Economy

Nissan shares fall on deepening inspection scandal

Nissan shares fall on deepening inspection scandal

The decision comes after Japan's ministry of land, infrastructure and transportation (MLIT) found that Nissan failed to streamline the final inspection process at its plants, which were being carried out by technicians not properly registered to perform those duties for vehicles for the Japanese market.

They've recalled 1.16 million cars, made and sold in Japan, between January 2014 and September this year, for inspection. Under Japanese rules, vehicles are required to pass a final certification before they leave the factory, to ensure they conform to specifications registered with regulators for each model. The company said it may take at least two weeks to implement new corrective measures, such as installing security gates so that only authorized inspectors can enter areas designated for final inspections, and bring the factories back to full operation.

Checks by uncertified technicians continued even after Nissan had said it had strengthened its inspection processes, when the issue first came to light late last month.

Uncertified inspectors are believed to have checked some 34,000 vehicles from September 20 through October 18, Nissan said. It is also considering submitting a noncompliance recall report for registered vehicles. "But we were not careful enough about properly following regulations", Saikawa said, adding that he believes that safety was not compromised for finished cars. The country's third-largest steel maker has admitted to falsifying data on many of its products - including aluminum and copper - for at least a decade.

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Nissan shares fell after the Japanese carmaker said it was to suspend all domestic production until it had got to the bottom of a worsening inspection scandal.

The compliance debacle is another blow for the image of the automaker. When the inspection concluded on Wednesday, it became apparent that three Nissan plants were still out of compliance, prompting a complete stoppage of vehicle production. "The investigation team will continue to thoroughly investigate the issue and determine measures to prevent recurrence".

Nissan said it regards the issue as critical because of the recurrence despite corrective measures taken.