Tokyo, Japan - August 23, 2024

The continuously exposed fraud scandals across Japan's manufacturing sector will seriously harm the national economy, a Japanese economist said in Tokyo on Friday.

Japan's Ministry of Land, Infrastructure, Transport and Tourism said in June that it received reports of fraudulent activities related to the certification applications required for mass production of vehicles from five major domestic automakers, namely, Toyota, Mazda, Yamaha, Honda and Suzuki.

Japanese national broadcaster NHK also reported on Thursday that the country's Kawasaki Heavy Industries has falsified fuel-efficiency data on its ship engines for more than 20 years.

Kawasaki Heavy announced that it altered data on 673 of 674 engines which were mounted on vessels including large cargo ships, container ships and tankers in and after 2000, when regulations on harmful nitrogen oxides were enforced, according to the NHK.

Tashiro Hidetoshi, chief economist at Mugen LLC, said in an exclusive interview with China Central Television (CCTV) that the continued depreciation of the yen in recent years has been a catalyst for the scandals, as cost savings have become one of the key motivations for Japanese companies to falsify data against currency devaluation.

Tashiro said the automotive, shipbuilding, and heavy machinery are economic pillars of Japan, and a complete industrial chain has been formed from upstream leading enterprises to downstream contractors, however, the fraud scandal of Japanese companies will shake the entire industrial chain, and the Japanese economy will face serious risks if the fraud situation worsens.

Shotlist:
Tokyo, Japan - Aug 23, 2024:
FILE: Tokyo, Japan - Date Unknown
1. Aerial shots of cityscape, traffic;
2. Various of pedestrians, buildings;
Tokyo, Japan - Aug 23, 2024
3. SOUNDBITE (Japanese) Hidetoshi Tashiro, chief economist, Mugen LLC (partially overlaid with shots 4-7):
"Japanese companies themselves have betrayed consumers' trust in the quality of their products. Cutting costs is more important to Japanese companies than anything else, especially now that the price of imported raw materials has become very high due to the depreciation of the yen, so they have to cut costs in factories and reduce unnecessary expenses. If the government-required testing is omitted, the costs saved can become profits, so Japanese companies have an incentive to engage in improper behavior.";
[SHOTS OVERLAYING SOUNDBITE]
FILE: Tokyo, Japan - June 16, 2022
4. Various of signs of Bank of Japan;
FILE: Tokyo, Japan - Date Unknown
5. Various of Japanese yen notes going through bill counter;
6. Japanese yen banknotes on counter;
7. Various of cityscape
[SHOTS OVERLAYING SOUNDBITE];
Tokyo, Japan - June 10, 2024
8. Various of Honda Motor dealership, sign of Honda;
9. People talking in dealership;
Tokyo, Japan - Aug 23, 2024
10. SOUNDBITE (Japanese) Hidetoshi Tashiro, chief economist, Mugen LLC (partially overlaid with shots 11-14):
"The manufacturing industry invests heavily in building large factories and employing a large number of people. If the future prospects are not transparent, this industry will have problems. If companies engage in improper behavior and are punished by the government, production and sales will halt, and of course there will be no orders to contractors. This series of reactions is a very serious situation and will have a great impact on the Japanese economy. For example, Japan's GDP. Not only will domestic production activities in Japan decrease, but consumption will also decrease. The automobile industry accounts for a large proportion of Japan's economy, and the Japanese economy will be very unstable.";
[SHOTS OVERLAYING SOUNDBITE]
FILE: Japan - Date Unknown
11. Aerial shots of plant, sign of Toyota;
12. Various of parked vehicles, sign of Toyota at dealership;
FILE: Tokyo, Japan - 2022
13. Various of vehicles moving, sign of Subaru;
FILE: Chiba Prefecture, Japan - 2023
14. Various of cars for sale at dealership
[SHOTS OVERLAYING SOUNDBITE];
FILE: Tokyo, Japan - Date Unknown
15. Various of traffic, pedestrians.

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