Toyota Motor Corporation, one of the world's leading automakers, has been thrust into a deepening safety scandal, leading to a significant operational pause. The scandal centers around its subsidiary Daihatsu, which has admitted to falsifying safety test results on many vehicle models, affecting both domestic and international markets.
This issue first came to light in April 2023, when Daihatsu revealed that it had manipulated side-collision safety tests for 88,000 small cars, most of which were sold under the Toyota brand.
An independent investigation has since uncovered a broader pattern of misconduct, identifying irregularities in 174 vehicle models. These irregularities include using different airbag control units in tests compared to those in the vehicles sold to the public and falsifying headrest impact tests and test speeds.
As a result of these findings, Toyota has suspended all shipments of Daihatsu vehicles, including those sold under the Toyota and Mazda brands. This halt affects both domestic production and international shipments to regions such as Southeast Asia and Latin America
The Japanese transport ministry is also set to conduct an on-site inspection at Daihatsu's Osaka headquarters, further emphasizing the gravity of the situation.
Daihatsu, which has been a wholly-owned subsidiary of Toyota since 2016, plays a big role in Toyota's production, particularly in the compact car segment. The scandal not only affects Daihatsu's reputation but also threatens to tarnish Toyota's long-standing image of reliability and safety.
This is particularly troubling as Toyota has previously faced safety-related issues, including a major recall in 2010 due to faulty accelerators and a data falsification scandal involving its truck and bus unit, Hino Motors, in 2022.
In response to the scandal, Toyota has emphasized the need for "fundamental reform" within Daihatsu. This includes a comprehensive review of its management, business operations, and organizational structure.
Toyota has expressed deep regret over the burden placed on Daihatsu and has committed to working towards rectifying the issues.
While Toyota has not yet determined the financial impact of the scandal, its shares remained flat following the announcement, in contrast to a 1.4% rise in the broader market.
This indicates investor caution as the company navigates this significant challenge.
The Daihatsu safety test scandal marks a critical moment for Toyota, as it deals with the repercussions of widespread regulatory violations. The outcome of the ongoing inspections and the company's efforts to reform will be closely watched by industry analysts, regulators, and consumers alike.
For now, Toyota faces the daunting task of restoring confidence in its commitment to safety and quality for it's customers globally.
