Wed, Oct 04, 2017 - Page 10 News List

Nissan recalls 1.2 million cars over inspection lapse

Bloomberg

Nissan Motor Co is to recall about 1.2 million vehicles sold in Japan after regulators discovered unauthorized inspectors approved vehicle quality, potentially costing the company ¥25 billion (US$222 million).

The vehicles, from as many as 24 models made and sold between October 2014 and last month, will be called back for inspection, Nissan chief executive officer Hiroto Saikawa said.

The cars have no quality issues and will not need to have any parts replaced, the company said.

Nissan vehicles exported from Japan are not involved in the recall.

Nissan shares rose as much as 1.7 percent yesterday as the company said the models involved, produced in six Japanese factories, are safe to drive and will be called back purely for re-inspection by authorized personnel.

The stock on Monday had tumbled after the automaker disclosed it had temporarily suspended vehicle registration in Japan due to the non-compliance.

While the issue is bad for the carmaker’s corporate image and leads to concern that sales could be affected, it does not mean Nissan cars are lacking in quality, SMBC Nikko Securities Inc credit analyst Takeyuki Atake wrote in a report yesterday.

The recall costs are also small compared with Nissan’s net income forecast of ¥535 billion for the current fiscal year, Atake wrote.

Saikawa said he would personally investigate the issue and find out the cause before deciding who should bear responsibility for the “shocking” lapse.

There is also be an external probe, he said on Monday at the company’s headquarters in Yokohama.

About 34,000 units that have yet to be registered will also be re-inspected.

Nissan said final inspections were carried out by technicians not properly authorized to carry out those duties under the company’s processes approved by the Japanese Ministry of Land, Infrastructure and Transport. The inspection process has been fixed and registrations for new vehicles have resumed, it said.

“It’s very regrettable” the lapse occurred, Japanese Minister of Economy, Trade and Industry Hiroshige Seko told reporters yesterday. “I’d like Nissan to do everything possible to prevent user concern and confusion from spreading.”

Automakers worldwide are under increased scrutiny over quality and compliance with regulations as vehicles become more complex and the industry moves toward autonomous driving, electrification and connectivity.

The automaker may face penalties for utilizing non-certified personnel during inspections, Japanese Ministry of Land, Infrastructure, Transport and Tourism official Kenichi Hayashi said.

The lapse was discovered by the ministry during a review at the company’s Shatai plant, Saikawa said.

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