Business Essentials for Professionals


Toyota's Daihatsu Will Stop Shipping Any Cars As A Result Of An Expanding Safety Controversy

Toyota's Daihatsu Will Stop Shipping Any Cars As A Result Of An Expanding Safety Controversy
The largest manufacturer in Japan, Toyota Motor, announced on Wednesday that its Daihatsu division will stop shipping all of its cars after a safety scandal probe discovered problems with 64 models, nearly two dozen of which were sold under the Toyota name.
Daihatsu has been the subject of an independent panel's investigation since it revealed in April that it had manipulated side-impact safety tests for 88,000 small cars, the majority of which were sold as Toyotas.
However, the most recent information indicates that the scandal's extent is significantly larger than previously believed, which might damage the automakers' reputation for dependability and quality.
Toyota's small-car division, Daihatsu, manufactures many of the well-liked "kei" tiny cars and trucks in Japan.
The panel discovered that the most recent problems also affected certain domestically marketed Mazda and Subaru cars as well as foreign-sold Toyota and Daihatsu models.
Toyota stated that "fundamental reform" and an examination of certification procedures were required to revitalise Daihatsu.
"This will be an extremely significant task that cannot be accomplished overnight," Toyota said in a statement. "It will require not only a review of management and business operations but also a review of the organisation and structure."
As the market as a whole rose 1.6% on Wednesday afternoon, Toyota's shares remained flat.
Asahi newspaper earlier stated that Daihatsu was discovered to have cheated on safety testing of practically all models it presently has in production as well as certain automobiles it created in the past.
The problem surfaced when Daihatsu announced in April that it had found the improperly carried out tests following a disclosure from a whistleblower. It had stopped shipping the impacted models and reported the problem to regulatory bodies.
The following month, it announced that it has halted sales of both its own Rocky model and the Toyota Raize hybrid electric car due to issues with testing for both models.
According to Toyota data, Daihatsu produced 1.1 million vehicles in the first ten months of this year, with over 40% of those being built at foreign locations. During that time, it sold about 660,000 cars globally, or 7% of Toyota's total sales.
Toyota announced on Wednesday that the impacted models were those for the countries of Mexico, Ecuador, Peru, Chile, Bolivia, and Uruguay in Central and South America, as well as the Southeast Asian markets of Thailand, Indonesia, Malaysia, Cambodia, and Vietnam.
The most recent safety concern to affect the Toyota group throughout the years is Daihatsu.
In 2022, an engine data scandal at Hino Motors, Toyota's truck and bus manufacturing division, resulted in manager resignations and temporary salary reductions for a few of them.
In another instance, Hino acknowledged that it had fabricated data on a few engines going back to 2003, or at least ten years earlier than it had previously claimed.
Toyota CEO and chairman Akio Toyoda was compelled to go before Congress in 2010 over a safety issue concerning malfunctioning accelerators.

Christopher J. Mitchell

Markets | Companies | M&A | Innovation | People | Management | Lifestyle | World | Misc