Japanese automaker Daihatsu, a subsidiary of Toyota (TYO: 7203), has suspended domestic production after admitting to falsifying safety test results for over three decades. The production halt, affecting all four Japanese factories, commenced on Tuesday and is anticipated to last until the end of January, impacting around 9,000 employees.
The move follows an announcement by Daihatsu last week revealing evidence of tampering with safety tests on approximately 64 vehicle models, including those under the Toyota brand. This safety scandal has deepened concerns at Toyota, with the company stating that it has “shaken the very foundations of the company.”
The suspension of both domestic and international vehicle shipments is part of Daihatsu’s response to the revelations. The scandal compounds Daihatsu’s previous admission in April of violating crash test standards on over 88,000 cars, predominantly under the Toyota brand in markets such as Malaysia and Thailand. Daihatsu disclosed improper modifications to the front seat door lining and failure to comply with regulatory requirements for certain side collision tests.
An independent third-party committee uncovered 174 additional instances of data manipulation, false statements, and improper alterations to vehicles for safety certification tests. The malpractice dates back to 1989, intensifying notably since 2014, according to the committee’s report released last Wednesday.
In a statement released on December 20, Toyota said that “in addition to a review of certification operations, a fundamental reform is needed to revitalize Daihatsu as a company,” adding that the process “will be an extremely significant task that cannot be accomplished overnight. It will require not only a review of management and business operations but also a review of the organization and structure, as well as a change in human resource development and awareness of each and every employee.”
Information for this story was found via CNN, Toyota, Daihatsu, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
