Suzuki Finds Silver Lining in Clouds Around Shizuoka Prefecture

After the Mitsubishi fuel economy scandal triggered a Japan-wide investigation into fuel economy claims, Suzuki is now in a similar situation as its diamond-starred competitor.

But the reasoning behind Suzuki’s misdeed is different: the automaker, it claims, was destitute.

According to Automotive News, Suzuki blames its own fuel consumption rating scandal on a lack of funds. It couldn’t afford to perform the regulated tests after the 2008 global financial crisis, the automaker claims.

Before we delve into the latest claim, let’s hit the rewind button and get caught up.

On May 18, Suzuki admitted it made mistakes in how it calculated fuel economy for its entire lineup of cars. The basics: Japanese regulations require that vehicles be road tested to calculate air resistance figures, but Suzuki calculated those numbers during wind tunnel tests. The automaker admitted to using that method since 2010.

Initially, Suzuki stated its engineers performed these tests indoors because its test facility is located near the ocean where it’s fairly windy, and engineers “just wanted to get consistent data,” said a representative for the automaker.

On May 22, The Japan Times reported Suzuki submitted to government officials weather data from its test facility to support its claims, and denied trying to boost fuel efficiency figures. The Japanese government ordered Suzuki to submit a full report by May 31.

Which brings us to today. Suzuki claims a total of 26 separate vehicle models are affected — 14 sold by Suzuki and 12 by other brands — representing a total of 2.14 million vehicles produced. It then explained the reasons why measurements were taken by improper means:

In order to correspond to fuel efficiency regulations strengthening worldwide, Suzuki had been developing a method to measure the resistance of each component and resistance factors. By 2010, Suzuki was able to predict driving resistance data of the coasting test to a certain degree of accuracy through accumulating the measurement of individual components and resistance factors.

Meanwhile, after the global financial crisis of 2008 caused by the bankruptcy of the Lehman Brothers, the increased workload of developing new models and engines led Suzuki to be unable to allocate sufficient manpower for the coasting test, and in addition, failed to invest in necessary infrastructure for the coasting test as well as to make efforts to improve testing technology.

Due to the above circumstances, Suzuki failed to measure driving resistance through the coasting test with the type approval vehicle as was regulated by the MLIT, and was using driving resistance data accumulated from actual measurement of individual components and resistance factors at the time of type approval application.

On March 31, 2009, Suzuki Motor Corp. reported ¥480.4 billion, or $4.65 billion US dollars as of that date, in cash and cash equivalent assets. That’s not exactly poor, but still a low enough level that Osamu Suzuki was likely counting his R&D pennies.

Thankfully, there’s a silver lining in the clouds around Suzuki’s Shizuoka Prefecture testing facility. When retested, the vehicles achieved better fuel consumption than originally rated and marketed.

However, some major pieces remain unclear.

Why is it that Suzuki continued this practice after an influx of cash from Volkswagen in 2010? Even after buying back its stock from the Germans, Suzuki has more on-hand cash than it did in 2009. Japanese investigators will likely probe lightly for answers.

Suzuki is expected to come out of this semi-scandal in one piece, unlike Mitsubishi, which has been partially gobbled up by Nissan. The same fate could have befallen Suzuki had its fuel economy results turned out differently.

Suzuki isn’t coming out of this situation completely unscathed, however. May brought a 16-percent decline in sales for the automaker, and its share price is 34-percent less than it was a year ago.