Daihatsu Motor Cannot Escape Damage to Its Credibility; President Apologizes for ‘Serious Wrongdoing’ Over Safety Tests

The Yomiuri Shimbun

21:00 JST, January 17, 2024

The administrative punishment to be leveled against Daihatsu Motor Co. over its involvement in fraudulent safety tests will be the first such sanction to affect compact vehicles well known to the public.

The Land, Infrastructure, Transport and Tourism Ministry on Tuesday began procedures to revoke type certificates — which are necessary for carmakers to engage in mass-production — for three vehicle models made by Daihatsu. The ministry will hear opinions from Daihatsu about the revocation on Tuesday before taking action.

Daihatsu intends to seek to reacquire the certificates, but the ministry’s investigation has uncovered more irregularities, diminishing the prospect that it will be able to resume production. The automaker’s credibility will inevitably be damaged, impacting its dealers and business partners.

‘Serious wrongdoing’

“This is serious wrongdoing that undermines the national certification system, and we sincerely apologize for it,” Daihatsu President Soichiro Okudaira told reporters Tuesday evening at the transport ministry. “We will do our utmost to improve the situation.”

Okudaira acknowledged management’s responsibility, saying: “We failed to change our overcrowded, rigid work schedule. This environment and culture was fostered by management.”

Daihatsu will submit preventive measures to the ministry within a month, Okudaira said.

About 6,200 of the three truck models in question were sold domestically in January-November 2023. Although these trucks account for only a small percentage of Daihatsu’s annual domestic production — about 870,000 units in fiscal 2022 — they are mainly purchased by small and medium-sized companies or sole proprietors engaged in electrical work, delivery and other businesses.

“These models are driven on a daily basis for work purposes, and reliability is key,” a person involved with Daihatsu’s sales said. “If their type certificates are revoked, it will have a big impact.”

Fateful crisis

The fraud has damaged the reputations of Daihatsu’s parent company Toyota Motor Corp. and its supplier Mazda Motor Corp.

A Mazda spokesperson said: “It is truly regrettable that this fraud has affected us. We’ll discuss future measures with Daihatsu.”

Daihatsu will become the third automaker to have type certificates revoked, following Hino Motors Ltd. and Toyota Industries Corp. These firms were censured over engines used in trucks and buses for Hino and in forklifts for Toyota Industries.

Daihatsu, however, has many ordinary drivers among its users, and the impact could be more serious.

More irregularities have been found through the ministry’s investigation, and additional models may be subject to the punishment.

“If the revocation of certificates affects popular passenger car models, such as Tanto and Mira e:S, it could threaten Daihatsu’s survival,” said economic journalist Hisao Inoue.

Management reform

Toyota Motor will consider reviewing Daihatsu’s management structure, including a shakeup of its board members, in about a month’s time, Toyota President Koji Sato told reporters Tuesday in Tokyo.

“We take the matter very seriously and will work on drastic reforms to ensure that fraud will never occur again,” Sato said. “Mini vehicles are Daihatsu’s core. If the company was overburdened by expansion [in other areas], we need to reorganize our business.”

Given the recent string of misconduct within the group, Toyota Chairman Akio Toyoda is considering when to possibly speak on the issue, Sato said.