering the recall of about 1.2 million vehicles.

The inspection certificate is a requirement for cars sold locally, so exports are not affected. Nissan has repeatedly said the safety of vehicles are not compromised. 

Nissan Said to Have Conducted Unauthorized Checks Since 1979

Subaru allowed uncertified workers to inspect vehicles before shipment, Chief Executive Officer Yasuyuki Yoshinaga told reporters Friday in Tokyo. The probe found that workers training to be certified were involved in inspections at Subaru’s main factory complex in Gunma prefecture. All three lines at the plant were affected, the company said.

Yasuyuki Yoshinaga

Photographer: Kiyoshi Ota/Bloomberg

“The final inspection process is very important and we acknowledge that we did not meet requirements,” Yoshinaga said. “We used the same process for more than 30 years without realizing that it did not meet ministry requirements.”

The faulty inspections were halted immediately after they were discovered on Oct. 3, according to Subaru. The company will rethink its inspection process from scratch.

Subaru produced 727,741 units of vehicles in Japan last year and exported 582,708 of them. Domestic sales of Subaru have declined for three straight years due to a slump in mini-vehicle sales. The recall may include a model made for Toyota.

— With assistance by Jie Ma

    Before it's here, it's on the Bloomberg Terminal.