Pressure to Achieve Quotas Fueled Bigmotor’s Repair Wrongdoing

The Yomiuri Shimbun

16:18 JST, July 27, 2023

Employees at scandal-hit Bigmotor Co. have revealed that the rampant insurance fraud at the used-car dealer stemmed from heavy pressure to achieve profit quotas, and involved staffers deliberately damaging customers’ vehicles — with tools, sandpaper and even a sock containing a golf ball — to pad insurance claims sent to insurance companies.

Several Bigmotor executives attended a hearing over the scandal at the Land, Infrastructure, Transport and Tourism Ministry on Wednesday.

According to a current full-time employee at a Bigmotor outlet in the Kanto region, the plant manager intentionally damaged vehicles that required repairs, and employees were forced to do likewise.

“The manager often kicked customers’ vehicles and hit them with a wrench,” the employee told The Yomiuri Shimbun. “I was instructed to do the same thing to increase the number of vehicle parts that required repairs. I got yelled at if I didn’t do what I was told.”

The employee also claimed a senior executive of the company’s head office who visited the outlet several years ago picked up a rubber mallet and hit a customer’s vehicle while the plant manager watched. The employee believed the executive was teaching the manager how to enlarge the size of the damaged part needing repair.

The Road Traffic Law prohibits companies from charging for repair work that has not been requested.

However, a report compiled by an investigative committee comprising external lawyers has revealed such wrongdoing was rampant at Bigmotor, with numerous methods used so Bigmotor could charge customers more than was necessary over the repairs and thereby receive inflated payments from customers’ insurers.

The report found actions that betrayed Bigmotor’s customers had been conducted at 34 plants from Hokkaido to Kagoshima Prefecture. This included swinging around a sock containing a golf ball and then striking the car body with it, and using sandpaper to damage vehicle parts.

A 29-year-old former male employee who had been in charge of the sheet metal division at several outlets in the Kyushu region in the 2010s said a plant manager instructed him to do illegal repairs. In some cases, a bumper given only a new coat of black paint was falsely claimed to have been replaced with a brand-new part, and the padded costs were then billed to an insurer.

“I suggested twice to the manager that we should stop doing this, but he didn’t take me seriously at all,” the former employee said.

Quotas dominated workplace

Bigmotor’s excessive focus on making profits and its punishment of employees who failed to deliver results also were background factors in the company’s misconduct.

According to the report, the company used “@” to refer to the total amount of profit per vehicle from the repair and replacement of parts. Bigmotor demanded that its outlets book an average @ of about ¥140,000.

In about 2018, a former general manager of Bigmotor’s sheet metal and paint division assembled plant managers from across Japan for a meeting at which they were instructed to boost their gross profit per repair. Plant managers in charge of plants that were performing poorly were grilled over the reasons for these lackluster results.

Several former plant managers reportedly told the committee they started the wrongdoing “because of the strong pressure from the former general manager.”

Plant managers exchanged information and details about ways to boost their average profit per vehicle. Employees at the repair shops did the actual dirty work.

“A plant manager who did not meet the profit quota for two or three consecutive months would be replaced or demoted to a rank-and-file employee. The dishonest behavior became a daily occurrence to increase sales,” a former full-time employee said. This employee said his workplace became dominated by sales quotas and iron-fisted personnel appointments.

‘Fundamentally mistaken’

Buying and selling second-hand vehicles typically accounts for the bulk of a used-car dealer’s sales. The sheet metal and painting division is considered an inconspicuous but vital component that underpins the buying and selling of vehicles.

Even at Bigmotor, this division’s sales made up only 2% to 3% of the entire group’s sales. Seasoned Bigmotor employees also insisted that bodywork and painting “are not jobs that make money,” but their protests did not reach the company’s upper echelons.

The report criticized Bigmotor’s management policy, saying it was “fundamentally mistaken” to set sales targets for the sheet metal and painting division and also essentially put profit above all else.

At a press conference Tuesday, then Bigmotor President Hiroyuki Kaneshige spoke about the scandal as if it were somebody else’s mess. “This is the height of irrationality. Senior officials misunderstood targets to increase productivity, and nobody could complain about what was going on,” Kaneshige said.

Automobile critic Mitsuhiro Kunisawa said Bigmotor’s misconduct has dented the auto repair industry. “The bodywork and painting division is primarily expected to faithfully handle damaged vehicles and gain customers’ trust, to pave the way to the next vehicle sale,” Kunisawa said. “Bigmotor bears an extremely heavy responsibility for eroding trust in the automobile repair and maintenance industry.”