Japanese Automakers Are in the Midst of a Domestic Scandal

Japanese manufacturers are in the middle of a minor crisis after the nation’s transport ministry noticed irregularities in the certification process of several domestic models before launching a formal investigation. Toyota, Mazda, Honda, Suzuki, and Yamaha Motor have all been faulted with submitting either incorrect or intentionally misleading information in regard to vehicle certifications.

The good news is that the entire issue presently seems to be limited to the Japanese domestic market. Problems likewise appear to be largely limited to simple clerical errors or failing to follow the exacting regulatory requirements instituted by the Japanese government. Some issues even appear to be the result of automakers going above and beyond the normal testing protocols and getting dinged by regulators because companies didn’t adhere to rules in the strictest sense possible.

For example, during the development of the Yaris Cross, Toyota said that regulations regarding how companies tested damage sustained to seatbacks when luggage moves during a crash. The government required updated luggage blocks and Toyota submitted information pertaining to the older units. Another instance saw the same company using a 1,800-kilogram barrier for crash testing when Japan requires a 1,100-kg unit. While the change technically resulted in a more stringent crash test, it’s not what the government demands.

Ministry officials have ordered Mazda, Toyota, and Yamaha to postpone shipments of certain vehicles. Toyota likewise kicked off the investigation after its Daihatsu subsidiary was found to be running afoul of Japan’s vehicle testing certification process at the start of 2024. This led to a widening investigation into the small vehicles (including Kei cars) produced by other manufacturers.

The formal, on-site investigations started this week and were centered on Toyota, which held a press conference in anticipation of the resulting media fallout. Toyota Chairman Akio Toyoda apologizes to customers, shareholders, and any enthusiast with a soft spot for the brand. "The point of this issue is that the vehicles were mass-produced and sold without going through the correct certification processes," he said, adding that

During the conference, the brand outlined several examples of how it had failed to adhere to government protocols. While some did seem like the brand could have been cutting corners, others were the result of Toyota going beyond the normal testing procedures in a manner that was out of line with the official regulations. Leadership was extremely apologetic during the conference. But there were undertones from Toyota that felt a little passive aggressive — as if the company felt it was being penalized for going beyond the status quo.

“As the person responsible for the Toyota Group, I would like to extend my sincere apologies to our customers, car enthusiasts, and all stakeholders for this issue, following Hino, Daihatsu, and Toyota Industries Corporation. I am truly sorry,” explained Mr. Toyoda. “All the [relevant] cases are related to certification. The certification system in Japan verifies whether a product meets the established standards mainly in the fields of safety and environment using measurement methods in accordance with rules.”

The manufacturer stated seven of its models had been faulted by the ministry for failing to properly obtain vehicle certifications. The three that are still in production include the Corolla Fielder, Corolla Axio, and Yaris Cross. The rest had already been discontinued.

If you’re interested in the finer details of how testing went sideways, Toyota provided loads of examples during its press conference. But you’ll have to decide whether the company failing to adhere to the strict testing guidelines of the Japanese government was the result of engineers botching the finer details of some paperwork, getting a little lazy, or attempting to go beyond Japanese regulations and then being faulted when it didn’t precisely adhere to the letter of the law.

Looking at some of the examples provided by the manufacturer, all three scenarios seem equally plausible and probably came into play on different occasions. But a few, most notably, engine output data looks as though it may have been intentionally falsified.

Interestingly, this seems to be something a lot of manufacturers did. Mazda was similarly faulted with covertly tweaking engine controlling software (perhaps in a bit to circumvent emissions). Suzuki, Honda, and Yamaha likewise reported falsified test results of their own.

There also appears to be some attempt to leverage the scandal as a way to oust Akio Toyoda as chairman. If you’re familiar with the management shake ups witnessed at Nissan starting in 2018, you’re likely aware of how ugly executive warfare can get inside Japan. In Nissan’s case, the government looked to have been weaponized specifically to help decide corporate leadership. While it’s far too early to assume anything like that about the current certification issue, the resulting media attention has been used to make the chairman look bad.

Reuters even reported that proxy advisory firms Institutional Shareholder Services and Glass Lewis have explicitly recommended that shareholders vote against re-electing Akio Toyoda as chairman at their next meeting.

The Japanese transport ministry will continue its investigation at Toyota before pivoting to other manufacturers. According to Kyodo News, roughly 1.7 million cars were “affected by Toyota’s misconduct.” Mazda is estimated to have certification irregularities in about 150,000 vehicles.

Honda reported a whopping 4.35 million vehicles, while Suzuki said it’s number would be closer to 26,000. However, both have stated that only discontinued models were impacted.

Meanwhile, Toyota has said it will continue its own internal investigation as it collaborates with the government. But it stated that all of its vehicles were safe to drive and simply out of compliance with certification requirements. The company also stated that North American products are held to different standards and protocols — suggesting that they will not be affected by any of the above.

We’ll be following this story as it evolves.

[Image: Toyota]

Become a TTAC insider. Get the latest news, features, TTAC takes, and everything else that gets to the truth about cars first by  subscribing to our newsletter.