Daihatsu Motor Co. has now announced a suspension of its operations throughout January. This decision comes in the wake of a safety scandal that has raised serious concerns about the company’s compliance with collision safety standards.
The Unfolding of the Crisis
The crisis at Daihatsu unfolded following an investigation that revealed a disturbing pattern of safety test manipulation dating back to 1989. A third-party investigation, initiated in April, brought to light that 174 issues had been identified across 64 models, including some under the Toyota brand.
Central to this investigation is the discovery that the airbag control units used during crash tests differed from those installed in vehicles sold to the public. While subsequent tests showed these units met industry standards, concerns remain, particularly with the side-collision test results of the Daihatsu Cast and Toyota Pixis models, which may not comply with legal requirements.
The Scope of the Scandal
The scope of the scandal extends beyond Daihatsu and Toyota, implicating a range of vehicles from the 1980s to the present. An investigation in Japan revealed that production cars built for sale were fitted with different airbag control units compared to their crash-test counterparts. Additionally, false reports on headrest impact tests and test speeds for some models were identified, with irregularities dating back as far as 1989.
The scale of the issue is daunting. The irregularities in safety testing led to a recall of 1 million cars in the U.S., affecting not only Daihatsu but also other brands. Production is expected to remain suspended until at least the end of next month, leaving all four vehicle assembly factories offline.
This suspension includes Daihatsu’s popular lineup of kei cars and other lightweight vehicles, which are especially popular in Japan and Southeast Asia.
Impact Across the Industry
The decision to suspend Daihatsu’s operations has far-reaching implications. It affects not only vehicles produced in Japan and overseas but also extends to other major automakers. Daihatsu, known for its parts and manufacturing services, collaborates with companies like Mazda Motor Corp. and Subaru Corp.
This suspension, therefore, has the potential to disrupt a wide network of automotive production. Hence Daihatsu has pledged to compensate all 423 companies it directly supplies, based on past business volumes.
In response to the scandal, Toyota Motor Co. has halted shipments of six car models in several Southeast Asian countries, including Thailand, Indonesia, Malaysia, Vietnam, and Cambodia. The models affected, partly developed by Daihatsu, include the Veloz and Avanza.
Damage Control
The Japanese government has responded with seriousness, with Japan’s Chief Cabinet Secretary urging Daihatsu officials to fully explain the situation. The nation’s transport ministry has initiated on-site inspections at Daihatsu’s Osaka headquarters. This scandal has not only damaged the trust of car owners but has also shaken the foundation of the automobile certification system in Japan.
In an effort to mitigate the impact of the scandal and manage the crisis, Daihatsu has resumed production of Perodua brand cars in joint ventures with a Malaysian automaker and shipments from its Indonesian subsidiary.
These steps indicate the company’s active effort to address the situation. However, Daihatsu now faces the daunting challenge of regaining trust and restoring its market position, even as it continues to struggle with the consequences of the safety scandal.
