Subaru Plans to Reform After Faking Fuel Data

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Automotive News

May 11, 2018

By Hans Greimel

Subaru says it needs to reform its corporate culture “from the ground up” after admitting it faked fuel economy and emissions data on vehicles in Japan for at least five years.

Subaru Corp. said in an April 27 statement that the data tampering continued until as recently as November.

Subaru said inspectors at its Gunma and Yajima plants in Japan, where it assembles nameplates such as the Impreza, Outback and Forester, altered fuel economy and emissions data on 903 vehicles. The faulty inspections did not affect export vehicles.

The manipulation began in December 2012 but may have started as early as 2002, Subaru said. A lack of records that far back made it impossible to confirm.

“Subaru needs to reform its corporate culture from the ground up,” the Japanese carmaker said. “Subaru’s management and employees will work collectively to restore lost trust.”

Subaru’s disclosure is the latest in a string of data manipulation cases that has rattled Japan’s auto industry and dinged its image. Subaru’s sales in the home market dropped 15% to 46,867 vehicles in the first three months of the year as the company grappled with fallout from the inspection scandal, the first signs of which came to light at the end of last year.

Subaru said it has since recalculated data on cars for which it had been manipulated.

The new data still fell within the accepted range of deviation and no recalls are required, the company said.

Subaru traced the problems to such issues as a lack of employee awareness of the importance of final inspection work and inadequate internal communication.

Going forward, Subaru said it will reform “outdated aspects of its corporate culture” such as an authoritarian, top-down management style, a reliance on precedents and formalism.

Subaru said it wants to become “a genuine ‘upright company,’ each employee thinking ‘What is the right thing?’ and implementing in the right way.”

Faulty inspections also tripped up Nissan Motor Co. last year, when it disclosed that uncertified workers had been approving inspections at its plants in Japan. Nissan was forced to recall 1.2 million vehicles to be rechecked, or virtually every car made for sale in Japan over the prior three years.

The year before, Mitsubishi Motors Corp. slumped into crisis after it admitted overstating fuel economy ratings on cars sold in Japan.

In that scandal’s wake, Mitsubishi’s president resigned, earnings plunged and Nissan stepped in to take a controlling stake in the carmaker.

Also in 2016, Japanese regulators rapped Suzuki Motor Corp. for faulty fuel economy testing.

Suzuki admitted combining individual component tests to estimate a fuel economy figure rather than conducting a coasting test of the whole vehicle.

Subaru’s data-fudging admission is an outgrowth of an earlier problem that surfaced last year.

In that case, Subaru said uncertified workers had for decades carried out tests of new cars for the domestic market. While investigating that case, the fuel economy issues cropped up.

The earlier inspection trouble led Subaru to recall 417,288 vehicles in Japan, including the Toyota 86 sporty coupe, which is manufactured by Subaru.

In March, Subaru named North America boss Tomomi Nakamura its new global president to succeed Yasuyuki Yoshinaga, who has headed the company since June 2011. Yoshinaga, president and CEO, will keep the CEO title while stepping up as chairman in June, pending shareholders’ approval.

Among Nakamura’s tasks will be winning back trust in Japan, where sales fell 9.2% in March for a fifth straight month of declines.

Subaru said in March that it would create an internal department charged with cultivating the culture of a “company doing the right thing in the right way.” The department will promote companywide efforts to improve customer trust, Subaru said.

It also said it will establish an independent compliance office to strengthen the company’s efforts to follow laws and regulations.

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