Toyota’s subsidiary Daihatsu announced on Wednesday that it will halt production of all its vehicles in Japan until the end of January, following a safety scandal that revealed the company had rigged safety tests for dozens of models.
Safety tests rigged
In April, Daihatsu admitted that it had rigged the side-collision safety tests for 88,000 small cars and trucks, mostly sold under the Toyota brand. The company said it had discovered the wrongdoing after a whistleblower report and reported the issue to the transport ministry.
However, an independent panel that investigated the scandal found that the problem was much more widespread and dated back to 2016. The panel said Daihatsu had rigged the airbag tests for 64 models, including 22 Toyota-branded ones, by using different airbag control units for testing and production. They also said the issue impacted some Mazda and Subaru models sold in Japan and some Toyota and Daihatsu models sold overseas.
The panel criticized Daihatsu for its lack of governance, quality control, and compliance and said that the company needed a “fundamental reform” to restore trust.
Production and shipment suspended
Daihatsu said it would suspend production of all its vehicles in Japan until the end of January and halt shipments of all its vehicles, both domestic and overseas until it could confirm that they met safety standards. The company said it will also recall and inspect the affected vehicles and offer free repairs if needed.
The production halt will affect about 150,000 vehicles, and the shipment halt will affect about 200,000 vehicles, according to Daihatsu. The company said it could not estimate the financial impact of the scandal yet, but analysts said it could be significant.
Toyota, which owns 100% of Daihatsu, said it was “deeply sorry” for the trouble caused to its customers and stakeholders and said it will support Daihatsu in its reform efforts. Toyota said it will also review its certification operations and cooperate with the transport ministry’s investigation.
Repercussions and reactions
The safety scandal is a major blow to Daihatsu, which is the second-largest maker of small cars in Japan after Suzuki. Daihatsu sold about 1.2 million vehicles in the fiscal year that ended in March, accounting for about 10% of Toyota’s global sales.
The scandal could also tarnish Toyota’s reputation for quality and reliability, as the company has been trying to recover from a series of recalls and lawsuits over faulty airbags and unintended acceleration in the past decade.
The transport ministry said it will conduct an on-site inspection at Daihatsu’s headquarters on Thursday and may take administrative action against the company, such as revoking its certification or imposing fines. The ministry also said it would check other automakers for similar misconduct.
The public and the media expressed their anger and disappointment at Daihatsu’s scandal and called for stricter regulations and oversight of the auto industry. Some customers said they felt betrayed and unsafe, and some said they would switch to other brands.
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