Toyota shares slide on safety scandal at Daihatsu, recall of vehicles

TOKYO: Toyota Motor shares slumped on Thursday as Japan’s transport ministry inspected a subsidiary over safety concerns dating back decades and as the world’s top-selling automaker separately also announced a recall of 1.1 million vehicles.
Shares in Japan’s biggest automaker were down 3.8% by the end of morning trading.
A day earlier, Toyota’s small-car unit Daihatsu Motor said it would halt shipments of all of its vehicles for an indefinite period after discovering more safety-inspection irregularities.
Daihatsu said that an independent committee had found issues involving 64 models, including almost two dozen sold under Toyota’s brand.
The panel had been investigating the unlisted car maker after it said in April that it had rigged side-collision safety tests carried out for 88,000 small cars.
Daihatsu said on Wednesday it did not know when it would resume shipments, but that the impact on its earnings would be substantial.
Daihatsu had nothing to add when contacted by Reuters on Thursday.
Japan’s transport ministry said it would consider administrative penalties against Daihatsu, including potentially revoking its production certification, depending on the outcome of its investigation.
Chief cabinet secretary Yoshimasa Hayashi told reporters: “this is an extremely regrettable case that undermines the trust of automobile users and is a misconduct that affects the very foundation of the automobile certification system.”
Toyota said on Wednesday that it would recall 1.12 million vehicles worldwide due to a fault as a short circuit in a sensor could cause air bags not to deploy as designed. The recall includes 1 million vehicles in the U.S.
Shares in parts supplier Aisin Corp, which manufactured the sensors in the air bags, were down 3.7% in morning trading.
Shares of Suzuki Motor, Daihatsu’s main rival in Japan’s minivehicle market, rose 2.2%, while Tokyo’s benchmark Nikkei average was down 1.5%.