Toyota Motor’s Daihatsu unit will halt shipments of all of its vehicles after a safety scandal investigation found issues involving 64 models. Almost two dozen of these models were sold under Toyota’s brand. An independent panel has been investigating Daihatsu since April, when it was revealed that the company had rigged side-collision safety tests carried out for 88,000 small cars, most of which were sold as Toyotas. The scope of the scandal is far greater and goes back much further than previously thought, potentially tarnishing the automakers’ reputation for quality and safety.
Daihatsu, Toyota’s small-car unit, produces a number of the so-called “kei” smaller cars and trucks popular in Japan. However, the latest issues also impacted some Mazda and Subaru models sold domestically and Toyota and Daihatsu models overseas, according to the panel findings. Toyota stated that “fundamental reform” was needed to revitalize Daihatsu, as well as a review of certification operations. The company acknowledged that achieving this reform would not be accomplished overnight and would require a comprehensive review of management, business operations, and organizational structure.
Toyota said it could not determine the financial impact of the matter and that its shares closed flat on Wednesday. The investigation revealed that the airbag control units used by Daihatsu in airbag tests for some models differed from the ones used in cars sold to the public. Toyota also stated that it was not aware of any accidents related to the issue. However, side-collision tests of two models may not have complied with the law, despite verifications that confirmed the airbag met passenger safety standards.
As a result of these revelations, Japan’s transport ministry will conduct an on-site inspection at Daihatsu’s headquarters in Osaka. Daihatsu executives announced that overseas shipments will be suspended until the vehicles are cleared for sales again by regulators. President Soichiro Okudaira labeled the situation as “extremely serious” and affirmed that the automaker could potentially face revoked regulatory clearances if fraudulent means are discovered to have been involved.
Alongside the side-collision tests issue, the investigation found that the misconduct also included false reports on headrest impact tests and test speeds for some models. The panel reported that Daihatsu had committed acts of misconduct after 2014 and, for one already-discontinued Daihatsu vehicle, the issue stretched back to 1989. The chair of the third-party investigation committee, Makoto Kaiami, emphasized that the panel did not believe Toyota was responsible for the misconduct but that Daihatsu was trying to meet expectations it had placed on itself.
This issue emerged after Daihatsu reported a whistleblower’s claim in April and subsequently halted shipments of affected models. Later, Daihatsu also stopped sales of the Toyota Raize hybrid electric vehicle and its own Rocky model after discovering testing problems with these models. Toyota’s Daihatsu unit is the latest safety issue to impact the Toyota group over the years, demonstrating the significant impact of such issues on the company’s operations.
In previous safety issues, Daihatsu has produced 1.1 million vehicles over the first 10 months of the year, with nearly 40 percent of those being built overseas. The company sold approximately 660,000 vehicles worldwide over that period and accounted for 7% of Toyota’s sales. Furthermore, the safety issues also impacted models for Southeast Asian and Central and South American markets. Daihatsu is not the only safety issue to have affected the Toyota group, with previous scandals occurring at Hino Motors and regarding faulty accelerators.
With these revelations, it is clear that Toyota must address not only the immediate safety concerns but also review its processes and organizational structure to prevent similar issues from arising in the future.