On Monday, after discovering final vehicle inspections were not performed by authorised technicians, Nissan Motor Co Ltd announced that is set to recall all 1.2 million new passenger cars that it sold in Japan during the past three years.
After Mitsubishi Motors Corp disclosed in April 2016 it had falsified the fuel economy for some of its domestic market models; the Nissan recall is the second major incident of misconduct involving a Japanese automaker in as many years.
Nissan, the second-biggest carmaker of Japan, announced that the company is set to recall 1.21 million passenger vehicles that were produced for the domestic market between October 2014 and September 2017, including top sellers the Note compact hatchback and the Serena minivan.
It continued that all recalled vehicles would undergo re-inspections for final checks on issues including braking and acceleration capabilities and steering radius that will cost the company around 25 billion yen (166.60 million pounds).
“We must take the registration framework and procedures seriously, regardless of how busy we may be or how short-staffed we may be,” said CEO Hiroto Saikawa to reporters during a media conference.
“We apologise for the inconvenience caused to our customers.”
Saikawa added the company was investigating on how and why the inspections took place, a process that is estimated to take around a month. He said that a third party would participate in an internal investigation regarding the issue.
The said recall includes all of the 386,000 passenger vehicles that Nissan sold in Japan last year. However, it excludes Nissan-branded mini-vehicles, which are manufactured by Mitsubishi Motors.
Passenger car sales in Japan account for roughly 10% of the global sales of Nissan.
The announcement widens the scope of a problem reported last week when Nissan initially stated that it would suspend the registration of 60,000 vehicles over unauthorised inspections.
“This could turn out to be a serious issue depending on whether the misconduct was intentional or a simple oversight,” stated the managing director of consultancy Carnorama, Takeshi Miyao.
“At the very least it could have a big impact on Nissan’s brand image, given that it prides itself for selling quality products.”
Around 560,000 vehicles that were produced in Japan in 2016 was exported by Nissan to Europe, North America, and other markets. Spokesperson Nick Maxfield said that there was no difference regarding quality between cars that were made in Japan for the domestic market and those that were made for export.
The shares of Nissan slumped as much as 5.3% to hit the company’s lowest since April before closing down 2.7%. The benchmark Nikkei average stock price index concluded at 0.2%.
Automakers must register all such vehicles with the government of Japan before a sale, with owners set to renew the registrations of passenger vehicles every three years.
On Friday, the Ministry of Land, Infrastructure and Transport said that it had asked Nissan to report measures to prevent a recurrence of the issue by the end of October.