A Japanese car manufacturer has temporarily shut down production after admitting to decades of fraudulent safety test results.
“We recognize the extreme gravity of these irregularities, their causes, and the recommendations to prevent their recurrence identified during the Independent Third-Party Committee’s investigations,” automaker Daihatsu wrote in a statement on the company’s website.
“We will not only review and revise certification application operations, but we will also make sweeping reforms to our corporate culture by making compliance the highest priority to prevent occurrences of similar events in the future,” the company said. “We will also make company-wide efforts to regain the trust of our stakeholders.”
Daihatsu, a Toyota subsidiary and one of Japan’s oldest combustion engine manufacturers founded in 1907, immediately shut down its factories and suspended all vehicle imports and exports.
The shutdown will impact thousands of auto parts makers and employees in what the Associated Press called a “blow” to local economies.
An independent investigation looked at 64 vehicle models and found 174 counts of irregularities in safety tests and other procedures, according to The Hill. Irregularities included tampering with safety tests, creating false information or fabricating test data in apparently widespread and systemic issues at the company.
Daihatsu halted all shipments while the investigation continued, and Japan’s Transport ministry began on-site inspections that looked into issues in the company dating back to 1989 – around the time that Daihatsu made its push into the U.S. market.
The company failed to make an impact in America as it faced overwhelming competition from rivals, including Toyota, which had a major interest of around 16.8% it bought in 1967.
Toyota expanded that interest to 33.4% in 1995 and then an outright controlling interest in 1998.
Daihatsu had a contract to produce small vehicles for Toyota, and some of its cars ended up rebranded as Toyota models and sold in the U.S., even after Daihatsu stopped selling directly to the American market. Such models include the Toyota Cayla, the Toyota Roomy and the Toyota Avanza, among other smaller models.
Subaru also sold some re-badged Daihatsu vehicles, including the latest generation of the Subaru Stella and the Subaru Chiffon.
Daihatsu is Toyota’s unit specializing in small cars and trucks that are popular in Japan. The company assembled some 870,000 vehicles at the four plants in fiscal 2022.
The company declined to say when production may resume, but media reports said production lines will remain closed at least through the end of January, The Associated Press reported.
Toyota North America did not respond to a FOX Business request for comment by time of publication.
The Associated Press contributed to this report.
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