(Bloomberg Opinion) -- At the time when Japan’s auto industry is at a critical juncture, it’s taking an off-road the nation doesn’t have time for.
The country’s carmakers have had their reputations dragged through the mud this week, with Toyota Motor Corp. and other firms announcing, following internal investigations sparked by after a similar brouhaha at Daihatsu Motor Co. last year, that they had falsified parts of safety- certification tests.
In a surprise move, transport ministry officials raided their offices, a step usually reserved for more serious wrongdoing. The news reaction was predictable: Many foreign media outlets invoked the phrase “safety scandal,” while others termed it “massive cheating.” The domestic press was, if anything, harsher: “Toyota testing scandal leaves another stain on Japan auto industry,” said one outlet; another termed it “an unusual and shameful day in Japanese auto history.”
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But does this matter really require such self-flagellation? Here are some of the automakers’ findings:
While this isn’t a comprehensive list of the testing lapses, none of it reveals a Dieselgate 2.0. As I have written before, in that scandal executives at German carmaker Volkswagen AG deliberately and intentionally worked around emissions tests, fully aware its cars couldn’t pass.
What we’re seeing here is almost the opposite: factory floor-level workers taking shortcuts during testing, in the knowledge that the vehicles would almost certainly pass inspection anyway, even if the tests aren’t followed to the letter of the law. Observe that there are no recalls in this circumstance. No one is saying the vehicles out there are, in any sense, actually unsafe.
This is borne out by recent history. The Daihatsu incident last year that triggered this current brouhaha generated ample headlines when the kei carmaker pulled its entire fleet of vehicles from sale. But much less reporters’ ink was spilled when the autos concerned were retested in accordance with procedure: They passed with flying colors, without any changes, and are now back on showroom floors(1). Where’s the “safety scandal,” exactly?
Automakers largely have their hands tied in how they can respond. “We think the rules are stupid anyway” won’t exactly play well in the Japanese media. And no one is suggesting that the companies should be above the law.
But at a critical time for automakers worldwide, with China churning out electric vehicles and the industry’s future direction up for grabs, Japan needs a more holistic perspective. The rules might not have been followed to the letter, but this is a good chance to reform a clearly overwrought process: With testing conducted and paid for by the carmakers, rather than the regulator, there’s every incentive for certification to become bloated.
Just as the Daihatsu issue was revealed last year, I was reading Walter Isaacson’s biography of Elon Musk. The contrast between what I read and what I learned about the Toyota unit was astounding: During the critical development of Tesla’s Model 3, the electric vehicle’s make-or-break moment in 2018, Isaacson writes that Musk cut corners everywhere, removing bolts, sensors and waterproofing if he felt they weren’t absolutely vital. For this process of simplification, Musk received near-universal praise and became a multibillionaire(2).
“Move fast and break things” might not the right motto for the life-and-death stakes of safety. But standards can be driven to ridiculous limits. Toyota Chairman Akio Toyoda’s time isn’t best spent on the factory floor personally fixing this issue, as he has pledged. Instead, he should be rallying domestic and international allies into his “multi-pathway” pushing back against the misplaced hype of an electric-vehicle-only future.
Japan’s certification process hasn’t caught up with the times. Fixing that should be a priority, and looking at an overzealous regulator shouldn’t be too far behind: Raiding the headquarters of the automakers en masse after a voluntarily reported investigation is a provocative move that creates an air of suspicion among the public and a broader sense there is something wrong with the industry. It’s a step more typically reserved for flagrant wrongdoing, but there is no evidence of a broader conspiracy, just misguided corner-cutting.
Japan’s long prided itself on its reputation for safety. But it shouldn’t create uncertainty over threats that don’t exist. The low-stakes gains from this investigation aren’t worth the reputational hit to the industry. This scandal is a nothingburger.
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(1) Except for one minivan model that had its classification revoked as the government ministry considered the test manipulation egregious.
(2) Meanwhile, Tesla has just settled to resolve the second lawsuit in two months related to fatal crashes involving its cars.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Gearoid Reidy is a Bloomberg Opinion columnist covering Japan and the Koreas. He previously led the breaking news team in North Asia, and was the Tokyo deputy bureau chief.
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