Dec 20, 2017 (Nikkei) - Subaru's Japanese auto orders are on track to fall 30% on the year in December after uncertified workers were found in October to be conducting final vehicle inspections.
Orders tumbled more than 10% on the year in November, and are now "around 70%" of where they were a year ago, President Yasuyuki Yoshinaga told a news conference Tuesday. The automaker has filed a report with the transport ministry as part of an investigation into the scandal and released measures to prevent a recurrence. Costs including a recall of affected vehicles are expected to crimp profit by 20 billion yen ($177 million) starting in the current fiscal year ending in March. The company has refrained from discussing exactly how declining sales will impact earnings. Allowing workers to conduct final inspections on finished vehicles before receiving formal certification to do so was apparently common practice at Subaru's only Japanese plant, in Gunma Prefecture. The automaker swiftly rectified the situation after the scandal broke in October, retraining workers for two days in November. While this halted production lines temporarily, there was no major disruption to output. But the company's reputation has sustained heavier damage. Before the scandal, sales were going strong, fueled by a full redesign of Subaru's popular Impreza compact in 2016. Yet customers have kept their distance since October. A halt in television advertising has compounded this loss of trust. The recall, moreover, has distracted dealerships from the business of selling vehicles to the customers that do come by.
