Toyota shares slump on Daihatsu raid, US million-car recall
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Officials from Japan's Ministry of Land, Infrastructure, Transport and Tourism enter the Daihatsu Motor headquarters for inspection work in Ikeda, Japan, on Dec 21.
PHOTO: AFP
TOKYO – Toyota Motor shares slumped the most in more than 18 months on Dec 21 as subsidiary Daihatsu Motor’s offices were raided over a safety scandal and the automaker recalled one million cars in the US.
The world’s biggest automaker fell as much as 5.6 per cent in early trading, the biggest intra-day decline since May 2022.
The stock closed 4.03 per cent lower in Tokyo on Dec 21.
The transport ministry’s raid of Daihatsu’s Osaka headquarters on the morning of Dec 21 came after revelations that the automaker and supplier manipulated the results of collision safety tests dating as far back as 1989, forcing it to halt all shipments.
Daihatsu supplies cars and parts to a number of major brands, including Toyota, Mazda Motor and Subaru, which could cause the scandal to ripple through the rest of Japan’s auto industry.
For Toyota, rebuilding trust in its oversight will be a challenge, as it is the second time one of its major affiliates has been caught red-handed after Hino Motors admitted to falsifying emissions data in 2022.
“As voluntary in-house inspections detected only one case where vehicle performance did not meet the legal requirements, we think the risk of an extensive recall is low,” analysts at Citi Research wrote in a note.
“However, if production is suspended for a lengthy period, Toyota could suffer an operating profit hit of hundreds of billions of yen.”
It has been a tough week for the world’s biggest automaker.
Toyota recalled about a million cars sold in the United States at risk of faulty passenger-side airbags, it said on Dec 20.
Sensors in certain Toyota and Lexus brand sedans and sport utility vehicles could miscalculate passenger and prevent airbags from deploying when they should, the company said in a statement.
Daihatsu has been a wholly owned subsidiary of Toyota since 2016 and accounts for roughly 4 per cent of Toyota Group’s global vehicle sales.
Daihatsu produced more than 1.7 million vehicles worldwide in fiscal 2022, around half of which were made in Japan.
It holds a roughly 30 per cent market share for kei cars – pint-sized vehicles that have been snapped up for years by domestic customers – making it an industry leader along with rival Suzuki Motor.
Outside of kei cars, Daihatsu, which is based in Osaka, is known for its line-up of lightweight vehicles and sedans that are popular across Japan and South-east Asia, including the Gran Max pick-up vans and Terios and Xenia passenger vehicles. BLOOMBERG
