Toyota-owned automaker halts Japan production after admitting it tampered with safety tests for 30 years

By Michelle Toh, Hanako Montgomery and Francesca Annio, CNN

Hong Kong/Tokyo (CNN) — Daihatsu, the Japanese automaker owned by Toyota, has halted domestic production after admitting it forged the results of safety tests for its vehicles for more than 30 years.

The brand, best known for manufacturing small passenger cars, has stopped output at all four of its Japanese factories as of Tuesday, including one at its headquarters in Osaka, a spokesperson told CNN.

The shutdown will last through at least the end of January, affecting roughly 9,000 employees who work in domestic production, according to the representative.

The move comes as Daihatsu grapples with a deepening safety scandal that Toyota says “has shaken the very foundations of the company.”

Last week, Daihatsu announced an independent third-party committee had found evidence of tampering with safety tests on as many as 64 vehicle models, including those sold under the Toyota brand.

As a result, Daihatsu said it would temporarily suspend all domestic and international vehicle shipments and consult with authorities on how to move forward.

The scandal is another blow to the automaker, which had admitted in April to violating standards on crash tests on more than 88,000 cars, mostly sold under the Toyota brand in countries such as Malaysia and Thailand.

In that case, “the inside lining of the front seat door was improperly modified” for some checks, while Daihatsu did not comply with regulatory requirements for certain side collision tests, it said in a statement at the time.

In May, the automaker said it had discovered more wrongdoing, revealing that it had submitted incorrect data for collision tests on two hybrid electric vehicles. The company said at the time it had stopped shipping and selling those models.

The latest probe further threatens the company’s reputation. According to a report released last Wednesday by the investigative committee, 174 more cases were found of Daihatsu manipulating data, making false statements or improperly tinkering with vehicles to pass safety certification tests.

The oldest case was traced back to 1989, with a noted increase in the number of cases since 2014, the report said.

Toyota shares dropped 4% in Tokyo last Thursday following the news. The stock has since pared some losses.

In response, the Japanese behemoth has promised to shake up its subsidiary, saying in a statement last week that “fundamental reform is needed to revitalize Daihatsu.”

“This will be an extremely significant task that cannot be accomplished overnight,” Toyota said, adding that it would require a sweeping review of management, operations, and how the unit was structured.

“We recognize the extreme gravity of the fact that Daihatsu’s neglect of the certification process has shaken the very foundations of the company as an automobile manufacturer,” Toyota added.

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— CNN’s Emiko Jozuka contributed to this report.