by Tessa Salazar
There’s no doubt in anyone’s mind that Daihatsu, known throughout Japan and beyond as the maker of the most compact of “kei” cars, is in big trouble.
Not that Daihatsu committed a recent, innocent, and minor mistake. It’s much worse: It’s not recent, it’s not minor, and it’s certainly not innocent. Apparently, it has been found, after an independent panel investigation, that most of Daihatsu’s cars (involving 64 models) haven’t been properly tested for collision safety. Worse, it was found that the carmaker manipulated the results of these crash tests dating to as far back as 1989. By golly wow, that’s 34 years long.
It also means that Daihatsu was already committing such shenanigans when the Toyota Group acquired the brand as a wholly owned subsidiary in 2016.
In an announcement on its website Daihatsu.com dated April 28, 2023, Daihatsu confirmed that it committed “procedural irregularity in approval application for side collision tests for vehicles developed by Daihatsu destined for overseas markets…Daihatsu has confirmed that in the side collision tests of the following vehicles, the inside lining of the front seat door was improperly modified, and that there was a violation of the side collision test procedures and methods stipulated by regulations.”
So, Toyota, the world’s most prolific carmaker, has no choice but to provide support to its beleaguered subsidiary and scrape any semblance of a silver lining from this scandal. Bloomberg reported last Dec. 28 that Toyota Motor Corp (TMC) is prepared to help Daihatsu pay for the overwhelming damages incurred. Earlier that week, Daihatsu promised to compensate the companies it directly supplies.
Daihatsu and TMC are facing big-time losses as a result of this scandal. Nikkei Asia reported that “Daihatsu Motor could suffer over 100 billion yen ($700 million) in losses stemming from the safety test scandal, as the Toyota Motor unit faces a factory shutdown and compensation to suppliers.”
The report added that Daihatsu has halted all production in Japan with no timeline for a restart, although most shipments in Indonesia and Malaysia have resumed. One silver lining, at least for us here in the Philippines, is that none of the rebadged Daihatsu models of Toyota Motor Philippines (the Wigo, Rush, Avanza, Veloz, and Raize) have been included in the scandal.
AP News reported last Dec. 26 that the stoppage is expected to affect thousands of auto parts makers and their employees in a potential blow to local economies.
Despite the gravity of the scandal, TMC is standing by its subsidiary. “Toyota is ready to provide its full support should Daihatsu ask for it,” chief communication officer Jun Nagata was quoted by Bloomberg as telling reporters Thursday.
This support, however, is given with a heavy heart.
I personally witnessed TMC chair Akio Toyoda’s unhappiness with the whole Daihatsu situation. I was at the Chang International Circuit, covering the Idemitsu Super Endurance Southeast Asia Trophy 2023 on Dec. 22 (wherein three of TMC’s racing cars were either hybrid or powered by carbon-neutral fuels), and Toyoda was on hand during a break in the race answering questions from Asian journalists. Needless to say, several of the questions fielded to him were about the Daihatsu scandal, and the man wasn’t his usual smiling self, perhaps the stresses of endurance racing (he was there as Morizo, racing for the TMC team) and the longstanding shortcomings of Daihatsu taking their toll on the 67-year-old executive.
But Toyoda has been through much worse. It can be recalled that it was he himself who attended that historic hearing in the United States Congress in February 2010, enduring the grilling from the most powerful people of the world’s most powerful nation, taking the blame for the safety issues involving up to 9 million Toyota vehicles that were recalled in the United States and worldwide due to the risk of unintended acceleration, and finally issuing a tearful apology to the public.
Now we see Toyoda once more apologizing to the masses. On the Global Toyota online newsroom, this statement from Toyoda was recently posted:
“Daihatsu Motor Co Ltd’s wrongdoing is a matter that concerns safety, which is the most important aspect of vehicles. We consider this an absolutely unacceptable act that betrays the trust of our customers. We would like to sincerely apologize to our customers around the world and all related parties for the inconvenience and concern this has caused.
“Since this problem occurred with a Toyota brand passenger car, we believe that the problem is not limited to Daihatsu. We will begin by conducting a detailed investigation and thoroughly collecting facts to understand the situation, determine the true cause, and work diligently to prevent a recurrence. We will also inform the public in a timely manner regarding the facts we learn through our investigations.
“I personally promised our customers that Toyota would not run away, lie, or distort the truth during the recall crisis in 2009. Nevertheless, we find it to be a serious matter that such a problem has occurred at one of our group companies.
“As the top executive officer, President Sato will take responsibility for improving the car manufacturing operations of Toyota and the group companies, while I, as the Chairman of the Board and with my recall issue experience, will lead initiatives for governance and compliance. The Toyota Group as a whole will do its utmost to regain the trust of our customers as soon as possible.”
These two public apologies must have been on Toyoda’s mind when he shared his new year video message via Toyota Times Global on YouTube on Jan. 3, 2024, an excerpt of which shows Toyoda saying: “I’m reminded of the Chinese proverb, ‘the taller you grow, the deeper you bow,’ and I think we should all take this to heart.”
Daihatsu is in for a long, tough road to recovery after this scandal is resolved. The company’s origins can be traced way back to 1907, when the Hatsudoki Seizo Company Ltd was established in Osaka to begin domestic production of intake engines, solidifying its foothold in history as Japan’s oldest automobile manufacturer. Its long history has been generally untainted, but now comes this anomaly that has been ongoing for all of 34 years. The direct effects of these safety manipulations on the end users would now be impossible to pinpoint or quantify. Suffice to say that public trust, and quite likely future sales, have sustained the biggest damage.
It’ll surely take more than a public apology from the very top of the automotive food chain for Daihatsu to fulfill at least one of the five main principles of TMC founder Sakichi Toyoda: “Always be faithful to your duties, thereby contributing to the company and to the overall good.”