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Shares of Japanese auto giant Toyota plunged on Thursday as a rigged protection scandal spread at its Daihatsu subsidiary and after 1 million cars were recalled in the United States over airbag protection considerations.
Daihatsu said on Wednesday it would suspend domestic shipments and shipments of all its cars in light of an independent panel’s report revealing that the automaker had tampered with tests as early as 1989.
Toyota expressed its “sincere apologies” and pledged to carry out “fundamental reform” in light of the findings of the investigation into a safety scandal in April.
The probe “found new irregularities in 174 items within 25 test categories” in addition to wrongdoing previously detected in April and May involving door parts and side-collision tests, Toyota said after the report was released.
On Wednesday, Daihatsu submitted a report to the Ministry of Transport (it had already submitted it in May) saying that new irregularities had been detected in an internal investigation and announced the suspensions.
The Japanese visited the company’s headquarters on Thursday for an inspection.
“We have started an on-site inspection to check whether the report submitted through Daihatsu (Wednesday) is true and whether there are any other irregularities,” Nobuhito Kiuchi, a transport ministry official, told AFP.
“Before issuing administrative orders (as a sanction), we want to clarify the facts around this issue,” he said, noting that the on-site inspection will continue at least until early next year.
Footage from Japanese television stations showed more than a dozen officials entering Daihatsu’s headquarters in Ikeda, Osaka Prefecture.
The news comes after Toyota subsidiary truck and bus maker Hino Motor last year revealed a falsification of its emissions data.
Hours after the release of the Daihatsu report, Toyota announced a major recall of Toyota and Lexus cars in the United States, warning that there were considerations about airbag sensors located in the front passenger seats.
The cars come with some of the production giant’s popular Camry, Corolla, and Highlander lines.
These sensors “could have been manufactured incorrectly, causing a short circuit” and, as a result, “the airbag might not deploy as expected in certain collisions, increasing the risk of injury,” the company said in a statement. communiqué.
Shares in Toyota sank as much as 5.6 percent in Tokyo — the most in 18 months — before clawing back some of the losses later in the day.
Tatsuo Yoshida, an automotive analyst at Bloomberg Intelligence, told AFP that the recall would likely have a limited effect on the company, as the number of affected vehicles is small compared to the company’s production.
“Also, recalling cars to repair a defect is not necessarily a bad thing if it is well filed and executed, as vehicle recalls are a common occurrence in the automotive industry,” he added.
However, he added that the Daihatsu case could hurt Toyota financially and that reforms at the subsidiary could take time, as “this (safety) certification factor turns out to be deeply ingrained in the company’s culture. “
A change in leadership would be “a prerequisite for the reform of Daihatsu,” but “a hasty change in leadership design could alter the work of investigating the fact and preparing a recipe for reform,” he said.
The independent panel blamed Daihatsu’s misconduct on the lack of managers’ expertise and an opaque work environment.
In April, Daihatsu admitted to falsifying the crash effects of four of its models, which affected a total of 88,000 vehicles manufactured in Thailand and Malaysia in 2022 and 2023.
The report attributes those decades-long irregularities to “an excessively tight and inflexible progression schedule. “
Daihatsu workers were “exposed to intense stress to pass crash tests on their first attempt” in order to minimize the number of cars destroyed and thus “reduce costs,” said the committee’s chairman, Makoto Kaiami.
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