With record-breaking annual sales of 11.2 million cars in 2023, Toyota Motors continued to be the best-selling carmaker in the world for a fourth year running, despite its chairman expressing regret on Tuesday over scandals involving three of its group firms.
The Japanese carmaker revealed a 7.2% increase in group sales worldwide in the previous year, which included revenues at truck division Hino Motors and small-car manufacturer Daihatsu. Concerns over certification test procedures for automobiles and engines have plagued those two divisions and affiliate Toyota Industries, raising concerns about governance that may damage the brand’s image for quality and safety worldwide.
“I would like to express my deepest apologies to our customers and stakeholders for the inconvenience and concern caused by the successive irregularities at Hino Motors, Daihatsu and Toyota Industries,” During a press conference, Toyota Chairman Akio Toyoda shared his vision for the 17-company Toyota group, which was started by his great-grandfather.
Employees were advised to concentrate on the following five attitudes: “Be honest and make things the right way.” The ceremony was moved up from its initial date of February 14, which was Sakichi Toyoda’s birthday. This was done in response to recent anomalies at Toyota’s group firms.
Over the past decade, Toyota consistently achieved global group sales exceeding 10 million cars annually, except for 2020 when the automotive industry faced challenges due to the COVID-19 pandemic. In a recent development, Volkswagen Group, Toyota’s German competitor and second-ranked globally, reported a 12% surge in sales, reaching 9.2 million vehicles in the previous year, indicating a post-pandemic recovery as supply chain bottlenecks eased.
Toyota’s parent-only brands, which encompass Lexus and the Toyota nameplate, achieved a milestone with record sales of 10.3 million units in 2023. Approximately one-third of these sales comprised gasoline-electric hybrids, while battery-electric vehicles constituted less than 1%. Despite this success, Toyota faces a slowdown in its group’s sales momentum following Daihatsu’s suspension of all car shipments last month due to safety crisis issues involving 64 models, with over two dozen sold under the Toyota brand.
In recent times, Daihatsu reported an approximate 8% decline in worldwide sales in December, coupled with a 25% reduction in global output to 121,000 vehicles. The Japanese Transport Ministry, in response to a safety concern involving diesel engines produced by Toyota Industries, lifted a prohibition on the export of ten cars manufactured by Daihatsu. An independent panel revealed on Monday that Toyota had halted shipments of several vehicles, including the Hilux truck and the Land Cruiser 300 SUV.
Further complicating matters, a separate commission investigating emissions issues at Hino Motors in 2022 uncovered that the truck division had been fabricating engine emissions data since 2003. This series of events adds a layer of complexity to Toyota’s operational challenges, requiring careful navigation of issues related to safety concerns, production suspensions, and emissions discrepancies within its group of companies.
Going forward, Toyota needs to show that everyone in the company is genuinely committed to openness, responsibility, and strong safety protocols. In addition to addressing the immediate problems, systemic changes must be put in place to stop future recurrences and rebuild trust. If they don’t, their hard-earned status as a world leader may be in jeopardy and their future sales success may suffer.
