Nissan Falsifies Exhaust Emission Data in New Issue for Saikawa

(Bloomberg) -- Nissan Motor Co. said it will investigate instances of misconduct involving falsified data about exhaust emissions and fuel economy, the second controversy in less than a year for the automaker whose vehicle-inspection scandal had led to the recall of about 1.2 million vehicles.

The data falsification, which occurred on 19 models across five plants in Japan, was found out when the company was carrying out an internal check about employees conducting final inspection of vehicles, Nissan said at its Yokohama headquarters Monday. The incident won't lead to any recalls as the vehicles meet catalog specifications for fuel economy and emissions.

It's the latest issue for Chief Executive Officer Hiroto Saikawa, 64, after he and other executives took a pay cut last year with the inspection crisis leading to a vehicle recall in Japan and a reduction in its profit forecast. Nissan shares rebounded in Tokyo Tuesday as investors deemed the incident -- based on what has been disclosed -- may not be as threatening as the emission scandal that engulfed Volkswagen AG.

“It's a domestic matter and foreign investors are not too concerned,” said Seiji Sugiura, an analyst at Tokai Tokyo Research Center. “But Nissan will suffer from reputation damage at home.”

Nissan shares gained 3 percent as of 11:12 a.m. in Tokyo following a 4.6 percent drop Monday after the company invited reporters to a briefing on misconduct in emissions tests. The press conference happened after the stock market was closed for trading.

Saikawa, the handpicked successor of Carlos Ghosn, took charge of Nissan in April last year. Within six months, he faced the first big test of his own, the vehicle-inspection scandal.

Testing of emissions has risen to prominence globally after Volkswagen was caught fitting devices on its diesel vehicles that allowed them to recognize when they were being tested in laboratory conditions, and to reduce emissions to meet acceptable levels. German authorities are still scrutinizing the automaker. Daimler AG is also under investigation, and both face lawsuits in Germany and the U.S.

Nissan's announcement is the latest in a string of compliance scandals at carmakers including Mitsubishi Motors Corp. and Subaru Corp. that has dented the reputation of Japan's manufacturing sector.

Last year, Kobe Steel Ltd. said it sold products that failed quality control tests to over 500 companies. Subaru, which admitted to manipulating emission data records to match mileage submitted to the government, was also embroiled in a similar controversy as Nissan's. Yasuyuki Yoshinaga stepped down as Subaru CEO this year.

During the checks, Nissan found out that employees misrepresented temperature and humidity data in the testing chamber and manipulated emission data on carbon monoxide and carbon dioxide. The automaker has hired a law firm to investigate the matter further.

Nissan bailed out Mitsubishi Motors in 2016 after the company was caught falsifying mileage estimates for several of its vehicles. Suzuki Motor Corp. Chairman Osamu Suzuki ceded the role of CEO after the automaker admitted to using unapproved fuel-economy testing methods in 2016.

To contact the reporter on this story: Ma Jie in Tokyo at jma124@bloomberg.net

To contact the editors responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net, Ville Heiskanen

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