Scandals are mounting for Japanese Automakers
Shares of Japanese automakers have seen significant declines following revelations by Japan’s Transport Ministry that false data was used in certifying certain car models. The issue came to light last Monday, impacting several major companies within the industry.
Toyota, Mazda, and Subaru join forces to slowly kill themselves due to investing in the wrong technology. pic.twitter.com/B1fHbbbM3A
— Trevor Scott 𝕏 (@Space_Taz) June 2, 2024
Toyota, the largest car manufacturer in Japan, experienced a substantial drop in its stock value, falling over 5.4% after the scandal was exposed on June 3. Over the course of last week, Toyota’s market value plummeted by 2.45 trillion Japanese yen (approximately $15.62 billion), although it began to show signs of recovery this Monday with a 1.7% rise in its shares.
Similarly, Mazda, the second-largest automaker in the country, saw its shares decrease by 7.7% during the same period, with a loss in market capitalization amounting to 80.33 billion yen. Other major automotive companies, including Honda, Suzuki, and Yamaha, also faced declines. Honda’s shares dropped by 5.75%, Yamaha Motor decreased by 2.2%, and Suzuki Motor slightly fell by 0.3%. However, on Monday, shares of these companies were observed to be trading higher, with Honda gaining 2.13% and Mazda also increasing by 1.7%.
The investigation by the Ministry of Land, Infrastructure, Transport, and Tourism uncovered that all five companies were involved in submitting either false test data or, in the cases of Toyota and Mazda, using falsified vehicles in crash tests. Following the disclosure of the investigation findings, Toyota announced a temporary halt in shipments and sales of three of its models currently produced in Japan, namely the Corolla Fielder, Corolla Axio, and Yaris Cross.
Toyota and Mazda both halted shipments of some vehicles as a safety test scandal in Japan widened https://t.co/LEH0SWrdAO pic.twitter.com/rgckmO1jgx
— Reuters Business (@ReutersBiz) June 4, 2024
In response to the scandal, Toyota’s chairman, Akio Toyoda, issued an apology, acknowledging that the testing methods used deviated from national standards for seven of its models. Mazda also announced the suspension of its Roadster RF and Mazda 2 models starting from May 30, although it stated that customers could continue using their vehicles.
Further action from the Transport Ministry includes plans for on-site inspections at the facilities of the implicated companies.
This regulatory scrutiny follows another related incident where Toyota’s subsidiary, Daihatsu, disclosed in December that it would halt shipments of all vehicles, both internationally and domestically, due to a safety scandal affecting about 64 models, including 22 under the Toyota brand. Daihatsu admitted in April of the previous year that it had manipulated safety tests for side collisions involving 88,000 small cars, predominantly sold as Toyota vehicles.
Major Points
- Japan’s Transport Ministry discovered fraudulent data used in vehicle certifications, affecting major automakers.
- Toyota, the largest car manufacturer in Japan, lost over $15 billion in market value following a 5.4% drop in its stock.
- Mazda, along with Honda, Suzuki, and Yamaha, also saw significant declines in stock prices due to the scandal.
- Toyota halted shipments and sales of three models, and both Toyota and Mazda suspended several models due to the misuse of testing methods.
- The ministry plans on-site inspections at these companies, which have all admitted to submitting false data or using incorrect testing vehicles.
Fallon Jacobson – Reprinted with permission of Whatfinger News
