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17th of January 2018

Economy



Subaru launches probe over fuel consumption data

Peter Wells in Tokyo

December 20, 2017

Subaru, the Japanese carmaker, has launched an investigation into allegations that its vehicle inspectors falsified fuel economy readings for new cars sold in the domestic market.

The company made the announcement less than a day after it pledged to tighten its inspection process and improve compliance following its October admission that unauthorised technicians had, for decades, been conducting final inspections of vehicles destined for the Japanese market.

Japan’s seventh-largest carmaker by sales had, through its external investigators, been notified that some inspectors assigned to conduct final checks “made allegations about an act to change measurements” on fuel consumption, Subaru said in a statement on Wednesday.

The company said it had not been able to confirm whether such data manipulation had actually taken place, and thus refrained from announcing it.

Subaru’s statement was released after the close of trading in Tokyo on Wednesday. Shares ended the day down 7.1 per cent, their lowest in 18 months, in response to an initial report from broadcaster NHK, citing unnamed sources, the company may have altered fuel economy tests to match data it reported to the Japanese government. The stock was the most heavily traded by turnover on the Tokyo Stock Exchange.

The company made no mention of any investigation into fuel economy data falsification when the independent report, prepared by law firm Nagashima, Ohno & Tsunematsu, into the carmaker’s initial inspection scandal, was released on Tuesday. Nagashima, Ohno and Tsunematsu declined to comment.

The Japanese government requires that new cars sold in the domestic market be given a final inspection by qualified technicians. Export models do not require this inspection. Subaru reported global production of 1.05m units for its full year 2017, with sales of 163,322 vehicles in Japan.

Nissan admitted in late September that unauthorised technicians had been conducting final inspections, prompting the company to recall about 2m vehicles produced in the past three years and suspend domestic production for a fortnight. Subaru made its admission the following month, triggering a recall of about 400,000 cars. In both cases, no safety issues have been discovered.

In April 2016 Mitsubishi Motors admitted some of its employees had falsified fuel economy data on at least 625,000 vehicles. The revelations came hard on the heels of Volkswagen’s diesel emissions scandal.

In an independent report months later, Mitsubishi said its testing methods had not been compliant with Japanese standards since 1991 and that it had used the wrong fuel economy data for all types of vehicle sold in the domestic market.

The scandal resulted in Mitsubishi accepting a $2.3bn lifeline from Nissan, which ultimately brought it into a carmaking alliance with its Japanese rival and France’s Renault.

Subaru and Nissan are among a string of Japanese manufacturers that have, over the past three months, admitted to falsifying product quality data, in some cases for decades. Others include steelmaker Kobe Steel, Mitsubishi Materials and Toray Industries, a global leader in carbon fibre.

On Tuesday Subaru chief executive Yasuyuki Yoshinaga said he and other executives would return part of their pay until next March following the inspection scandal. The move follows similar action by Nissan executives.

Separately, Japan’s Nuclear Regulatory Authority said on Wednesday that rubber seal products from a Mitsubishi Materials subsidiary for which quality data may have been falsified might have been used in two nuclear plants. Kansai Electric Power, the operator of those plants, said there would be no influence on safety and that it had not discovered any problems following an inspection.

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