According to reports, on December 21, Toyota Motor Corp.'s stock price fell the most in more than 18 months after the offices of its subsidiary Daihatsu Motor were raided due to a safety scandal and Toyota recalled 1 million vehicles in the United States.
In early trading on December 21, Toyota Motor Corporation's stock price fell 5.6%, recording its largest single-day decline since May 2022. The stock fell 4.1% as of 9:31 a.m. Tokyo time.
On the morning of December 21, Japan’s Ministry of Land, Infrastructure, Transport and Tourism raided Daihatsu’s headquarters in Osaka. Previously, the automaker and supplier was found to have manipulated crash safety test results as far back as 1989, forcing the company to halt all shipments. It is reported that Daihatsu provides cars and parts to many major brands such as Toyota, Mazda Motor and Subaru. Therefore, Daihatsu's scandal may spread to other Japanese automobile companies.
Last year, Toyota Motor Corp.'s Hino Motors admitted to falsifying emissions data. For now, it will be a challenge for Toyota to rebuild trust in its oversight.
Analysts at Citi Research wrote in a report, "As voluntary internal inspections found only one case in which vehicle performance did not meet legal requirements, we believe the risk of a large-scale recall is low. However, if production is suspended for a long time, Toyota may suffer hundreds of billions of yen in operating profit losses."
Daihatsu Motor has been a wholly-owned subsidiary of Toyota since 2016 and accounts for approximately 4% of the Toyota Group's global vehicle sales. In fiscal 2022, Daihatsu produced more than 1.7 million vehicles globally, about half of which were manufactured in Japan. The company holds about 30% of the small car (kei) market, and both it and rival Suzuki Motor are leaders in the small car segment. In addition to small cars, Daihatsu's light vehicles and sedans are popular in Japan and Southeast Asia, including the GranMax pickup truck and van, as well as the Terios and Xenia passenger cars.
It's been a tough week for the world's largest automaker. On December 20, local time, Toyota also said that it would recall about 1 million vehicles in the United States due to problems with the passenger airbag.
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