What is Japan’s vehicle testing scandal involving world’s leading manufacturers?

The ongoing vehicle testing scandal in Japan involves some of the world’s leading car manufacturers. The scandal revolves around irregularities and falsified data in vehicle safety and certification tests, affecting companies like Toyota, Mazda, Honda, Suzuki, and Yamaha.

Toyota Motor and Mazda Motor have temporarily suspended shipments or sales of certain vehicles after Japan’s transport ministry identified irregularities in their certification applications.

On Monday, the ministry reported finding irregularities in the certification applications for models from Toyota, Mazda, Honda Motor, Suzuki Motor, and Yamaha Motor. Consequently, it ordered Toyota, Mazda, and Yamaha to suspend shipments of some vehicles.

These developments mark an expansion of a safety test scandal among Japanese automakers. The ministry had previously asked automakers to review their vehicle certification applications following a safety test scandal at Toyota’s compact car unit, Daihatsu, which surfaced last year.

The Japanese ministry found that these companies had falsified or manipulated data in their safety tests and certification processes.

Toyota’s involvement

Toyota Motor Corp., the world’s largest automaker by volume, temporarily halted shipments and sales of three car models produced in Japan. The models affected include the Corolla Fielder, Corolla Axio, and Yaris Cross. A Toyota spokesperson stated that the company was still investigating issues related to vehicle fuel efficiency and emissions, and aimed to complete the inquiry by the end of June.

Chairman Akio Toyoda, addressing the media, apologised for the massive cheating on certification tests for seven vehicle models. He stated, “We sincerely apologise,” and bowed deeply at the news conference. He also suggested that some certification rules might be overly stringent but emphasised, “We are not a perfect company. But if we see anything wrong, we will take a step back and keep trying to correct it.”

Impact on other automakers

Mazda suspended shipments of its Roadster RF sports car and the Mazda2 hatchback after discovering that workers had modified engine control software test results. Mazda also found that crash tests of the Atenza and Axela models, which are no longer in production, had been tampered with by using a timer to set off airbags during frontal collision tests instead of an on-board sensor. Mazda’s statement read, “Incorrect engine control software was used in the tests.”

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Yamaha halted shipments of a sports motorcycle, while Honda admitted to wrongdoing in noise and output tests over a period of more than eight years, affecting around two dozen models no longer in production. Honda is also expected to hold a press conference later to address these issues.

How did this scandal emerge?

This scandal is a continuation of safety test issues that have plagued the Japanese automotive industry. Last year, a scandal involving Toyota’s compact car unit Daihatsu revealed rigged side-collision safety tests for 88,000 small cars, most sold as Toyotas. This led to the transport ministry ordering nearly 90 manufacturers to re-examine their testing procedures.

In December 2023, an internal probe of Daihatsu showed that most of its vehicles had not been properly tested for collision safety. Subsequently, Toyota suspended all engine shipments in January after an investigation revealed falsified power-output figures.

Toyota’s Chairman, Akio Toyoda, acknowledged, “The apparent unraveling of the testing systems at Toyota and its group companies is an embarrassment for an automaker that’s prided itself for decades on production finesse.”

What has the financial impact been?

The financial impact on these automakers has been significant. Toyota shares dropped as much as 2.4 per cent in Tokyo, closing down 1.8 per cent. Mazda shares fell more than 4 per cent, while Yamaha’s shares retreated by 2.1 per cent. Suzuki pared earlier gains. The broader Topix index saw a 0.9 per cent gain, highlighting the specific strain on the companies involved in the scandal.

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The reputational damage is equally severe. The findings signal a deepening crisis of trust for Japan’s carmakers. The transport ministry’s investigation is ongoing, with Toyota being the only company among the 17 still under investigation where issues have been uncovered. This scandal underscores the need for stricter oversight and more transparent testing procedures in the automotive industry.

What now?

Toyota, Mazda, and the other affected automakers are working to address these issues and restore trust. Toyota’s Shinji Miyamoto, overseeing customer satisfaction, mentioned that the company began looking into its own tests following problems at group companies.

Toyoda said the company may have been too eager to get the tests done and abbreviated them at a time when model varieties were burgeoning, reported AP.

The Japanese transport ministry plans to conduct an on-site inspection at Toyota’s headquarters, and the ongoing investigations will likely lead to further revelations and necessary reforms.

With inputs from agencies