Toyota had a challenging Wednesday as it faced multiple setbacks. One of its subsidiaries, Daihatsu, suspended worldwide shipments due to a safety-related investigation. Additionally, the company had to recall 1 million vehicles in the U.S. because of airbag issues.
In April, Daihatsu admitted to manipulating side-collision safety tests for vehicles primarily supplied to Toyota. This disclosure prompted an independent investigation that uncovered 174 safety irregularities in 64 models, including those delivered to Toyota, Mazda, and Subaru. On Wednesday, Daihatsu halted sales of all currently produced models developed by them, both in Japan and globally.
The report revealed irregularities dating back to 1989 but noted an increase in problems from 2014 onwards. These problems included falsified test results and manipulated data, which the report attributed to “tight and rigid development schedules.”
On Thursday, Japan’s transport ministry conducted a raid on Daihatsu’s headquarters in Osaka after the company confirmed the presence of falsified data.
Daihatsu’s roots can be traced back to the early 1900s. It began manufacturing vehicles for other brands in 1969, including Toyota. Since then, it has expanded its production to include other companies like Subaru, specializing in smaller vehicles for the Japanese, Southeast Asian, and Latin American markets.
In a statement released on Wednesday, Toyota acknowledged increasing the number of OEM vehicles sourced from manufacturers like Daihatsu and admitted that this may have exerted pressure on its subsidiary. Toyota claimed to be “unaware of the situation with the company’s certification operations” and pledged to revitalize Daihatsu, although it cautioned that the process would take time.
As the world’s top automaker in terms of vehicles sold, Toyota sold 10.5 million vehicles in 2022, significantly surpassing the 8.3 million sold by the Volkswagen Group. Daihatsu and Hino Motors, another Toyota subsidiary, manufactured 909,000 vehicles sold by Toyota.
Hino Motors has also faced trouble. Last year, the subsidiary, which produces trucks and buses, admitted to falsifying emissions data for certain engines dating back to 2003. This scandal affected over 640,000 vehicles and resulted in a production halt.
Faulty airbags
Furthermore, on Wednesday, Toyota announced a recall of 1 million cars in the U.S., covering Toyota and Lexus models from 2020 to 2022. According to Toyota, sensors in the front passenger seat may fail to accurately assess a passenger’s weight, potentially causing the airbag to malfunction in certain situations.
Toyota will notify affected customers by February.
This is not Toyota’s first encounter with airbag issues. In 2014, Toyota, along with several other automakers, issued a global recall of millions of cars due to problems with Takata-manufactured airbags. By the end of 2022, it was estimated that carmakers had recalled 42 million cars in the U.S. alone. These airbags had the potential to explode forcefully, releasing shrapnel into the passenger compartments, resulting in over 30 deaths and hundreds of injuries worldwide. Recalls related to these airbags are still ongoing.
Then, in January 2020, Toyota recalled 3.4 million vehicles worldwide due to an electronic fault that prevented airbags from deploying.
Following news of the recall and Daihatsu’s falsified data, Toyota shares dropped 4% in Tokyo trading on Thursday.
