Spotlight: wave of industrial scandals threatens Made in Japan reputation

A number of top Japanese manufacturers have been mired in recent quality scandals, damaging the "Made in Japan" reputation once revered and reflecting a lack of national oversight.

Subaru Corp. is the last manufacturer to come under fire. The company said on Monday that it will have to recall about 255,000 vehicles next week after it was revealed that the final vehicle checks were carried out by uncertified personnel.

The Subaru scandal comes after revelations that Nissan Motor Co., the second largest automaker in Japan, was involved in the practice. Incorrect checks have led the automaker to issue an internal recall of over 1 million vehicles sold in Japan.

The smoke from the scandal extends far beyond the auto industry. Kobe Steel Ltd., a longtime bastion of Japan's manufacturing sector, recently acknowledged falsification of inspection data on a range of its products, including aluminum, copper, steel powder and specialty steel products.

More than 500 companies, ranging from automakers and aircraft manufacturers to defense equipment and Shinkansen machine gun manufacturers, have been affected by the metallurgical plant misconduct, including overseas companies such as General Motors Co., Ford Motor Co., Airbus, and Boeing Co.

The damages in Japan's manufacturing industry have already shown real numbers. Car sales in the country fell 1.7 percent last month from the previous year, driven by the controversial Nissan scandal, Kyodo reported on Wednesday.

In late September, Nissan posted a 43 percent drop in overall vehicle sales following revelations of improper inspection.

The Financial Times article says Japan needs to recognize these incidents as symptoms of a "sealed" industrial system that is "reaching its limits." Japanese public broadcaster NHK also published an article this week titled "The 'Made in Japan' Crisis.

Such incidents cast doubt on corporate governance in Japan's manufacturing industry and severely damage the country's once mature reputation as a quality manufacturer, industry experts say.

Nissan CEO Hiroto Saikawa said the automaker's training system for certifying vehicle inspection personnel has not changed for 20 years, with sources close to the matter saying that, in violation of government requirements, final inspections were routinely carried out by uncertified technicians for two decades.

“This tends to be the case both in terms of corporate culture and flow.