Toyota, Mazda halt vehicle shipments amid safety test scandal

Toyota and Mazda have suspended shipments of some vehicles after Japan's transport ministry found irregularities in their certification applications. This development widens the safety test scandal that has plagued Japanese automakers, including Honda, Suzuki, and Yamaha.

Irregularities in certification

The Japanese transport ministry uncovered that several automakers submitted incorrect or manipulated test data for vehicle certification. As a result, Toyota, Mazda, and Yamaha were ordered to halt shipments of certain vehicles. An on-site inspection is scheduled at Toyota's headquarters in Aichi Prefecture to further investigate the matter.

Add WION as a Preferred Source

A broader impact on the industry

The scandal's roots trace back to January, when the ministry requested automakers to review their certification applications following a similar issue at Toyota's Daihatsu unit. This scrutiny has now expanded, revealing more widespread irregularities across the industry. The ministry's findings have put a spotlight on the practices of these automakers, raising concerns about the integrity of vehicle certification processes.

Leadership under scrutiny

The timing of these revelations is particularly sensitive as Toyota approaches its annual general meeting. Influential proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis have recommended shareholders vote against re-electing Akio Toyoda as chairman. ISS's report highlighted the recurring certification irregularities within the Toyota Group as a significant concern.

Apologies and temporary halts

At a press conference, Akio Toyoda, grandson of the automaker's founder, apologised for the misconduct. He acknowledged that the cars did not undergo the correct certification process before being sold. Toyota has temporarily halted shipments and sales of three car models made in Japan: the Corolla Fielder, Corolla Axio, and Yaris Cross.

Toyoda stated, "As the person in charge of the Toyota Group, I sincerely apologise to our customers, car enthusiasts, and all stakeholders for this." He assured that there were no performance issues contravening laws and regulations, so customers do not need to stop using their vehicles.

Government reaction

Japan's top government spokesperson, Yoshimasa Hayashi, expressed regret over the misconduct, noting that it tarnishes the government's efforts to promote corporate reforms. The scandal has not only affected the reputation of the automakers but also brought into question the effectiveness of regulatory oversight.

Financial impact

The financial markets responded negatively to the news. Toyota's shares closed down 1.8%, underperforming a 0.9% gain in the broader Topix index. Mazda's shares fell by 3.3%, reflecting investor concerns about the broader implications of the scandal.

Specific issues at Mazda

Mazda has been found to have tampered with engine control software test results and crash tests for the Roadster RF sports car and Mazda2 hatchback. The company also discovered that crash tests for the discontinued Atenza and Axela models were manipulated using a timer to set off airbags during frontal collision tests, instead of the on-board sensor.

Yamaha and Honda also affected

Yamaha has halted shipments of a sports motorcycle due to similar irregularities. Honda reported that it found misconduct in noise and output tests over more than eight years on some two dozen models no longer in production. This prolonged period of non-compliance further underscores the need for stricter oversight and transparency in the certification process.

Continuing investigations

Toyota is still investigating issues related to vehicle fuel efficiency and emissions, with a target to complete the inquiry by the end of June. This ongoing investigation indicates that the full extent of the irregularities may not yet be known, and further repercussions could follow as more details emerge.

The widening safety test scandal involving Toyota, Mazda, and other Japanese automakers underscores significant flaws in the certification process. The impact of these irregularities is profound, affecting corporate reputations, financial markets, and consumer trust. As the industry grapples with the fallout, there is an urgent need for improved transparency and stricter regulatory oversight to prevent such issues in the future.

(Inputs from Reuters)