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Editorial: Japan's auto industry needs shake-up after latest case of emissions data fraud

Yet more performance data falsification has been uncovered in Japan's auto industry, this time at major truck-maker Hino Motors Ltd.

    Hino, which specializes in commercial trucks, switched out the exhaust filtration unit during emissions tests, essentially faking that its vehicles could stay within government emissions standards even after a long time in service. The company also inflated its trucks' fuel efficiency figures by changing the settings on the test machinery. Through these methods, Hino got the government stamp of approval on engines now in more than 115,000 trucks and buses.

    One apparent major cause of the data falsification was a high-pressure workplace culture that demanded staff meet fuel efficiency and other targets under strict development schedules. There needs to be a third-party investigation to identify where exactly blame for the fraud lies.

    Alas, this is just the latest in a long line of inspection data falsification scandals to hit the Japanese auto industry, following similar cases at Mitsubishi Motors Corp., Nissan Motor Co., and Subaru Corp. The problem needs to be clarified, and the results applied to new prevention measures.

    At Mitsubishi Motors, found falsifying fuel efficiency figures in 2016, the department in charge of engine performance testing was tasked with meeting Japan's fuel economy standards. However, the department did not have enough staff to take on this extra mission, and as a result failed to create a system to objectively evaluate fuel economy. In the end, the staff just dressed up the performance figures.

    When the Mitsubishi data-fixing scandal came to light, the transport ministry ordered all of Japan's automakers to check for similar malfeasance. Hino told the ministry it had found "no problems." The data falsification at Hino seems to have begun after the Mitsubishi case, and the nature of the fraud is extremely similar. It appears Hino's senior management learned nothing from the scandal at its fellow auto giant, and for that it bears a heavy responsibility.

    The first duty of anyone managing testing, quality control and the like is impartiality. Even if fulfilling this duty means lower profits in the short term, data must be communicated honesty and directly to superiors and executives. This is the core of the role.

    If a company fails to give this all-important function its due, it cannot complain if it is then seen as paying too little attention to safety and the environment. The entire Japanese auto industry must reconfirm that it is maintaining and passing on organizational commitment to laws, regulations and internal company rules.

    It is also essential to strengthen the system for gathering employees' thoughts on what they consider problematic.

    Revisions to Japan's law encouraging whistleblowers will go into effect in June this year, including changes that will compel firms over a certain size to create a system for internal reporting of wrongdoing. Employees staffing this department would also be bound to secrecy to protect sources. An effective system is called for.

    We have entered an era when competitive advantage will be determined by companies' ability to raise fuel economy and electrify their product lines, as environmental regulations on the car industry get ever stricter. If firms attempt to hide their own technological failings under fraudulent data, they will lose consumers' confidence.

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