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Kobe Steel Scandal Puts Some Japanese Automakers At Risk- Or Not.

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Kobe Steel Scandal Puts Some Japanese Automakers At Risk- Or Not.

The latest in a line of automotive scandals is Kobe Steel, sitting a little higher up the supplier chain than automakers themselves. Their business is fairly horizontal, so they supply to various industries beyond merely the automotive sector. Just today Reuters reported that the Japanese supplier had falisified a certain amount of data to show that their products met the requirements of their customers.

Kobe Steel supplies a range of manufactured items and raw materials, from aluminium to copper, and of course- steel. 4% of their products sold between September 2016 and August 2017 had falsified test data- and this is misconduct that has apparently stretched back over a decade. Naturally you would expect investors to bail out of a company like Kobe Steel when faced with a scandal like this, and the market has reacted as you would imagine. But perhaps it isn't so bad.

Of the numerous manufacturers that Kobe Steel supplies to, Subaru, Mazda, and Toyota stand out as distinctive automakers. They even supply to the Central Japan Railway, and even more interesting is Mitsubishi Heavy Industries (MHI). Not to be confused with Mitsubishi Motor Corporation, MHI is in the business of more elaborate things- such as launching rockets to put navigation satellites in orbit. MHI reported that their most recent launch saw no issues with its components- and while the extent of this scandal is unknown, it could be falsified data on paperclips for all we know. We'll just have to keep track of any recalls made as a result in the next few years. 

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