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Toyota-Owned Daihatsu Suspends Production Until January End Over Safety Test Fraud

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(CTN News) – Daihatsu, a car manufacturer owned by Toyota, has taken the unprecedented step of temporarily shutting down all four of its production plants until the end of January.

This drastic measure follows the company’s admission of engaging in fraudulent practices related to safety tests spanning three decades.

The scandal involves the manipulation of safety tests for 64 different car models, jeopardizing the jobs of approximately 9,000 workers in Japan and potentially tarnishing the global reputation of the automotive giant Toyota.

The final closure of Daihatsu’s headquarters in Osaka on December 25 marked the culmination of plant shutdowns in Oita, Shiga, and Kyoto prefectures. The implicated models include 24 that are marketed under the Toyota brand.

The company’s acknowledgment of falsifying test results came after a thorough investigation by the transport ministry.

Daihatsu disclosed that the pressure to maintain production momentum had led to the falsification of test results.

In response to the crisis, the company announced a cessation of vehicle shipments and expressed its commitment to collaborate with primary suppliers to manage the aftermath of the scandal.

Additionally, it pledged assistance to smaller subcontractors lacking compensation by facilitating their access to support funds from Japan’s transport ministry.

Daihatsu’s Compensation Plan for Suppliers Amid Plant Idle Period

During the idle period of its plants, Daihatsu intends to compensate 423 domestic suppliers with whom it has direct business relationships.

The ripple effect of this controversy could be significant, considering that Daihatsu contributes around 1.1 million cars annually, constituting approximately 10% of Toyota’s total vehicle sales.

Motor industry analyst David Bailey highlighted that the falsification issue initially surfaced in April, focusing on manipulated collision tests. Subsequent investigations, including an independent commission by Toyota, revealed further problems related to airbags and speed tests.

While there is currently no indication that the affected products are inherently unsafe, the discrepancy between tested and delivered components has emerged as a major concern.

Toyota, itself no stranger to recalls and reputation challenges, suffered damage to its image in 2009 due to a recall involving faulty floor mats and accelerator pedals.

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Toyota’s 2012 Recall and Quality Assurance Response

In 2012, another recall affected over seven million vehicles globally, including certain Yaris, Corolla, and Camry models due to faulty window switches.

Analysts observe that Toyota’s response to these incidents led to a renewed focus on quality assurance, although it appears that these measures may not have been uniformly applied to its subsidiary, Daihatsu.

The Daihatsu scandal raises broader questions about the growth pressures faced by car manufacturers, drawing parallels to other industry challenges, such as Volkswagen’s violation of the Environmental Protection Act in 2015, when its diesel vehicles were found to emit more emissions than advertised.

As the automotive industry grapples with the consequences of such controversies, the focus on quality control and ethical practices becomes even more critical.

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