Starting from December 20, 2023, Daihatsu, a subsidiary brand of the Toyota group, has ceased production of cars due to a safety testing scandal. The closure of its factories and compensation of financial losses to suppliers could result in damages of over 100 billion yen (approximately 700 million USD) for the Japanese brand, according to estimates from Nikkei Asia.
As of now, Daihatsu hasn’t announced a timeline for the resumption of car assembly lines in Japan. The closure of its factory was initially expected to last until the end of January next year. However, production and distribution processes in Indonesia and Malaysia have already been restored.
On top of losing domestic market sales in Japan, Daihatsu is also in negotiations with accessory suppliers regarding compensation for lost revenue. The expected amount of compensation for these suppliers is considerable.
Furthermore, Daihatsu incurs significant costs for investigations and additional safety tests. The Japanese Ministry of Transport has launched an investigation into Daihatsu and mandated the company to halt car manufacturing until the vehicles are certified as safe. This investigation process could take several months, resulting in substantial damage. Additionally, Daihatsu may face penalties for the safety testing scandal.
In the financial year 2022, from April 2022 to March 2023, Daihatsu achieved operating profits of 141.8 billion yen (approximately 1.005 trillion USD), while net profit reached 102.2 billion yen (724.6 million USD). With this scandal, Daihatsu might experience its biggest loss in the past 30 years.
As previously reported, on December 20, 2023, Daihatsu received the investigation results from an independent committee regarding irregularities in the brand’s vehicle certification procedures. The investigation covered 64 car models currently produced and developed by Daihatsu, including those under the Daihatsu, Toyota, Mazda, and Subaru brands.
Following the investigation, the independent committee and Daihatsu/Toyota held separate press conferences to address the matter. Daihatsu also announced the temporary suspension of production and shipment of all its car models worldwide. The affected car models include those intended for Southeast Asian markets such as Vietnam, Thailand, Indonesia, Malaysia, and Cambodia. Moreover, car models in Central and South America, such as Mexico, Ecuador, Peru, Chile, Bolivia, and Uruguay, are also affected.
In Vietnam, only one car model is affected by Daihatsu’s scandal, the Avanza Premio. On December 21, 2023, Toyota Vietnam also announced the temporary suspension of deliveries for the manual transmission version of the Avanza Premio. However, Toyota Vietnam clarified that no recalls will be conducted for this model as the issue only pertains to emission and fuel consumption tests, not safety testing.
“In Vietnam, the Avanza Premio models adhere to testing regulations and are certified to meet the standards imposed by Vietnam’s regulations. Toyota Vietnam affirms that customers currently using these models can continue to utilize their vehicles without any issues, and no product recalls will be conducted as there have been no product defects identified,” responded Toyota Vietnam on its official fan page.
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