Daihatsu, a subsidiary of the Toyota Motor Corporation, has recently faced a significant setback as it admitted to manipulating safety tests on 64 car models over the past three decades.

This revelation has prompted the closure of all four Daihatsu plants until the end of January, with the last closure occurring at the company’s Osaka headquarters on December 25.

The ramifications extend beyond Daihatsu’s operations, potentially tarnishing the reputation of its parent company, Toyota.

The safety scandal involves falsified test results on 64 models, 24 of which are sold under the Toyota brand.

The closures affect approximately 9,000 workers in Japan, raising concerns about the broader impact on Toyota’s global image.

Daihatsu’s Osaka plant shutdown follows closures in Oita, Shiga, and Kyoto prefectures.

The company made the announcement after a transport ministry investigation revealed the manipulation of safety tests.

Evidently, the pressure to maintain production momentum led to the falsification of test results.

While there is currently no indication that the actual products were unsafe, the discrepancy between tested components and those in the sold cars has become a major issue.

Daihatsu disclosed that it would collaborate with its primary suppliers to address the fallout from the scandal.

Additionally, the company expressed its willingness to assist smaller subcontractors, lacking compensation, in accessing support funds from Japan’s transport ministry.

During the production halt, Daihatsu plans to compensate 423 domestic suppliers with direct business relations.

Established in 1907, Daihatsu contributes around 1.1 million cars annually, constituting approximately 10% of Toyota’s overall vehicle sales of 10 million per year.

Motor industry analyst David Bailey highlighted the initial concerns in April, which revolved around falsified collision tests.

Subsequent investigations, including an independent commission by Toyota, uncovered further issues related to airbags and speed tests.

While there is no indication of the actual products being unsafe, the discrepancy in tested components and those in the sold cars has become a major point of contention.

This recalls previous incidents where Toyota’s reputation suffered, notably in 2009 due to a recall over floor mats and accelerator pedals, and in 2012, recalling over seven million vehicles worldwide for faulty window switches.

Bailey emphasized that Toyota underwent a significant transformation post-2009 recalls, shifting its focus to quality control.

However, this approach does not seem to have been uniformly applied to its subsidiary, Daihatsu.

The current scandal raises questions about whether the pressure for growth has influenced multiple automakers, drawing parallels to the Volkswagen emissions scandal in 2015, where the company was found to have violated the US Environmental Protection Act.

As Daihatsu grapples with the repercussions of the safety scandal, Toyota faces the challenge of mitigating the impact on its overall reputation.

The incident underscores the importance of stringent quality control measures across the automotive industry, with potential implications for other manufacturers facing similar growth pressures.

 

 

Last Updated: 27 December 2023