Daihatsu Loses Certification for Three Cars After Safety Scandal

The Japanese government has revoked certification for three Daihatsu Motor Co. vehicles after an investigation found the Toyota Motor Corp. affiliate had been manipulating collision safety test results for decades.

Transport Minister Tetsuo Saito delivered an order of improvement to Daihatsu President Soichiro Okudaira on Tuesday, demanding the company take steps to prevent anything similar from happening again.

“Including any ill intentions, the situation is extremely regrettable,” Saito said.

Toyota’s Daihatsu Unit to Halt All Vehicle Shipments, in Widening Safety Scandal

The safety certification for three variations of the same car, including the Grand Max, Toyota’s TownAce and Mazda Motor Corp.’s Bongo, were revoked because test results had been tampered with to gain approval, according to the ministry.

Daihatsu was also ordered to recall two models — the Cast and Toyota Pixis Joy — after an additional 14 issues were discovered in December when the ministry raided Daihatsu’s headquarters in Osaka. This is the government’s first major order since then.

“This was expected, but it seems unlikely any vehicles besides these three will have their certifications revoked,” said Bloomberg Intelligence senior auto analyst Tatsuo Yoshida. The financial burden — of regaining certification, rebooting production and compensating thousands of partners — might be too much for Daihatsu, Yoshida said, in which case Toyota would have to step in.

The discovery in early 2023 that a half dozen models might be affected by manipulated test results ballooned into a full-blown scandal last month, when Daihatsu revealed that an internal probe found 174 irregularities across 64 cars dating back as far as 1989.

The Japanese car manufacturer and supplier had suspended domestic operations until the end of January but that deadline could shift as authorities take action, and the extent of the backlash begins to take shape.

“Rather than improving the carmaking process, the reduction of production time itself became the goal,” Toyota CEO Koji Sato told reporters Tuesday. The transport ministry ordered Daihatsu to put forth preventative measures in a month, at which point Toyota will announce a new structure for the affiliate moving forward, Sato said.

Daihatsu, which has been a wholly owned subsidiary of Toyota since 2016, is known for its lineup of kei cars and other lightweight vehicles popular across Japan and Southeast Asia.

Suspending shipments will affect vehicles produced in Japan and overseas, and not only at Toyota factories but possibly also at Mazda Motor Corp. and Subaru Corp., given that Daihatsu supplies parts and manufacturing services to a range of other automakers.

Photograph: The Daihatsu Motor Co. Photo credit: Kiyoshi Ota/Bloomberg