Nissan Japan Halts Production for Two Weeks Due to Inspection Scandal

Nissan is forced to suspend vehicle production for its domestic market in Japan following the carmaker’s own admission that unauthorized inspectors continued to certify vehicles even after the discovery of the malpractice earlier. Mid-October, Nissan announced the recall of close to 1.2 million vehicles produced in its native Japan for the past three years after news broke out that unqualified technicians carried out the final inspections of the vehicles. Japan’s second largest car manufacturer estimated that the recall will cost the company ¥25 billion (P11.3 billion), but that was before Nissan’s suspension announcement.

A lingering problem

Hiroto Saikawa, Nissan’s chief executive officer, revealed that even after announcing the recall and implementing corrective measures, some plants continued to delegate final inspection processes to unauthorized workers. “We took countermeasures and we resumed production,” Saikawa said on Thursday at its headquarters in Yokohama. “People trusted these countermeasures we had taken and customers bought our cars and we betrayed their trust. This is a very significant problem.” The suspension will give Nissan the necessary time to reconfigure final inspection lines, according to Saikawa. The company will also increase its pool of authorized final inspectors as part of its remedy to the issue.

Export will continue

Saikawa revealed that the company formed a third-party team to investigate the vehicle inspection lapses discovered in some plants. The team uncovered that the erring plants transferred final vehicle inspection check items from the final vehicle inspection line to other lines, and this allowed employees who were not internally registered as final vehicle inspectors to perform part of the last vehicle inspection processes. Saikawa took office as Nissan’s CEO last April. This recent scandal is the first big test for the Japanese make’s newest head. “If I see any weakness, I am ready to take drastic measures,” he said. “This is my job, which is imminent, and I am going to lead it.” Despite the production halt, Nissan Japan will continue to produce vehicles for export, including its huge North American hit the Rogue SUV crossover model, and its recent electric offering, the Leaf. Nissan assured that the certification mess does not apply to the vehicles it ships overseas. Japanese regulations have more stringent certification measures for its domestic vehicles—measures that are not required for export models. Nissan said that there is ultimately nothing wrong with the recalled vehicles, just that they a have to be certified by a qualified inspector to ensure quality. Around 34,000 Nissan vehicles, most of which haven’t hit the market yet, will be re-inspected at a cost expected to be close to ¥1 billion (P452.65 million).

Up and running in two weeks

All of Nissan’s six factories plus its Nissan Shatai affiliate should be back to their normal operations within two weeks, but some factories may resume faster than others. Asked about what Carlos Ghosn, chairman of Nissan and the Renault-Nissan Alliance, had to say about the snafu, Saikawa refused to elaborate, but said that he had the chairman’s full trust to handle the situation.