Another automaker has been caught cutting corners in favor of generating more profits while undermining safety standards. Recently, Suzuki admitted to falsifying fuel efficiency reports, cheating on safety tests and failing to conduct proper final inspections on over 2 million vehicles in its home market of Japan.
Suzuki plans to recall vehicles sold starting April 2016, that had not passed through government mandated check-ups. Twenty-nine vehicle models were identified as part of the recall, these include the Spacia, Wagon R, Alto and Hustler, as well as 12 models that Suzuki supplies to Nissan Motor Co., Mazda Motor Corp., and Mitsubishi Motors Corp. As a result, the recall will cost them a reported 80 billion Yen, which is a large amount of their projected annual income of 220 billion Yen.
This comes after Suzuki conducted internal investigations which found evidence of faulty brake tests, tampering fuel efficiency data, and final check ups being conducted by staff still going through certification training.
Suzuki president Toshihiro Suzuki said there was “inappropriate confirmation of conformity to the Japanese vehicle safety standards”. He was also quoted as saying company executives will take pay cuts as punishment for their transgressions.
Among the cars Suzuki PH sells in the Philippines, the new Jimny is sourced from Japan. It was not included in the list of cars.
The following are the pay cuts that will be taken by the executives. Chairman Osamu Suzuki will not receive any compensation for the next 12 months starting July while president Toshihiro will get a 50% cut for 6 months. In addition, both will also give up their 2018 annual bonuses.
The vice-chairman and other directors will take between 10-40% cuts ranging from a 3-6 month period. Lastly, the director and managing officer in charge of production is expected to resign from their position in the next shareholders meeting this June.
This latest tragedy is another in a long line of recent “recall scandals” wherein car manufacturers have been caught or have admitted to cutting corners in terms of production in an effort to lessen costs while simultaneously increasing production volumes to meet global and local demand.
Besides the revenue ramifications, this also comes as a big blow to the image of Japanese quality and durability, which has become one of their main selling points ever since they started building automobiles. The recall of 2,021,500 vehicles is so far the largest recorded single recall in Japan.