Japanese authorities inspect Toyota HQ over certification irregularities (updated)
04/06/2024 06:06
(Writes through with analysts' comments)
By Daniel Leussink
TOKYO, June 4 (Reuters) - Japanese transport ministry
officials launched an on-site investigation at Toyota Motor's
7203.T headquarters on Tuesday after irregularities were found
in its applications to certify certain vehicle models.
The widening fallout over certification tests stems from a
safety test scandal at Toyota's Daihatsu compact car unit and
has also ensnared other Japanese automakers after the ministry
ordered industry-wide checks of certification practices.
Toyota, Mazda 7261.T , Honda 7267.T , Suzuki 7269.T and
Yamaha Motor 7272.T said they had submitted either flawed or
manipulated data when applying for certification of vehicles.
Toyota, Japan's largest automaker, was the first to undergo
an inspection which was flagged by the ministry on Monday. The
other four automakers will also be inspected, a ministry
official said.
While some analysts noted that Toyota will be under more
pressure to strengthen governance, others said the impact on
sales is likely to be limited given that it is only suspending
sales of three models and so many of its domestic rivals also
fell short of ministry standards.
"When it comes to actual sales in (the) Japan market, the
damage will be manageable or quite small, because consumers
basically have no alternatives in Japan," said James Hong, head
of mobility research at Macquarie.
Hong added that Toyota Chairman Akio Toyoda is likely to
come under more pressure. Proxy advisory firms Institutional
Shareholder Services and Glass Lewis have recommended
shareholders vote against re-electing Toyoda at an upcoming
annual general meeting. But while his approval rating could fall
further, he is not expected to lose his seat.
Both Toyota and Mazda suspended sales of some models but
said there were no performance issues that violated regulations
and customers did not need to stop using their cars.
Examples of wrongdoing that Toyota gave included measuring
collision damage on one side of a model's hood while it was
required to do so on both sides and conducting some tests under
more strict conditions than those set out by the ministry but
which did not meet government requirements.
Safety test scandals have previously caused production
stoppages at Toyota group companies, and the latest revelations
could disrupt production at subcontractors and smaller companies
in Japan's vast automotive supply chain.
That could lead to a knock-on effect on Japan's economy,
said Toshihiro Nagahama, executive chief economist at Dai-ichi
Life Research Institute.
"The impact can't be ignored," he said, adding it could hurt
Japan's economic growth this quarter if subcontractors suffered
disruptions and consumers became more hesitant to buy cars.
Shares in Toyota, Honda and Mazda have lost almost 3% since
Friday's close while Yamaha has fallen 1.3% and Suzuki's shares
are flat.
(Reporting by Daniel Leussink and Maki Shiraki; Additional
reporting by Kentaro Sugiyama; Editing by David Dolan and Edwina
Gibbs)
((daniel.leussink@thomsonreuters.com; Twitter:
@danielleussink;))