Toyota’s Daihatsu Hits Pause on Vehicle Shipments Amid Safety Scandal

Toyota Motor’s subsidiary, Daihatsu, has announced the suspension of all vehicle shipments following an investigation that unveiled safety concerns in 64 models, including nearly two dozen sold under Toyota’s flagship brand.

The investigation, conducted by an independent panel, was initiated after Daihatsu admitted in April to manipulating side-collision safety tests for 88,000 small cars, primarily sold as Toyotas. 

However, the recent findings indicate a much broader scale of the scandal than initially acknowledged, raising concerns about potential damage to the automakers’ longstanding reputation for quality and safety.

Daihatsu, responsible for Toyota’s small-car division and the production of popular “kei” smaller cars and trucks in Japan, is facing allegations that the safety issues extend to certain Mazda and Subaru models domestically, as well as Toyota and Daihatsu models internationally.

In response to the crisis, Toyota emphasized the necessity for “fundamental reform” to rejuvenate Daihatsu, calling for a comprehensive review of certification operations and an overhaul of management, business operations, organization, and structure.

“This will be an extremely significant task that cannot be accomplished overnight,” stated Toyota in a formal release.

Shares of Toyota remained stagnant on Wednesday afternoon, contrasting with the broader market’s 1.6% rise.

The severity of the safety concerns has become more apparent, with Daihatsu now revealed to have manipulated safety tests for almost all of its current production models and certain past vehicles, as reported by the Asahi newspaper.

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Toyota’s Daihatsu Safety Scandal

toyota-daihatsu-hits-pause-vehicle-shipments-amid-safety-scandal
Toyota Motor’s subsidiary, Daihatsu, has announced the suspension of all vehicle shipments following an investigation that unveiled safety concerns in 64 models, including nearly two dozen sold under Toyota’s flagship brand.

The scandal surfaced when Daihatsu, prompted by a whistleblower report, admitted in April to conducting tests improperly and subsequently reported the issue to regulatory authorities. 

The company halted the shipment of affected models and ceased sales of specific models, such as the Toyota Raize hybrid electric vehicle and its own Rocky model, in the subsequent month.

Daihatsu, which manufactured 1.1 million vehicles in the first ten months of the year, with nearly 40% produced at overseas sites, sold 660,000 vehicles globally during that period, contributing to 7% of Toyota’s total sales.

Toyota disclosed that the impacted models included those destined for Southeast Asian markets and central and South American countries. 

Thailand, Indonesia, Malaysia, Cambodia, Vietnam, Mexico, Ecuador, Peru, Chile, Bolivia, and Uruguay are among the affected regions.

This safety scandal adds to a series of issues within the Toyota group over the years, including a 2022 engine data scandal at Hino Motors, Toyota’s truck- and bus-making unit, which led to resignations and temporary pay cuts. 

In 2010, Toyota Chairman Akio Toyoda was compelled to testify before the US Congress due to a safety crisis involving faulty accelerators.

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