Message from the Chief Quality Officer

Delivering Unchanging, Reliable Quality in Constantly Changing Times

Reviving “The DENSO of Quality”—
Reflections on the Fuel Pump Recall Issue

Since its establishment, DENSO has adopted the company motto of “Quality and Safety First” and has passed down this management philosophy across generations. Despite these efforts, starting in 2020, a major recall involving our fuel pumps was reported by several automakers, which ended up becoming the largest quality- related issue in the Company’s history. This issue caused a great deal of concern and inconvenience among our stakeholders. Meanwhile, thanks to the great support and cooperation of many of our business partners and other stakeholders, we were able to accomplish the delivery of replacement parts, and I would like to express my deepest gratitude to all parties involved.

In fiscal 2025, although there were no additional provisions related to this fuel pump recall, several other quality-related issues occurred. We understand that these issues have caused a great deal of concern and inconvenience among our customers, users, and other stakeholders and we take them very seriously. These issues have also significantly impacted our own financial performance. Accordingly, we are working to improve quality and to revive “The DENSO of Safety and Quality,” as one of our highest priorities in management.

Addressing New Quality-related Challenges in a Changing Business Environment

With the shift toward electrification, rising needs for automated driving, and widespread adoption of software-defined vehicles (SDVs), the operating environment with respect to quality is undergoing significant changes. With more and more domains of automotive functions becoming dependent on software, it has become increasingly important to ensure quality across multiple functional domains. Furthermore, global competition is becoming more intense, and there is a growing need to shorten the period for product development to half the time that was previously allotted. Under these circumstances, we must make sure that we can develop products that offer our greatest competitive edge—quality—at an unprecedented speed. To address the constantly changing quality-related challenges, DENSO is accelerating the following initiatives.

Improve the quality of software:
To create high-quality software, we have defined in detail the elemental technologies for software development and certify specialists in each relevant domain. At the earliest stage of development, we identify the required elemental technologies and assign certified specialists to each technology, who then review the designed deliverables. Through this process, we are working to enhance the quality of our software. DENSO has introduced SOMRIE®, which provides an objective certification of skills, and established a target to triple the number of experts in each domain of its technologies from 2023 to 2030, thereby accelerating the cultivation of software experts. At the same time, we will actively utilize AI in software development. By leveraging AI for up to 40% of the development process, we aim to eliminate human error.

Enhance the quality of in-vehicle electronic components:
Our products contain hundreds to thousands of electronic components, each of which is required to meet high-level quality standards. To enhance our ability to detect defects at suppliers and within DENSO, we ask our suppliers to provide information on manufacturing methods and inspection processes while ensuring the necessary protection of confidential information and supplier know-how. This allows us to optimize inspections across the entire supply chain, from supplier to the Company, in an efficient and effective manner, thereby bolstering our full ability to detect defects.

Increase work quality and efficiency by utilizing AI:
We will work to organize and standardize the complex flow of goods and information within our work processes. In addition, we will bring together assets such as the know-how that we have cultivated to date and lessons learned from past failures. Through the use of AI technologies, we will communicate the necessary information for ensuring quality in a timely and appropriate manner, based on our long-cultivated insights. In this way, we will further bolster the quality and speed of all work processes, from development to production. We are proceeding with development activities with the aim of introducing AI technologies in all work processes by fiscal 2028.

Fostering a Healthy Corporate Culture That Engenders a High Level of Compliance Awareness

Looking back on the overall automotive industry in 2024, multiple companies were found to be involved in certification fraud. At DENSO, we conduct awareness-raising activities for employees annually through training on certification-related regulations. In light of the certification fraud that occurred at other companies, we have also carried out a Companywide inspection and are rigorously enforcing compliance with laws and regulations. Additionally, as another measure to prevent any misconduct from occurring, we have set up a framework with nine checkpoints within the processes before mass production and shipment, including a check procedure by department that specializes in certification and regulatory affairs, which is independent from the development and testing divisions, and a double-check procedure by the quality assurance department, which is independent from the certification department.

In addition to such frameworks, we need to have in place a work culture that facilitates good communication and engenders a high level of compliance awareness if we are to prevent misconduct from occurring. To that end, we are constantly working to maintain a culture that embraces an honest exchange of opinions between supervisors and subordinates so that every employee understands the real issues and works to tackle them together.

Meeting the Expectations of Society through Quality Everyone Can Trust

“Be trustworthy and responsible”—these words, engraved in the DENSO Creed, remain an unwavering guiding principle for our commitment to quality, even as the business environment continues to undergo significant change. By anticipating change and practicing the right approach to our work, we promise to meet society’s expectations to maintain a standard for quality that ensures our products can be used safely by anyone. We ask for your continued support as we pursue these endeavors moving forward.