Daihatsu Executives to Resign Following Safety Test Scandal

Toyota Motor Corporation announced a significant shake-up at its small-car unit, Daihatsu Motor Co., following the discovery of misconduct involving rigged safety tests. In a decisive action reflective of its commitment to regulatory compliance and customer safety, Toyota revealed that both Soichiro Okudaira, the president of Daihatsu, and Sunao Matsubayashi, the company’s chair, will be leaving their positions.

The revelation of falsified collision safety-test certifications has cast a shadow over the reputation of Daihatsu, which has been under the complete ownership of Toyota since 2016. The unfolding events have led to a swift change in leadership, with Toyota nominating Masahiro Inoue, currently overseeing Toyota's operations in Latin America and the Caribbean, to assume the role of president at Daihatsu starting March 1.

Soichiro Okudaira, a seasoned executive with almost four decades of service at Toyota, was appointed president of Daihatsu in 2017. His tenure was marked by the integration of Daihatsu as a fully-fledged Toyota subsidiary, with a focus on compact car expertise. Unfortunately, the recent scandal has precipitated his early departure from the helm of Daihatsu, underlining the gravity of the situation and Toyota's intolerance for lapses in ethical standards.

Sunao Matsubayashi's departure represents another significant loss for the Daihatsu leadership team. Toyota's decision not to replace the outgoing chair speaks volumes about the restructuring plans that may follow in the wake of this scandal.

This incident has broader implications for Daihatsu's role in industry partnerships, particularly within the Commercial Japan Partnership Technologies (CJPT), a commercial vehicle collaboration. In light of the misconduct, Daihatsu will be extracted from the CJPT, and its 10% equity stake will be reallocated to Toyota. This move underscores the severity of the transgression and Toyota's dedication to reestablishing trust and upholding standards across its operations and affiliations.

As Daihatsu navigates through this challenging period of executive turnover and recalibrated business relations, Toyota is likely to institute rigorous oversight and compliance measures to prevent future transgressions. This organizational crisis also serves as a cautionary tale for the automotive industry at large, where adherence to safety standards and regulatory requirements is not only a legal obligation but a fundamental aspect of consumer trust and corporate integrity.