Nissan apologizes after acknowledging it falsified data

Nissan, echoing another Japanese company’s mea culpa moment, apologized Monday after uncovering—as part of a check of emissions and fuel economy tests within its final production process (known as kanken)—it had falsified data at all but one of its Japanese vehicle production plants.

The firm did not disclose in total how many cars were involved, but said emissions and fuel economy tests had “deviated from the prescribed testing environment.”

The findings, which were reported to the Japanese Ministry of Land, Infrastructure, Transport and Tourism (MLIT), follow the announcement last  September of concerns over Nissan’s compliance with national safety standards and inspections. 

This latest example of non-compliance with environmental and health and safety laws mirrors compliance failure or evasion characteristics of previous Japanese scandals at Kobe Steel and previous car manufacturing scandals at Volkswagen.

Nissan: Six measures to prevent recurrence

1. Ensure awareness of conformity with laws and regulations concerning final inspection, and conduct comprehensive internal education and training.
Make sure employees in Japan understand that final vehicle inspection is a significant task entrusted by the Japanese government, and promote this awareness through posters, designated areas, uniforms, etc.;
Continuously raise and ensure employee awareness of conformity with laws and regulations concerning final vehicle inspection of vehicles for the Japan market.
2. Reconfigure the final vehicle inspection process to that originally submitted to MLIT.
3. Isolate the final vehicle inspection process, and assign only internally registered final vehicle inspectors to the process.
Isolate the final vehicle inspection process by converging all inspection check items into the tester line, enclose the area, and allow only internally registered final vehicle inspectors to enter.
In cases where non-final inspection process items are mixed with final inspection processes, internally registered final vehicle inspectors must conduct the checks.
4. Enhance checks of the final inspection process for vehicles produced for the Japan market.
Check twice per shift that the process is being carried out correctly. Ensure that:
·     Only internally registered final inspectors conduct final inspections.
·     The process is the same as that submitted to MLIT.
·     The inspections are conducted according to the standard operation manual.
5. Enhance the administration of final vehicle inspection process changes.
If any modification is made to the final vehicle inspection process for vehicles for the Japan market, the modification must be submitted to MLIT after approval is received from the plant manager.
6. Enhance auditing of the final vehicle inspection process for vehicles for the Japan market.
For the time being, carry out external audits on the implementation of items 1 through 4 once a week.
-- Source: Nissan

This is also just the latest in a long string of compliance problems uncovered at Nissan. The first set came when the company announced last September it had notified its dealers in Japan that it would temporarily suspend new registrations for vehicles on dealer lots or in factory inventory because of inspection problems identified by the MLIT at five Japanese manufacturing plants. Apparently, inspection checks had not been carried out by technicians qualified to do so. At that time an internal investigation was also announced.

In October, after taking corrective measures to ensure compliance with MLIT regulations, the company again found that final vehicle inspection checks were carried out by technicians not qualified to perform those duties under Nissan’s own processes, as reported to MLIT, even after taking “corrective measures at Japanese production plants by September 20” to address the issue. This continued non-compliance was uncovered by a third-party investigation team on 18 October at three of its plants. At that point, production at those plants was suspended.

The company took the following additional corrective measures: 

The final vehicle inspection line was configured as originally submitted to MLIT, consolidating all final inspection processes.

The final inspection process was separated from other processes and only internally registered final vehicle inspectors were granted access to the final inspection line.

Nissan also considered either re-inspecting the unregistered vehicles at dealerships or submitting a non-compliance recall report for registered vehicles. This covered around 34,000 vehicles produced between 20 September and 18 October, including some vehicles produced for other manufacturers.

The non-compliance with Japanese government safety standards was due, Nissan admitted, to employees not understanding laws and regulations, process planning that mixed final inspections with other types of inspection, and lax audit methodology. The corrective actions recommended are included in the sidebar area on this article.

The latest press release, on Monday, excluded only the Nissan Kyushu plant from having altered measurement values. Nick Maxfield of Nissan’s Japan communications department said in an e-mail response: “This is, in part, because the plant’s inspection team included a supervisor with extensive experience in exhaust emissions testing.” 

On the other hand, the release states that reliable data, i.e. data that has not been “altered,” was rechecked and all cars fell within Japanese regulations and recommendations for emissions and fuel economy, except for Nissan’s high-performance sports car, the GT-R. The press release does not state why the GT-R was not exonerated, but Maxfield explained that the GT-R has a low annual production volume, and therefore there wasn't enough data to draw reliable conclusions. 

“It’s most likely that they were met,” he continued, “but we simply need to test more vehicles before confirming this. As of now, a high percentage of GT-Rs produced are going through these testing procedures in order to ensure that we have enough data.”

Maxfield added that there were three emissions standards: the Japanese government’s safety standards, Nissan's “catalog” figures (the official vehicle emissions figures it uses in its catalogs and publicity material), and Nissan’s in-house standards. The in-house standards are the most stringent. 

“In the cases where data rewriting took place, the test results fell in between our own in-house standards and the catalog figures,” said Maxfield. “So, in all cases, the safety standards and catalog figures were met or exceeded, but in some cases the in-house standards were not met.” 

Maxfield explained that in cases in which in-house standards are not met, re-testing is typically required but that “results were rewritten in order to skip re-testing.”

Further countermeasures may be announced following the conclusion of an investigation by leading Japanese law firm Nishimura and Asahi. 

Nissan also issued a statement asserting its belief in compliance: “Strict adherence to compliance is a top priority for Nissan’s management, and if issues are discovered, appropriate measures will be taken. Nissan is committed to promoting and enforcing compliance and awareness thereof in all operational areas.”

While Volkswagen was clearly caught cheating emissions testing by writing software to produce falsified results, Nissan’s efforts seem to be rather bumbling in comparison, especially as repeated attempts to correct the inspections seem to have failed. Its compliance failures are closer to those at Kobe Steel, wherein quality testing was improperly recorded and, despite the company’s “compliance excellence” statements, compliance was a sham. 

Ironically, the same month that the MLIT initiated its investigation, Nissan’s brand jumped to 39th from 43rd in Interbrand’s Best Global Brands Survey. The importance of effective compliance will again be demonstrated, it is likely, by the brand slipping in this year’s survey as a result of the revelations.