Daihatsu, a 116-year-old brand in Osaka (Japan), announced on December 20 that it will suspend all production and distribution activities from December 20 in domestic and foreign markets after discovering that most of the company's car models were affected in the safety test fraud scandal.
Daihatsu is a subsidiary of Toyota Corporation.
Violations since 1989
Daihatsu’s misdeeds emerged in April after it was accused of cheating side-impact crash tests on 88,000 vehicles. The company reported the problem to regulators and halted sales of the affected models. But a subsequent independent third-party investigation revealed the scale of the scandal was far greater than first thought and has the potential to tarnish both Daihatsu and Toyota’s reputations for quality and safety.
Specifically, in addition to the violations in April and May related to the door component tests and side impact tests, the investigation committee also discovered abnormalities in 174 points in 25 other test categories. There are a total of 64 car models and 3 types of car engines involved in the scandal, including 22 car models and 1 type of engine sold under the Toyota brand, including the Avanza model manufactured and sold in Vietnam.
Daihatsu President Okudaira Soichiro bows in apology at a press conference in Tokyo on December 20.
The violations mainly occurred after 2014 but some cases date back to 1989. The company said it has not recorded any accidents related to the violations but said it is conducting a thorough technical verification.
Risk of heavy fines
On December 22, Daihatsu said it had resumed car distribution in Indonesia after local authorities confirmed the safety of its vehicles, as well as those produced by local units under the Toyota brand.
Daihatsu Chairman Okudaira Soichiro publicly apologized for the incident while Toyota also acknowledged the "extreme severity" of its subsidiary's negligence, which "shook the company's foundation as an automaker".
The investigation committee said that the violations were partly due to time pressure and the need to pass the tests on the first try to reduce the number of scrapped vehicles, thereby reducing costs. NHK quoted experts as saying that the pressure had increased since the company was fully taken over by Toyota in 2016 and increased its involvement in production for its parent company despite a shortage of manpower.
On December 21, the Japanese transport ministry visited Daihatsu's headquarters in Osaka Prefecture to collect evidence. A ministry official said the investigation will last until at least early 2024 and the ministry will consider penalties such as revoking licenses if necessary, according to Kyodo News. With the production halt date still unclear, Daihatsu has reportedly begun negotiating compensation with its 423 suppliers. Daihatsu topped the minicar sales market in Japan last fiscal year with a 33.4% market share.
Toyota VN temporarily stops distributing Avanza MT model
In Vietnam, in the past 5 years, Toyota VN (TMV) has distributed many car models directly manufactured by Daihatsu, or developed under the Toyota brand, such as Toyota Raize, Wigo, Avanza Premio, Veloz Cross... Most of these are imported from Indonesia and thousands of cars have been distributed to consumers in Vietnam.
On the afternoon of December 21, TMV issued a notice: "TMV has proactively suspended the delivery of all batches of vehicles related to Daihatsu to dealers, to confirm more specific information for the Vietnamese market. However, after investigating the details of the above abnormalities, TMV only stopped delivering 1 affected vehicle model in Vietnam, the Avanza Premio manual transmission (MT) version."
Ba Hung
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