Japan demands auto industry probe as scandals rile Toyota units

By BLOOMBERG | 23 February 2024

TOKYO: Japan’s government called on its automotive industry to come clean after a series of investigations uncovered decades of fraudulent conduct at a pair of Toyota Motor Corp. affiliates.

Transport Minister Tatsuo Saito directed domestic carmakers to conduct internal probes for any misconduct, including attempts to skirt certification tests, and to report their findings by the end of April.

"These scandals have damaged trust in Japan’s safety regulations,” Sato said Thursday, adding that a committee will be established to re-examine Japan’s vehicle regulations.

"It’s regrettable, given it could lead to a crisis of faith in the country’s manufacturing industry.”

The ministry also issued a corrective order to Toyota Industries Ltd. for manipulating power output figures for a few of its diesel engines types.

Certification was revoked for three of its engine types after ministry officials conducted onsite inspections of the company’s offices, as well as those of Toyota and Hino Motors Ltd.

Daihatsu Motor Co., another Toyota unit, was given the same order last month following revelations that its vehicles had not been properly tested for collision safety.

On Tuesday, Daihatsu announced plans to resume production of three vehicle models in early March, while four models were slated to resume on Feb 26.

Daihatsu began compensating its suppliers and partners in mid-February, a Daihatsu spokesman told reporters Thursday evening.

"Bit by bit, we’re slowly regaining our ability to revive operations and meet customers needs,” the spokesman said.

Toyota tapped Masahiro Inoue on Feb 13 to replace Daihatsu CEO Soichiro Okudaira as the carmaker looks to rebuild trust in its truck-making affiliate and the rest of its group operations.

Daihatsu, which became a wholly-owned subsidiary of Toyota in 2016, was dragged into the limelight in December when an internal investigation revealed it had manipulated collision safety test results dating as far back as 1989.

The scandal forced the company, which produces light "kei” trucks popular among Japanese drivers, to compensate partners after suspending domestic production.

Barely a month later, a similar fate befell Toyota Industries after a probe found irregularities in its power output tests.

The Toyota group "needs to return to basics” to bounce back from a string of recent scandals, Toyota chairman Akio Toyoda told reporters on Jan 30.

In 2022, another Toyota affiliate, Hino, was caught falsifying emissions data.