Japan’s automotive industry has been the subject of some of the largest lawsuits and enforcement actions in modern corporate history. Japan automotive lawsuits over the past two decades include a global parts price-fixing cartel that drew more than $20 billion in worldwide penalties, the Takata airbag prosecution tied to 28 U.S. deaths, Mitsubishi’s fuel economy falsification, Daihatsu’s decades-long safety test fraud, an industry-wide certification scandal that pulled in Toyota, Honda, and Mazda, and the still-unfolding criminal and civil litigation around former Nissan chairman Carlos Ghosn.
The Auto Parts Price-Fixing Cartel
Starting in 2011, the U.S. Department of Justice pursued Japanese auto parts manufacturers for rigging bids, fixing prices, and manipulating the supply of more than 30 types of components sold to American automakers. The schemes affected over $5 billion in parts installed in more than 25 million vehicles bought by U.S. consumers, and some conspiracies had been running for over a decade.1FBI. Sticker Shock: Guilty Pleas Show High Cost of Price-Fixing in Auto Industry
In September 2013, nine Japan-based companies pleaded guilty and paid a combined $740 million in criminal fines. The heaviest penalties fell on Hitachi Automotive Systems ($195 million), Mitsubishi Electric ($190 million), and Mitsuba Corporation ($135 million). Jtekt, NSK, Mitsubishi Heavy Industries, T.RAD, Valeo Japan, and Yamashita Rubber also pleaded guilty in that round.2The Manufacturer. US Levies $740M Price-Fixing Fines Against Japanese Auto Firms Executives used code names and met in remote locations in the U.S. and Japan to coordinate bids.3Manufacturing.net. Japan Car Parts Makers in Price-Fixing Plea Regulators in the European Union, Canada, South Korea, Mexico, and Australia ran parallel investigations, and worldwide penalties on nearly 300 corporate participants eventually topped $20 billion.4American Antitrust Institute. Auto-Parts Cartel: In the Twilight
The criminal cases fed a parallel wave of civil litigation. Beginning in 2012, consumers and businesses filed class actions in the U.S. District Court for the Eastern District of Michigan, consolidated as multidistrict litigation before Judge Marianne Battani and grouped by component — alternators, radiators, wire harnesses, air conditioning systems, electronic braking systems, and more.5Robins Kaplan LLP. Ice-Breaker Settlement Reached in Massive Auto Parts Antitrust Litigation Settlements were resolved in five rounds and totaled roughly $1.2 billion, with the two largest rounds bringing in $433 million and $379 million.6Automotive Parts Antitrust Litigation. FAQ DENSO alone paid $193.8 million to end-payor plaintiffs — U.S. consumers and businesses that had bought vehicles containing the price-fixed parts.7Susman Godfrey LLP. U.S. Consumers and Businesses Obtain a $193.8 Million Settlement With DENSO
The Takata Airbag Prosecution
Takata Corporation, based in Tokyo, manufactured airbag inflators that used ammonium nitrate propellant. Heat and humidity could cause the inflators to rupture on deployment and fire metal fragments into the cabin. NHTSA has confirmed 28 deaths and at least 400 injuries in the United States. Roughly 67 million airbags were recalled in the U.S., in vehicles from Honda, Toyota, Lexus, Mazda, Nissan, Infiniti, Subaru, Mitsubishi, and others.8NHTSA. Takata Recall Spotlight
In January 2017, Takata pleaded guilty to one count of wire fraud in the Eastern District of Michigan. The company admitted it had known since around 2000 that its inflators failed to meet specifications and had ruptured in testing, and that it submitted false reports to customers. The $1 billion in criminal penalties broke down into a $25 million fine and $975 million in restitution — $125 million for individuals physically injured and $850 million for automakers covering recall costs.9U.S. Department of Justice. United States v. Tanaka et al. (Takata Corporation)
The automakers faced their own consumer class actions for economic losses. In May 2017, BMW, Mazda, Subaru, and Toyota announced a combined $553 million settlement, with Toyota contributing the largest share at $278.5 million and Mazda paying $76 million.10TRT World. Four Car Manufacturers Reach $553 Million Takata Airbag Settlement The deal covered nearly 16 million recalled vehicles and funded outreach, rental cars for owners awaiting parts, and out-of-pocket reimbursement. The automakers did not admit fault.11Subaru Media. BMW, Mazda, Subaru, Toyota Announce Settlement of Takata Economic Loss Claims Cases against Honda, Ford, and Nissan remained unsettled at that time.
Mitsubishi Motors and Fuel Economy Fraud
In April 2016, Mitsubishi Motors admitted it had intentionally falsified fuel economy test data for more than 625,000 vehicles sold in Japan. Employees ran treadmill tests at incorrect tire pressures to inflate mileage figures by 5 to 10 percent. The affected models were kei cars with 660cc engines: Mitsubishi’s eK Wagon and eK Space, plus the Nissan Dayz and Dayz Roox, which Mitsubishi built under contract for Nissan.12BBC. Mitsubishi Motors Admits Falsifying Fuel Economy Tests Nissan had discovered the discrepancies.13Financial Times. Mitsubishi Motors Admits to Falsifying Fuel Tests
Mitsubishi later conceded that flawed testing practices went back 25 years, and investigators found managers had felt intense pressure to match rivals’ fuel economy figures. The company projected a net loss of ¥145 billion ($1.4 billion) for the following fiscal year, its stock fell 37 percent in two months, and two top executives resigned.14CNN. Mitsubishi Motors Fuel Tests Loss Nissan stepped in with a multibillion-dollar investment, and Mitsubishi ultimately paid $600 million in compensation to affected owners.15Financial Times. Mitsubishi Motors Fuel Economy Scandal
Daihatsu’s Safety Test Fraud
In December 2023, an independent investigation commissioned by Toyota found that its subsidiary Daihatsu had manipulated safety tests for 64 vehicle models over roughly three decades. The committee identified 174 irregularities across 25 test categories, including falsified collision tests, airbag tests run with non-production components, and manipulated speed test data.16Toyota Global. Third-Party Committee Report on Daihatsu Safety Testing Irregularities Twenty-four of the 64 models had been sold under the Toyota brand.17BBC. Daihatsu Safety Scandal
Daihatsu halted shipments of every model in production, at home and abroad, and closed all four of its Japanese plants until the end of January 2024. The company pledged to compensate its 423 direct domestic suppliers during the shutdown.17BBC. Daihatsu Safety Scandal In January 2024, Japan’s Ministry of Land, Infrastructure, Transport and Tourism revoked the type designations for three light vehicles — the Daihatsu Gran Max, Toyota Town Ace, and Mazda Bongo — barring their mass production until they were recertified. Transport Minister Tetsuo Saito issued a formal corrective order demanding a drastic overhaul of Daihatsu’s organizational structure.18The Asahi Shimbun. Transport Ministry Revokes Daihatsu Type Designations
The 2024 Industry-Wide Certification Scandal
Daihatsu’s revelations prompted Japan’s transport ministry to order every automaker to review its certification compliance over the past decade. In June 2024, the results showed the problem reached well beyond a single company.
Toyota admitted it had failed to gather proper data during pedestrian and occupant safety tests, and suspended production of the Corolla Fielder, Corolla Axio, and Yaris Cross.19BBC. Toyota, Honda, Mazda Raided Over Safety Test Scandal Honda acknowledged wrongdoing on noise and engine power testing. Mazda halted shipments of certain models. Suzuki’s findings applied to one model no longer in production, and Yamaha also disclosed irregularities.20New York Times. Japan Toyota Testing Investigation
Toyota Chairman Akio Toyoda publicly apologized, saying, “We neglected the certification process and mass produced our cars without first taking the proper precautionary steps.”19BBC. Toyota, Honda, Mazda Raided Over Safety Test Scandal The transport ministry raided Toyota’s headquarters on June 4, 2024, scheduled inspections at Honda, Mazda, Suzuki, and Yamaha, and instructed 85 vehicle and parts manufacturers to investigate and report any certification irregularities from the past decade.21Japan Forward. Toyota, Mazda, Honda Certification Irregularities
By July 2024, further inspections turned up intentional irregularities in seven more Toyota models, including the Noah, Voxy, RAV4, Harrier, and Lexus LM. The ministry issued a formal corrective order to Toyota and notified overseas authorities about six models certified for sale abroad. Toyota said it planned to resume production of the affected models beginning in September 2024.22CNN. Japan Reforms Toyota Certification Violations The automakers maintained the testing failures did not compromise the actual safety of vehicles already on the road.
The Carlos Ghosn Litigation
Carlos Ghosn, former chairman of Nissan and head of the Renault-Nissan-Mitsubishi Alliance, was arrested in Tokyo in November 2018 and fled to Lebanon in December 2019, launching legal proceedings across several countries.
Criminal Cases
Ghosn faces four criminal indictments in Japan alleging he understated his compensation in securities filings and misappropriated Nissan funds. He has never stood trial. He fled hidden in an audio equipment case aboard a private jet and settled in Lebanon, which has no extradition treaty with Japan.23Quartz. Nissan Carlos Ghosn Indictment Fugitive Yacht The two men who orchestrated the escape, Michael and Peter Taylor, were convicted and sentenced to two years and one-and-a-half years in prison respectively.24Forbes. Ex-Renault Nissan Boss Ghosn to Face Corruption Trial in Paris
In France, Ghosn and former French Culture Minister Rachida Dati have been ordered to stand trial on corruption and abuse of power charges tied to $1 million in consultancy fees paid to Dati between 2010 and 2012. A Parisian court will set a trial date in September 2026. France also has no extradition treaty with Lebanon, and there appears to be no legal mechanism to compel Ghosn’s appearance.24Forbes. Ex-Renault Nissan Boss Ghosn to Face Corruption Trial in Paris
The Greg Kelly Conviction
Greg Kelly, the former Nissan executive arrested alongside Ghosn in 2018, was convicted by a Tokyo court in March 2022 on charges related to understating Ghosn’s compensation for fiscal year 2017. He was acquitted for fiscal years 2010 through 2016. His six-month sentence, suspended for three years, was upheld by the Tokyo High Court. In February 2025, his legal team filed an appeal with Japan’s Supreme Court, where the case remained pending as of early 2025.25Asia Times. How Japan Appeals Court Rubber-Stamped Kelly Verdict in Ghosn Case
The conviction has drawn criticism. Kelly’s defense argued that other Japanese executives had proposed the compensation plans and that key internal documents supporting that claim were excluded as hearsay. A central prosecution witness, Nissan’s former secretariat head Toshiaki Ohnuma, had received an immunity agreement from the Tokyo prosecutor’s office.25Asia Times. How Japan Appeals Court Rubber-Stamped Kelly Verdict in Ghosn Case
The Civil Fights and the Superyacht
Nissan has pursued Ghosn in civil courts around the world. In the British Virgin Islands, High Court Judge Gerhard Wallbank issued a 56-page judgment in August 2024 finding that Ghosn had misappropriated $32 million from a CEO-controlled fund at Nissan. The court found that a shell company called Beauty Yachts had “dishonestly assisted” the scheme, with some of the funds used to buy a 121-foot Italian-built superyacht originally named “Shachou,” Japanese for “The Boss.” The court ordered $32 million in damages and the surrender of the yacht. Ghosn has said he intends to appeal.23Quartz. Nissan Carlos Ghosn Indictment Fugitive Yacht
Nissan has also filed a civil claim in a Yokohama court seeking ¥15.5 billion (roughly $102.5 million) from Ghosn, and Ghosn has filed his own $1 billion suit against Nissan in Lebanon claiming damages and lost compensation.23Quartz. Nissan Carlos Ghosn Indictment Fugitive Yacht
Why So Many of These Cases Are Fought in U.S. Courts
Japan’s Product Liability Act, enacted in 1994, imposes strict liability on manufacturers, processors, and importers for damage caused by defective products. A plaintiff does not have to prove negligence, but must show a defect existed, that it caused harm, and that the defendant delivered the product. Courts have allowed a presumption of defect when the plaintiff proves normal usage and proper maintenance, even without pinpointing the technical cause — a principle applied in a 2021 Osaka High Court decision involving vehicle engine fires.26Nagashima Ohno & Tsunematsu. Class and Group Actions: Product Liability Comparative Guide – Japan
Several features of the Japanese system make large-scale product liability litigation less common than in the United States. Japan does not allow punitive damages. There is no broad discovery process, so plaintiffs must gather their own evidence. And while an opt-in collective redress mechanism exists for certain consumer property damage claims, it largely excludes personal injury and wrongful death.27ICLG. Product Liability Laws and Regulations – Japan Those structural limits are much of the reason the largest automotive lawsuits involving Japanese companies — the parts cartel case, the Takata plea and settlements, the consumer class actions — have been litigated in U.S. courts, where class actions and treble damages in antitrust give plaintiffs far stronger tools.