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Suzuki takes $700m loss on sweeping recall in Japan

Automaker to recheck 2m cars after improper inspections

Suzuki's Sagara plant, southwest of Tokyo. The automaker's latest recall covers cars built in Japan over the past three years. (Photo by Yasuhiro Kenmochi)

TOKYO -- Suzuki Motor said on Friday it will book a roughly 80 billion yen ($714 million) loss stemming from the recall of about 2 million cars in Japan -- a full three years of sales in the country.

The announcement followed an additional investigation by the automaker into missteps, including data tampering, in final inspections of new cars built in Japan. Suzuki said it found cases in which improper testing was suspected.

The loss will be booked for the year ended March 31. As of February, Suzuki had forecast a net profit of 220 billion yen, up 2% on the year.

President Toshihiro Suzuki, part of the automaker's founding family, apologized at a news conference and said that executives would take a pay cut. On management's accountability, he said that rectifying the situation was his responsibility.

The Japanese automaker -- which earns more than half its revenue overseas, particularly in India -- also said it would invest 170 billion yen over the next five years in quality and safety improvements. Production speeds are being reduced 2-5% to ensure proper inspections, Toshihiro Suzuki said. With overtime and work on weekends, the company hopes to make sure that customers are not affected, he said.

Suzuki reported last August to Japan's transport ministry that improper steps had been taken in vehicle inspections. An additional investigation of records from three domestic factories going back to April 2008 newly revealed data tampering and other missteps for about 2,500 cars.

The recall spans Suzuki cars sold in Japan since April 2016 that have not undergone their first government-mandated post-sale inspection. The 25 models covered by the recall include cars built for other automakers, such as Mazda Motor.

Suzuki is not the only automaker that has revealed improper inspections in Japan. Nissan Motor and Subaru have conducted recalls following similar cases.

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