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Nissan further damages reputation with new inspection scandal

Restoring image again may not be so easy

 Data tampering went unnoticed at the automaker despite vows to reform after a scandal last year.   © Reuters

TOKYO --- Nissan Motor is facing its second inspection scandal since the fall after it said Monday that emissions data had been tampered with for several years, delivering another blow to the automaker's brand even as it tries to shake off the first.

Across five Japanese plants, the company rigged fuel economy data for 913 cars and validated final inspections for 690 vehicles that did not conform to the prescribed testing environment. A total of 1,171 cars, the majority of which are sold domestically, were improperly tested.

Nissan, however, says there is no need for a recall since the cars meet government emissions and safety standards. The automaker also claims that catalog specifications for fuel economy are correct. Falsified data was removed and all data reverified, according to the company.

The concern, however, is that the misconduct continued until June despite increased scrutiny from another inspection scandal last September. Though CEO Hiroto Saikawa said at a press conference in October that the automaker would work to reform employees' approach and put preventative measures in place, the improprieties continued.

"We had focused our improvement efforts on the issue of unqualified workers making inspections," Yasuhiro Yamauchi, chief competitive officer, told a news briefing Monday. "We identified the problem because of similar incidents at another company," he said, explaining that a similar issue at fellow Japanese carmaker Subaru led to the discovery.

Although Nissan said it was not attempting to hide anything, it was revealed during last year's scandal that the improper inspections continued at another factory even after Saikawa's October press conference. Corporate leaders and plant supervisors have been denounced for their ignorance of these issues.

The automaker will also be unable to escape criticism that the problems are widespread within the company, given that the cheating occurred at all but one of its six domestic assembly plants. Japan's transport ministry ordered Nissan to open a new investigation and submit a report in a month. It also asked other automakers to check for similar misconduct.

Although Yamauchi said that the company "will work exhaustively on compliance from Saikawa down," the CEO was not at the Monday briefing. Yamauchi also said the company is considering forcing executives to return some of their pay.

Subaru's Yasuyuki Yoshinaga was replaced as CEO by shareholders in June after a similar data-cheating scandal, which affected roughly the same number of vehicles. Yoshinaga remains chairman without representative rights.

Nissan's domestic sales dropped last fall following the inspection issues but recovered in the January-June period, when the Note minivehicle was the automaker's first best-selling passenger car in Japan since 1970.

The new scandal will likely hurt the progress Nissan has made on repairing its image, however, and some believe the impact will be long lasting.

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