In a startling development, Toyota Motor’s Daihatsu unit, renowned for its compact “kei” cars, is facing a suspension of all vehicle shipments. The decision, announced on December 20th by Japan’s leading automaker, comes in the wake of a far-reaching safety scandal that involves an astonishing 64 models, including many under the Toyota brand.
The issue first surfaced in April when Daihatsu confessed to manipulating side-collision safety tests for about 88,000 small cars, predominantly sold as Toyota vehicles. However, the recent findings by an independent panel reveal a more extensive and historical problem than initially believed, posing a severe threat to the reputation of these automakers, known for their commitment to quality and safety.
Daihatsu, a subsidiary of Toyota, specializes in producing the popular “kei” cars and trucks in Japan. The scandal’s ramifications extend beyond Daihatsu and Toyota, affecting certain models of Mazda and Subaru in the Japanese domestic market (which are effectively ‘rebadged’ Daihatsu vehicles) as well as Daihatsu and Toyota models sold internationally.
Toyota’s response outlines the need for a “fundamental reform” to rejuvenate Daihatsu, emphasizing a thorough review of certification operations and organizational structure. Acknowledging the complexity of the task, Toyota stated, “It will require not only a review of management and business operations but also a review of the organisation and structure.”
The financial implications of this scandal for Toyota remain uncertain, with the company’s shares closing flat, underperforming in a market that otherwise saw a 1.4% rise.
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In-Depth Investigation and On-Site Inspection
The investigation uncovered that Daihatsu used different airbag control units in tests compared to those in cars sold to the public, affecting models like Toyota’s Town Ace and Pixis Joy and the Mazda Bongo.
Notably, Toyota reported no known accidents linked to this issue. However, it acknowledged that side-collision tests for two models might not comply with the law, even though airbag safety standards were met.
Japan’s transport ministry is set to conduct an on-site inspection at Daihatsu’s Osaka headquarters, reflecting the gravity of the situation.
International Impact and Regulatory Compliance
The scandal’s international reach is significant, with Daihatsu’s President Soichiro Okudaira highlighting the severity of the situation and the possibility of regulatory clearances being revoked. The misconduct extended to false reports on headrest impact tests and test speeds, with some instances dating back to 1989.
Daihatsu’s production figures are notable, with 1.1 million vehicles produced in the first ten months of the year, 40% of which were manufactured overseas. The affected models span diverse markets, including Southeast Asian countries like Thailand and Indonesia and Central and South American nations such as Mexico and Peru.
Toyota’s Previous Safety Challenges
This incident adds to a series of safety concerns within the Toyota group. In 2022, a similar scandal at Hino Motors, Toyota’s truck- and bus-making unit, led to resignations and pay cuts following admissions of falsified engine data dating back to 2003. Additionally, Toyota faced a major safety crisis in 2010 involving faulty accelerators, compelling Chairman Akio Toyoda to testify before the U.S. Congress.
This unfolding story underscores the challenges facing Toyota and Daihatsu as they navigate through this complex scandal, striving to uphold their reputation for safety and reliability in the automotive industry.