The Toyota Motor Corporation Board Chairman, Akio Toyoda, recently bowed in apology during a press conference in Tokyo on June 3, 2024. This came after Toyota, along with other Japanese automakers such as Honda, Mazda, Suzuki, and Yamaha, was found to have submitted false data for certification of certain car models. The scandal has had a significant impact on the stock prices of these companies, with Toyota losing 2.45 trillion Japanese yen ($15.62 billion) in market value last week alone.
The Ministry of Land, Infrastructure, Transport and Tourism in Japan conducted a wide-ranging inspection that revealed irregularities in certification applications by the automakers. This has caused a plunge in the share prices of these companies, with Toyota’s stock falling more than 5.4% last week and Mazda’s falling by 7.7%. However, shares of these companies are beginning to recover, with all five trading higher on Monday. Toyota’s shares were up by 1.7%, Honda gained 2.13%, and Mazda increased by 1.7%.
Toyota and Mazda have both announced temporary halts in shipments and sales of specific models that were found to have been tested using methods that differ from the national standards. Toyota will be suspending shipments of the Corolla Fielder, Corolla Axio, and Yaris Cross, while Mazda has suspended the Roadster RF and Mazda 2. Despite this, customers are still able to continue driving their cars. The transport ministry has also stated that it will conduct on-site inspections of the five companies where misconduct was reported.
This recent scandal is not the first instance of misconduct in the Japanese automotive industry. Toyota’s Daihatsu unit had previously halted shipments of all vehicles in December due to a safety scandal that found issues in 64 models, 22 of which were sold under the Toyota brand. Daihatsu admitted to rigging side-collision safety tests for 88,000 small cars, most of which were sold under the Toyota brand. This latest scandal involving falsified data for certification tests adds to the growing list of issues in the industry.
Overall, the Japanese automotive industry is facing a challenging time as these scandals have severely impacted the reputation and market value of some of the country’s largest automakers. The government and consumers will be closely monitoring the next steps that these companies take to address the issue and restore trust in their products. In the meantime, it will be essential for these companies to prioritize transparency and integrity in all aspects of their operations to regain the confidence of their stakeholders and customers.
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