Toyota unit Hino admits falsifying engine data for nearly 20 years
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Japanese truckmaker Hino Motors, a unit of Toyota Motor, said last week that it had been falsifying data related to engine emissions and fuel performance for a longer period of time and on more models than previously admitted, making it more difficult for the company to rebuild its management and restore credibility.
The company has made public a report by a special investigative committee composed of outside lawyers who found additional instances of fraud.
Hino’s president Satoshi Ogiso apologised on August 2 for failing to see the cheating over the years. “I would like to consider taking strict action regarding our responsibility to management, including myself, and to past management,” he said.
The truckmaker announced in March that four engine types tested since late 2016 — and eight truck and bus models equipped with those engines — had irregularities in their claimed emissions and fuel efficiency.
The report concluded that at least one of the emission-related frauds dated back to October 2003 when new emission regulations took effect. The number of vehicles that will be recalled is likely to increase from the original forecast of 47,000 to 67,000.
During the news conference, Ogiso read comments given to him by Toyota’s president Akio Toyoda: “The misconduct committed by Hino is a betrayal of the trust of all stakeholders, including customers, and is extremely regrettable. We have just received the report of the committee and will first take a careful look at its contents.”
The report said Hino had fixed data to meet emission regulations that were actually exceeded and falsified fuel performance reports. It also said that the fraud was caused by “an environment and structure in which management was not attentive to the front line and gave priority to schedules and numerical targets rather than appropriate processes”.
Kazuo Sakakibara, the head of the investigating committee, said the falsifications had been carried out by employees in the department responsible for developing powertrains and that “there was not sufficient evidence to support a finding of direct involvement by management”.
This article is from Nikkei Asia, a global publication with a uniquely Asian perspective on politics, the economy, business and international affairs. Our own correspondents and outside commentators from around the world share their views on Asia, while our Asia300 section provides in-depth coverage of 300 of the biggest and fastest-growing listed companies from 11 economies outside Japan.
Sakakibara also said that Hino became a subsidiary of Toyota Motor in 2001 and that the president brought in from Toyota did not have direct involvement in the matter.
Ogiso said the company expanded its business around 2000 but legal compliance, regulatory observance and human resource development did not keep up.
“The environment became one in which numerical targets for product development took precedence over legal compliance,” he said. “The vertically divided organisation was not well organised and could not keep up with the times.”
The fraud resulted in a net loss of ¥84.7bn ($628mn) in the fiscal year that ended last March — the largest deficit in the company’s history. Hino has not announced its earnings forecast for this fiscal year because of the unpredictable timing of shipment resumption for affected models.
A version of this article was first published by Nikkei Asia on August 2. ©2022 Nikkei Inc. All rights reserved.