OSAMU SUZUKI STEPS DOWN AS CEO ON FALSE TESTS

Executive V-P Honda to retire over use of wrong mileage testing methods

Suzuki Motor patriarch Osamu Suzuki is stepping down as chief executive and the Japanese automaker promised to cut executive pay and slash 2015 bonuses, hoping to draw a line under the bruising admission of major flaws in its fuel tests.

Executive vice-president Osamu Honda, who also served as chief technicalofficer,willretire, taking responsibility for the research and development team at the heart of the testing scandal.

Japan’s No 4 automaker by sales said in May it had used the wrong methods to calculate mileage for models going back to 2010, widening a mileage testing storm that had already rocked smallerrivalMitsubishiMotors. Those followed accounting scandals at Olympus and Toshiba, prompting criticism from some investors that the Japanese government’spushtointroducenew corporate governance rules has failedtoshakeupacozyandoften secretive corporate culture.

Suzuki, who has led the company for nearly four decades, acknowledged that during the past few years it had become difficult to oversee all of the company’s operations on his own.

“Upon reflection, I believe that this may have contributed to the latest incident,” he told reporters on Wednesday.

Suzuki, 86, will remain as chairman, but his narrower role is a recognition of responsibilityforatestingerrorthecompany previously shrugged off.

The automaker used indoor tests for its cars’ individual parts, rather than testing vehicles on an outdoor course. It said this was done as its testing site is on a windy hill by the sea, making readings erratic.

On Wednesday, it also blamed a lack of transparency in its key research unit.

“This latest incident occurred because of problems within the company which had continued for a long time, including an R&D division which was not transparent enough,” said Toshihiro Suzuki, the chairman’s eldest son. He took over from his father as president last year.

“We are making these changes today to try to regain the trust of our customers, and to rebuild Team Suzuki.”

Upon reflection, I believe that this may have contributed to the latest incident. OSAMU SUZUKI, Suzuki Motor chairman and CEO