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Subaru Recalls 395,000 vehicles in Japan

Following similar misconduct at Nissan, Subaru admitted that for over 30 years, final inspections of new vehicles at its main Gunma complex north of Tokyo were sometimes completed by inspectors who were not certified to do so, thereby violating government mandated requirements. With the admission, Subaru said it was recalling 395,000 domestic vehicles, which could cost the company around ¥20 billion (roughly P9 billion).

Bigger problems loom

In a statement, the Japanese car brand said its stockholders are yet to decide when it will schedule the recall, so as of the moment, it will not make any revisions for the financial forecasts for the fiscal year ending in March.

After forecasting a full-year operating profit of ¥410 billion a year ago, Subaru reduced its forecast to ¥380 billion when it announced quarterly profit results recently. The decline was the result of weak sales in the United States, the carmaker’s biggest market.

Japanese quality takes a blow

The Japanese car making industry, which has made a solid reputation for practicality and durability over the years, has taken a blow in recent months due to the successive announcements from Nissan and Subaru regarding the improper final inspection procedures at its local plants.

The country’s quality control reputation further suffered a blow after a massive data-fabrication scandal at Kobe Steel, the country’s third largest steel manufacturer.

Regarding Nissan

In late October, Nissan was forced to suspend domestic vehicle production for two weeks after 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, but that was before Nissan’s suspension announcement.

Nissan resumed soft operations some time in the first week of November.

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