Cheating scandal rocks Japanese car industry

Company News

by Glenn Dyer

Widespread cheating in the huge Japanese car industry has been exposed by a government investigation, with Toyota, Mazda, Hino, Daihatsu, and Honda caught up and named for breaches of various rules and safety tests.

For Toyota, it was especially humbling, being the world’s biggest car maker.

On Tuesday of last week, the company’s CEO Koji Sato outlined the giant’s plans to expand deeper into hybrid-style electric vehicles, downplaying the need for a full-fledged move into battery-powered vehicles.

It was seen as Toyota asserting its long-held belief in hybrids - regenerative and perhaps plug-ins, like Chinese companies (such as BYD) are doing, and ignoring BEVs as the future for the company.

This came after selling a record 11.1 million vehicles in the year to March 31 across all its brands, with over 3 million of those being regenerative hybrids.

But on Monday, shame fell as Toyota Chairman Akio Toyoda apologized for massive cheating on certification tests for seven vehicle models, as the automaker suspended production of three of them. The wide-ranging fraudulent testing at Japan’s top automaker (and others) involved the use of inadequate or outdated data in collision tests, incorrect testing of airbag inflation, and rear-seat damage in crashes. Engine power tests were also found to have been falsified.

This saw Toyota suspend production in the country of the Corolla Fielder, Corolla Axio, and Yaris Cross. The deceptive tests were also found on discontinued models. Toyota claimed the breaches do not affect the safety of the vehicles already on roads, which also include the Corolla subcompact and Lexus luxury vehicles.

Reuters and AP News reported that the chairman told the media, “We sincerely apologize.” Toyoda bowed deeply and held the position for several seconds, as is customary in Japan at news conferences where companies apologize for misbehavior.

The cheating emerged in a government investigation that started in January (and wrapped up quickly with findings damaging to the country's biggest company, which was surprising).

The government probe followed reports of certification problems starting to surface two years ago at Toyota group companies, truck group Hino Motors, and Daihatsu Motor, and Toyota Industries Corp, which makes machinery and auto parts.

Monday also saw Mazda Motor Corp report similar irregular certification testing and halt production of two models, the Roadster and Mazda 2. It claimed incorrect engine control software was used in the tests. Mazda also acknowledged violations on crash tests on three discontinued models. None of the violations affect the vehicles’ safety, the company claimed.

Honda also apologized Monday for improper tests, such as those on noise levels and torque (engine power), on a range of models. Honda said affected older models — the Accord, Odyssey, and Fit — are no longer in production. The safety of the vehicles was not affected, it also claimed.

Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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