Nissan's profit down after inspection scandal

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Nissan Motor Co. may have given inaccurate information to the transport ministry in an inspection in September, bringing to light the automaker's use of uncertified staff to carry out final safety checks on cars, informed sources said Tuesday.

Keiichi Ishii, Minister of Land, Infrastructure, Transport and Tourism told a press conference on Tuesday that the automaker's dealings with the ministry's inspection in September had been inappropriate which could add to Nissan's woes surrounding the scandal.

Ishii said he "will respond harshly if specific facts are confirmed " in reference to the possibility of a criminal complaint be filed against Nissan following a slew of misconduct.

Nissan, the second largest auto firm in Japan, reported its smallest quarterly profit in three years and cut its annual outlook on Wednesday, earnings hindered by quality inspection procedures which have caused trouble at home, as well as hurdles abroad, such as coping with rising expenses in a competitive North American market.

"We expect to feel the impact of the improper final inspection issue in the second half,” Hiroto Saikawa, CEO of the maker of the Leaf electric car and Rogue SUV crossover, told reporters at an earnings briefing on Wednesday.

The company slashed its annual net profit forecast by 44 percent to 5.4 billion yen, to account for a special loss of 4.5 billion yen to pay for re-inspections for the recalled cars.

Reuters Photo

Having halted shipments and production at all six of its assembly plants in October after it was revealed that uncertified inspections were still occurring even after the scandal first came to light in September, production and shipment resumed at five of Nissan's plants in Japan on Tuesday.

The transport ministry has been conducting inspections at Nissan's plants as it steps up measures to ensure the embattled automaker's practice of using uncertified staff to carry out safety checks is curbed and preventative measures put in place.

The Japanese minister also blasted the firm for routinely using unqualified staff for final vehicle inspections which has undermined ministry-standard procedures for certified technicians.

The final inspections conducted on vehicles by unqualified personnel at Nissan led to the automaker issuing a domestic recall of some 1.2 million cars sold in Japan over the past three years and a suspension to production of domestic automobiles.

According to an internal investigation at Nissan, it was revealed that improper final inspections on vehicles had become an inherent practice at the Yokohama-based automaker and dated back as far as 20 years.

Nissan's ongoing scandal, along with those related to Kobe Steel and another Japanese automaker, Subaru Corp., have severely diminished domestic and international confidence in Japan's once stellar manufacturing industry.

Subaru Corp. on Monday slashed its full-year group earnings forecast for the current business year owing to costs associated with its lengthy practice of uncertified vehicle inspections. The automaker is gearing up to issue a recall this month on around 255,000 vehicles after it was revealed in late October that final vehicle inspections had also been carried out by uncertified staff.

Source(s): Reuters ,Xinhua News Agency