Daihatsu Stops Global Car Deliveries After Safety Incident: Consequences and Facing Challenges

Global Vehicle Delivery Suspension

In a notable announcement on December 20, Daihatsu, a big name in the Japanese auto industry, announced to stop shipping all car models from their factories, including both domestic and international markets. international. This decision is the result of a safety scandal involving 64 car models, of which nearly 20 are sold under the Toyota brand.

Cause and Details of the Incident

The independent research department launched an investigation into Daihatsu after the company admitted in April to adjusting the inside of the vehicle’s doors to reduce the risk of collisions. This creates a sharp edge when the airbag deploys, which can cause injury to passengers. More than 88,000 Toyota Vios and Perodua Axia vehicles were involved in this fraudulent action.

Affecting Both Toyota and International Markets

Perodua, Daihatsu’s partner and holding a 25% stake, also faces the impact of this incident, especially for the Axia model developed on Daihatsu’s DNGA platform.

The incident not only affected Daihatsu’s reputation and quality, but also spread to some Mazda and Subaru models in the domestic market, as well as some Toyota and Daihatsu models in the international market, creating big challenge for the Japanese auto industry.

Toyota And The Opportunity To Recreate Daihatsu

Toyota, Daihatsu’s parent company, said “fundamental reform” is needed to help Daihatsu regenerate. They are also reviewing approved activities and cannot yet assess the financial impact of this scandal.

Face Serious Consequences

Daihatsu’s safety cheating scandal seems to be creating much bigger consequences than initially expected. It is likely that this incident will affect the reputation and safety of both major Japanese brands.

In this context, Toyota is taking the necessary steps to face the challenge and ensure that all necessary measures are taken to rectify this safety incident.

Japan’s Transport Minister said a site investigation could be carried out at Daihatsu’s headquarters in Osaka on December 21.

According to information from Daihatsu at the press conference, car deliveries to foreign markets may be suspended until the car is allowed by regulators to continue being sold.

“The situation is particularly serious,” Daihatsu president Soichiro Okudaira said, adding that any authorization the company received after the fraud could be revoked by law.

The fraud also included falsified reports about headrest impact tests and speed tests for certain vehicle models. The investigation found that fraud cases were especially common after 2014.

Makoto Kaiami, chairman of the third-party investigation committee, said the committee did not believe Toyota was responsible for the fraud, but that Daihatsu was trying to find a way to meet the expectations it set for itself.

After admitting fraud in April, the following month, Daihatsu said it had stopped selling the Toyota Raize and Daihatsu Rocky hybrid models when it found problems in testing with these two products.

Daihatsu produced 1.1 million vehicles in the first 10 months of this year, with nearly 40% of them at foreign factories, according to data from Toyota. The company sold about 660,000 cars worldwide in the same period and accounted for 7% of parent company Toyota’s sales.

On December 19, Toyota said the car models involved in the scandal include cars for the ASEAN market including Thailand, Indonesia, Malaysia, Cambodia and Vietnam, as well as Central and South America, with Mexico, Ecuador, Peru. , Chile, Bolivia and Uruguay.

Daihatsu is the latest safety scandal to affect the Toyota group in recent years.

An engine data scandal at the company’s truck subsidiary, Hino, in 2022 led to resignations and temporary layoffs of several management positions. In this case, Hino admitted to providing false data on emissions as well as fuel consumption to the government for three engine lines produced by the company.

Previously, in 2010, Toyota fell into the “accelerator crisis” when many American customers encountered a situation where the car accelerated suddenly and even after being repaired, the car still had the same situation.

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