Daihatsu pauses production over safety scandal

Toyota-owned carmaker Daihatsu has closed all four of its plants until the end of January, after admitting it had falsified safety tests.

Daihatsu admitted that it had been manipulating safety tests on 64 makes for three decades.

Its headquarters in Osaka, Japan was the last to close, on 25 December.

The scandal puts in jeopardy 9,000 workers in the country and could affect global car giant Toyota’s reputation.

Of the 64 models involved in the scandal, 24 are sold with Toyota branding.

The closure of its Osaka plant follows closures in its production lines in Oita, Shiga and Kyoto prefectures.

Daihatsu said on Wednesday that it had stopped shipments of all its vehicles after its latest admission, which followed a transport ministry investigation.

It seems test results were falsified because of pressure to keep production rolling.

The company said it would work with its main suppliers to address the fallout from the scandal, adding that it may also help its smaller subcontractors that do not receive compensation to access support funds from Japan’s transport ministry.

It also said that during the time plants are idle it would compensate 423 domestic suppliers with which it has direct business relations.

Established 1907, Daihatsu sells around 1.1 million cars per year, which make up around 10% of Toyota’s 10 million vehicle sales per year.

“This first started in April where the issue was about collision tests being falsified”, motor industry analyst David Bailey told the BBC’s World Service. “Then, an independent commission by Toyota found more issues including air bags and speed tests.

“There’s no suggestion at the moment that the actual products were unsafe, but what seems to have happened is that they tested a car with components in and then sold a car with different components in, so that’s become a major issue”.

Toyota’s reputation was damaged in 2009 by a recall over a fault with some floor mats and accelerator pedals, and in 2012 it recalled more than seven million vehicles worldwide, including some Yaris, Corolla and Camry models over faulty window switches.

The recalls led to a “fundamentally changed” Toyota, says Mr Bailey.

“It stopped growing so quickly, it focussed again on quality, it brought in outsiders to really check quality – yet that doesn’t seem to have applied to its subsidiary Daihatsu”, he said.

Many analysts are suggesting that the pressure to grow has affected many carmakers, citing the example of Volkswagen whose diesel vehicles were found to emit more emissions than advertised. In 2015, the US said VW had violated its Environmental Protection Act.