The alarming announcement from Hino in 2020, that it was suspending production of certain models in the US market, has now come into sharper focus with the announcement late last week that there has been misconduct in the company concerning engine emission readings and fuel consumption performance.
Hino launched an investigation into the issue following a discovery in 2018 that revealed its engines would not meet US emission requirements, which was the trigger for pulling many of its trucks from the US market in 2020.
The latest development adds to Hino’s troubles, coming on the back of that announcement in 2020, that it would suspend operations at two North American truck plants over failure in obtaining U.S. certifications for engines.
Then in December last year the company announced that it was recalling about 47,000 of its Profia/700 Series heavy-duty trucks. because exhaust pipes were improperly fitted causing the release of nitrogen oxides above regulatory limits.
However despite those episodes being similar in nature Hino claims that neither is linked to the data manipulation that it has now uncovered and admitted to.
The company said that it has uncovered years of falsified engine data, which it believed affected as many as about 115,000 vehicles — double it’s annual sales in Japan alone.
Hino said it has halted shipments of its medium- to heavy-duty trucks and buses with three types of engines linked to the data manipulation.
The revelation is the latest to call into question data on emissions and fuel economy in the automotive industry, which has seen Volkswagen, Mitsubishi and other companies owning up to cheating the system.
“There was a failure to handle the pressure to reach numerical targets and to strictly adhere to schedules,” Hino president Satoshi Ogiso told reporters in Japan.
The statement from Hino said it had identified ‘past misconduct in relation to its applications for certification concerning the emissions and the fuel economy performance of its engines for the Japanese market’.
Hino said it has identified misconduct concerning the falsification of engine performance data in its emissions durability testing for the A05C (HC-SCR) medium duty engine, and in the measurement of fuel economy performance in certification tests for two heavy duty engine models, A09C and E13C, also confirming that those engines have problems in engine performance.
In addition, Hino has identified a problem concerning the fuel economy performance of the N04C (Urea-SCR) light duty engine, but that in this case no misconduct has so far been identified as taking place in relation to the certification testing of this engine.
The company said it had reported the issues and its decision to the Japanese Ministry of Land, Infrastructure, Transport and Tourism (MLIT) and Ministry of Economy, Trade and Industry (METI).
The statement said that Hino ‘deeply apologises for any inconvenience caused to its customers and other stakeholders’.
Hino said that after internally identifying potential issues regarding certification testing to determine the emissions performance of on-road engines for the North American market, Hino voluntarily commenced an investigation led by outside counsel and provided an initial report of its findings to the relevant regulators.
Subsequently, the U.S. Department of Justice commenced an investigation. Hino is fully cooperating with investigations by the relevant authorities.
Hino then expanded the scope of the investigation to include a review of emissions certification procedures for engines certified to Japanese regulatory standards. In conjunction with that investigation, Hino has also conducted verification testing of engine performance including emissions and fuel economy.
The deceptive misconduct relates to the certification procedures for multiple engine models subject to the Japanese 2016 emissions regulations, the so-called ‘post- post- new long-term regulations’ and fuel economy standards in Japan and found problems in engine performance.
Apparently in a durability test Hino discovered that for emissions performance, the second muffler* of the emissions after-treatment system was replaced for the test and the test was continued using the replaced muffler. This change was made after learning that emissions performance would deteriorate over time and that the engine may not meet the regulatory emissions standards.
In addition, Hino has also confirmed through emission durability retesting that there is a possibility that the engine may exceed regulatory emissions standards over the course of the vehicle’s full useful life.
*The second muffler is an emissions after-treatment system component by which NOx emitted from the engine is made to react with hydrocarbons to purify it into nitrogen and water.
As a result Hino is suspending sales of its Hino Ranger models equipped with this engine, which in Australia is known as the 500 Series.
The company said that it will also prepare measures including a recall as soon as possible for affected vehicles in use now, to address the risk that emissions from the affected vehicles may exceed regulatory limits over their full useful life and will also implement remedial measures in order to resume sales.
In terms of the AO9C and E13 heavy duty engines which are used in the recently released new 700 Series here in Australia, Hino discovered that while measuring fuel consumption in a certification test, the fuel flow rate calibration value of the dynamometer panel had been altered to make it display better fuel economy than it actually recorded.
Hino confirmed after a technical review, that the actual fuel economy performance did not meet the reported value.
As a result Hino has suspended sales of its heavy duty truck, the Hino Profia or 700 Series, and its heavy duty bus, the Hino S’elega, equipped with those engines.
More embarrassing still for Hino is the fact that those engines are also supplied to rival Isuzu in Japan and are used in its Isuzu Gala bus model and the problem affects around 1200 of the Isuzu buses.
The investigation into the light duty NO4C engine is continuing and at this stage and Hino says it has not identified any misconduct in relation to testing, however, the technical review has identified that the engine’s actual fuel economy may not meet the reported fuel economy value.
Increasing the embarrassment for Hino is the fact that this engine is installed in the Coaster bus made by its major sharholder Toyota.
“Hino must first take responsibility by getting to the bottom of the situation as soon as possible and by taking full preventive measures but Toyota will support Hino’s efforts toward this end,” a Toyota representative said.
Hino, is the market leader in heavy commercial vehicles in Japan selling 59,676 trucks and buses in Japan during the fiscal year ending March 2021, capturing around 30 per cent of the overall market. Although Toyota is the largest and controlling shareholder, the company operates independently of Toyota.
The other important implication that Hino says it will be considering is the impact in terms of the tax benefits it receives for the emissions and fuel economy performance of vehicles equipped with these engines. The company said will bear the cost of any additional tax payments that may be required.
Hino at this point of time says it has not identified any potential emissions or fuel economy irregularities for other engine models,
The company said it will decide what measures will need to be taken for its Ranger/500 Series models equipped with the A05C (HC-SCR) engine and will communicate with customers using the affected vehicles once the measures have been decided.
Hino was at pains to point out that the misconduct and issues related to engine performance ‘do not affect the drivability of the affected vehicles and raise no vehicle safety concerns’.
Hino admitted in the statement that it ‘failed to appropriately respond to internal pressures to achieve certain targets and meet schedules that were placed on Hino employees’.
“Hino management takes these findings extremely seriously and going forward, Hino is committed to putting compliance first,” the statement said.
The company said it has already begun working on improving its governance system, including organisational restructuring and commencing a review of its internal processes and procedures and says it will proceed to promote the compliance awareness of each employee.
The company says it will also form a special investigation committee consisting of ‘independent outside experts’ , that will will conduct an investigation to clarify ‘the extent of the identified issues and an in-depth analysis into the root causes’. The committee will also be asked to propose remedial measures concerning engine development processes and best practice at Hino.
“In order to restore the confidence of all stakeholders, Hino commits to carefully reviewing the reports from the outside experts, taking effective remedial measures and reforming its corporate structure to put compliance first,” the company statement said.
The data-rigging dates back to at least around 2016. That year, when Mitsubishi Motors was rocked by a fuel economy data scandal, Hino told a transport ministry probe that it had found no data manipulation.
“Not discovering the misconduct is a huge problem for our company,” Ogiso said Friday.
Because retesting will likely generate emissions levels exceeding legal limits, an estimated 43,000 trucks will be subject to a recall.
The Japanese Ministry of Land, Infrastructure, Transport and Tourism said in a statement that Hino’s data-rigging “erodes the trust of automobile customers and shakes the very foundations of the certification system,”
The ministry also said it has ordered Hino to conduct a thorough investigation into the matter and to explore preventive measures. The ministry has also ordered seven makers of heavy-duty trucks to launch probes, including Toyota, Isuzu and UD Trucks.
The companies have been given a deadline of 8 April to report any irregularities.