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Scandals widen at Japanese car makers

Wednesday, May 11, 2016 - 01:37

Japan's Takata has posted its third annual loss in the past four years, hit by costs for recalls of its potentially deadly airbag inflators. As Joel Flynn reports, there was also more bad news for Japan's Mitsubishi, which is dealing with an emissions scandal.

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A short bow in front of the cameras to say sorry. But the traditional symbol of contrition has become all too familiar in Japan - for those in the auto sector anyway Mitsubishi's latest disclosure suggests more cars may be involved in its emissions cheating scandal. SOUNDBITE: Mitsubishi Motors Corp COO, Tetsuro Aikawa, saying (Japanese): "Results have shown suspicions of nine other models currently on the market, as well as those off it, of having improper calculations on driving resistance, including the RVR model." It could be even bigger than that. Japan's Asahi newspaper suggesting that Mitsubishi has used improper mileage tests on almost all its vehicles sold in Japan since 1991. It's not just Japanese engines that are choking. Another seven million of Takata's faulty airbags need to be recalled, according to the Nikkei. That will take the global recall total to 120 million vehicles. SOUNDBITE: Takata Chief Financial Officer, Yoichiro Nomura, saying (Japanese): "We expect extraordinary losses due to recall related costs, in particular legal, investigative and production kit costs to collectively top 14 billion yen." Takata are now saying losses could force a restructuring. But that may be a positive turning point. SOUNDBITE: CIBC Head of FX Strategy, Jeremy Stretch, saying (English): "If there are any signs of any degree of improvement over the medium run that could provide some opportunities for investors to look to buy cheaper assets and look for a return." Many of Japan's big firms are also facing headwinds from a strengthening yen as the economy weakens. Balance sheets could be in for an even bumpier ride.

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Scandals widen at Japanese car makers

Wednesday, May 11, 2016 - 01:37