Toyota Shares Plummet on Safety Scandal at Daihatsu, Recall of Vehicles

Thu Dec 21 2023
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TOKYO:  On Thursday, Toyota Motor’s shares plummeted due to a Japan transport ministry inspection of a subsidiary regarding long-standing safety concerns.

Simultaneously, the world’s leading automaker disclosed a recall of 1.1 million vehicles.

During morning trading, Japan’s largest automaker saw a 3.8% decline in its shares. This drop followed an announcement from Daihatsu Motor, a subsidiary of Toyota, revealing a suspension of vehicle shipments due to safety-inspection irregularities.

Daihatsu’s independent committee identified concerns across 64 models, nearly two dozen of which are under the Toyota brand. This investigation stemmed from Daihatsu’s admission in April of manipulating side-collision safety tests for around 88,000 small cars.

As of Wednesday, Daihatsu hasn’t determined when shipments will resume, anticipating a significant impact on its earnings. When approached by Reuters on Thursday, Daihatsu had no further comments. Japan’s transport ministry indicated potential administrative penalties, such as revoking production certification, pending the results of its inquiry into Daihatsu’s actions.

Chief cabinet secretary Yoshimasa Hayashi told reporters: “this is an extremely regrettable case that undermines the trust of automobile users and is a misconduct that affects the very foundation of the automobile certification system.”

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