Home » today » Business » Daihatsu CEO confesses widespread fraud in auto crash safety testing

Daihatsu CEO confesses widespread fraud in auto crash safety testing


NOS Nieuws•vandaag, 17:36

  • Anoma van der Veere

    Correspondent Japan

  • Anoma van der Veere

    Correspondent Japan

“It is an extremely serious situation,” Daihatsu CEO Soichiro Okudaira said at a news conference. The Japanese automaker has committed widespread fraud in testing the crashworthiness of their cars. Initially it would concern a few models, but it has now emerged that the company has been committing fraud since 1989.

The Japanese government has restricted deliveries of Daihatsu cars, and the carmaker has halted production at its Japanese factories. It is a scandal that has rocked the global auto industry, and in a short time has caused immense damage to confidence in Japanese automakers.

Production stoppage can last months

It’s not a happy Christmas for the automaker: On Christmas Day, the company halted production at three factories, and assembly lines at the last factory in Osaka, which also serves as its headquarters, will be halted today. It’s a big blow: in total, these factories produce 920,000 vehicles per year. The production stop has been announced until the end of January, but it is unclear whether production will resume after that.

According to the government, the new crash safety tests will take months. Initially, the intention was that all models in question would be thoroughly tested before production and deliveries could restart, but the Japanese government is currently in consultation with Daihatsu about the possibility of testing the cars one by one so that the company can gradually recover. can resume his activities.

The consequences for European countries remain limited for the time being. The factories in Indonesia and Malaysia will continue to operate: they produce a total of 850,000 cars per year and can therefore absorb part of the blow.

Economic consequences

In the short term, the economic damage to the company is reflected in the sales figures. Daihatsu produces an average of 70,000 cars per month in its Japanese factories. This production has now completely stopped, while 60,000 orders are outstanding. The majority of these, approximately 48,000 cars, are already ready for delivery but will be placed in storage for the time being.

For the cars that are not yet finished, Daihatsu has indicated that it will accept cancellations and provide full refunds. Several dealers have now indicated that there are already customers who have canceled their orders.

In Japan, the automotive industry consists largely of small and medium-sized companies that produce specific parts. At Daihatsu, this concerns 8,136 companies with a total turnover of more than 14 billion euros. These companies are now stuck with increasing inventories, personnel costs and raw materials that have a limited shelf life. The automaker has indicated that it will compensate some suppliers, although it is not known how long this arrangement will last.

Arrangements have also been made for factory staff. The details of the agreement between the employees and Daihatsu have not been disclosed, but it is understood that permanent employees will remain on the payroll until the end of January.

However, the consequences of the production stop extend beyond the factory walls. The villages and municipalities where these facilities are located are largely dependent on car production. Staff live nearby, which means that housing, supermarkets and catering are dependent on continuous production. If the production stop continues for a long time, it could lead to the collapse of these local economies in the long term.

Damage to the image of Japanese cars

Daihatsu no longer supplies directly to Europe, but produces several dozen models that are sold under the Toyota brand, the automaker’s parent company. These are also sold outside Japan. For Toyota it seems like an accumulation of scandals. Last year it became controversial when it emerged that subsidiary Hino admitted to falsifying data about their engines.

It is unclear how Daihatsu was able to get away with the fraud for so long. The head of Japan’s cabinet speaks of “an extremely regrettable matter that damages the confidence of car users in the industry.”

There is a chance that the damage to Daihatsu will become even greater. If crash tests reveal unsafe models, large-scale recalls will have to take place for the millions of Daihatsu cars on the road.

2023-12-26 16:36:35
#Largescale #fraud #car #manufacturer #Daihatsu #production #halted

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.