Subaru Corp. on Monday revised downward its full-year group earnings forecast for the business year through next March as the carmaker moves to grapple with its decades-old faulty product inspections.
For fiscal 2017, Subaru now expects its group operating profit to stand at ¥380 billion ($3.3 billion), compared with ¥410 billion projected in August, because it estimates the costs of rectifying the inspection issue at ¥10 billion.
Group net profit is estimated at ¥207 billion, down from ¥228.5 billion, on sales of ¥3.38 trillion, down from its earlier estimate of ¥3.42 trillion.
The carmaker is reeling after revealing it had allowed uncertified staff to carry out final tests at two of its plants in Gunma Prefecture for over 30 years.
“I once again apologize for causing so much concern and trouble,” Subaru President Yasuyuki Yoshinaga said at a news conference in Tokyo on Monday. Yoshinaga said the company will report on measures it will take to prevent recurrences to the Land, Infrastructure, Transport and Tourism Ministry in about a month’s time. The ministry last week inspected Subaru’s two factories in Gunma Prefecture.
Subaru said it is preparing to recall some 255,000 cars in Japan later this month. This includes all 12 models sold in the past three years. Japanese laws require vehicles to undergo safety inspections three years after registration. The models also include the “86,” a sports car made by Subaru for Toyota Motor Corp.
In the first half of fiscal 2017, Subaru reported a consolidated net profit of ¥85.01 billion, down 48.1 percent from the same period in the previous year. Group operating profit totaled ¥212.13 billion, up 1.7 percent, while sales rose 6.9 percent to ¥1.69 trillion.
Corporate Japan’s reputation for quality has been hit by a string of recent industrial scandals.
All six of Nissan Motor Co.’s assembly plants in Japan have been inspected by the transport ministry because similar inspection violations were found.
Nissan said last month it will halt car shipments and production at all six of its domestic plants, after having found that invalid inspections continued at most of the factories even after the misconduct surfaced in September.
Kobe Steel Ltd. has admitted to falsifying data on its products and specifications, including aluminum and copper products supplied to 525 companies ranging from major carmakers to bullet train operators.
Last week, the steel maker withdrew its group net profit estimates for the business year through next March, saying it is unable to assess the impact of the deepening data scandal on earnings.
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