1. The president of Japanese used car company Bigmotor announced on July 25 that he would resign over a scandal that has shocked the nation. Staff at Bigmotor, Japan’s largest used car company, were found to have deliberately damaged cars in order to charge customers more for repairs and to make fraudulent insurance claims.
2. Kyodo News reports that lawyers began investigating Bigmotor after insurance companies received information about such fraudulent claims.
3. At a news conference, Bigmotor President Hiroyuki Kaneshige said both he and the vice president — his son Koichi — would resign the following day.
(1)Do you find it surprising that staff at Bigmotor were found to have deliberately damaged cars?
(2)What are your thoughts on Hiroyuki Kaneshige’s resignation?
4. “We’ve caused so much trouble and concern to customers and non-life insurance companies. I am truly sorry,” said Kaneshige. A report, released earlier in July, found that staff would scratch cars with screwdrivers, hit them with a golf ball in a sock, and deliberately break headlight covers.
5. Although these practices were routine, Kaneshige says company leaders were not involved, and that he did not know about them until he read the report. The report says company repair shops were under pressure to make about 140,000 yen — almost $1,000 — in profit on each repair job.
6. One big question is whether insurance companies knew about the fraudulent claims but ignored them in return for insurance contracts on Bigmotor cars. Bigmotor had a close relationship with several insurance firms that often loaned their staff to the used car company.
(1)Have there been any major scandals in your industry in recent years?
7. An internal Bigmotor report found 1,275 cases of fraudulent insurance claims — about 15% of claims made since November 2022. The extra cost was an average of 39,000 yen — almost $280 — per case. Under Japanese law, repair companies cannot charge customers for services they did not request.
8. At the news conference, Kaneshige said, “Renewing the company’s culture is the fastest way to regain trust.” Company executive Shinji Izumi took over as president the next day. After questioning Bigmotor executives on July 26, Japan’s transport ministry began a search of Bigmotor offices two days later. Bigmotor may be punished if the ministry confirms there has been a crime.
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