Why Toyota has halted shipments of 6 car models in some SE Asian countries?

Toyota Motor Co. has suspended shipments of six car models in certain Southeast Asian nations due to a safety scandal involving its subsidiary, Daihatsu Motor Co.

This picture shows a Daihatsu Motor sales office in Tokyo on December 22, 2023. (Photo by Kazuhiro NOGI / AFP)(AFP)

The affected models, including Veloz and Avanza, were developed in collaboration with Daihatsu.

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Daihatsu, specialising in small cars and trucks popular in Japan, is a unit of Toyota.

Shipments to Thailand, Indonesia, Malaysia, Vietnam, and Cambodia have been halted, comprising about 5 per cent of Toyota’s production in Asia. Despite this, the impact is not expected to be significant, and Toyota is collaborating with authorities to resume shipments.

The suspension follows a safety lapse revealed in an investigation, leading to Daihatsu’s suspension of all shipments and the halt of its Japan plants.

What is the Toyota scandal?

This decision comes after a safety investigation uncovered issues in 64 models, including nearly two dozen sold under Toyota’s brand.

Japanese transport ministry officials conducted an inspection of Toyota subsidiary Daihatsu on Thursday, a day after the announcement of the suspension of all shipments by the small car unit within and outside Japan.

Earlier this year, safety test irregularities prompted an independent panel investigation, exposing widespread and systematic problems at Osaka-based Daihatsu Motor Co. This incident adds to a series of safety or other violations found at least five of Japan’s major automakers in recent years.

Citing the panel’s results, Toyota Motor Corp. reported on Wednesday that the Daihatsu probe identified 174 new cases of irregularities in safety tests and other procedures across 25 test categories, in addition to previously reported issues.

What has Daihatsu said?

Daihatsu president Soichiro Okudaira apologised, acknowledging the breach of trust with customers and characterising the safety testing and procedural lapses as a neglect of safety certificates.

“We are sorry to have betrayed the trust of our customers,” said Okudaira.

The problem surfaced in April with Daihatsu reporting improper testing on door linings, followed by issues in side collision testing in May, including data falsifications and the use of unauthorised testing procedures.

The investigation revealed problems in 64 models and three vehicle engines, affecting models sold by Toyota, Mazda Motor Corp., and Subaru Corp. in Japan, as well as Toyota and Daihatsu models sold internationally.

How Toyota responded?

Toyota expressed “sincere apologies”.

“We believe in order to prevent a recurrence, in addition to a review of certification operations, a fundamental reform is needed to revitalise Daihatsu as a company,” Toyota said in a statement.

(Inputs from wires)

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