Toyota Motor’s Daihatsu has been allegedly forging safety results for 30 years, suspends production indefinitely

Daihatsu, under Toyota Motor Corp, has ceased production indefinitely in its four Japanese factories. This follows a recent suspension of vehicle shipments globally due to the discovery of flawed safety testing. The Japanese government is looking into allegations that the company falsely passed safety tests on certain car models for over 30 years.

Production stopped in plants across Shiga, Kyoto, Oita, and Daihatsu's Osaka headquarters. The exact date for resuming operations remains undisclosed. Speculations suggest a halt at least through January.

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This shutdown impacts thousands in the auto parts sector, potentially harming local economies. Daihatsu is renowned for small cars and trucks. It produced about 8,70,000 vehicles last fiscal year, as per PTI. These factories are part of a vast network, involving more than 8,000 companies.

The scandal surfaced in April, with Daihatsu admitting to inappropriate testing on door linings. Further irregularities in side collision tests emerged in May. In total, 174 new misconduct cases in 25 test categories were uncovered. This issue extends to Toyota, Mazda and Subaru models in Japan, and Daihatsu and Toyota vehicles internationally.

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Daihatsu President Soichiro Okudaira attributed these malpractices to pressure on workers, citing unrealistic development deadlines. The safety test scandal is not isolated to Daihatsu; other major Japanese automakers have faced similar issues recently.

Impact on economy and employment

As per estimates, Daihatsu is likely to suffer losses worth over 100 billion Yen ( ₹5,893 crore), Reuters reported. The company has said it will negotiate individually with suppliers about the compensation for the income loss due to the suspension of production. The automobile company is expected to face penalties like revocation of certification required for mass production.

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The halt in Daihatsu's production could significantly impact the Japanese automotive industry. Concerns are rising about its effects on company earnings, employment stability and regional economies.

Daihatsu plans to pay its suppliers to help them cope with the halt in production. About 8,300 companies are in their supply chain, according to Teikoku Databank.

(With agency inputs)