Daihatsu Motor Co.’s prioritization on quick development, which imposes tight schedules for certification tests, and ineffective management supervision contributed to a falsification testing scandal, according to an investigative panel.

Employees voiced many disheartening comments in a survey conducted by the third-party panel investigating allegations that the automaker obtained government vehicle certification by using fraudulent data.

One employee said, “The schedule decided on paper was like walking a tightrope, which allowed no room for mistakes.”

Another said, “We somehow managed to make it through these unrealistic schedules, which then became part of our track record and eventually became the norm.”

Among the newly uncovered irregularities were some that could affect safety, including the rigging of air bag tests. Despite the requirement for air bags to activate automatically when a collision is detected, a timer was installed to trigger the safety devices. 

The panel noted that Daihatsu’s misconduct was partly driven by its emphasis on “short-term development,” which aimed at quickly producing new vehicles at a low cost while paying attention to details of “one millimeter, one gram, one yen and one second.”

The pressure-filled culture began with the launch of the popular passenger minivehicle, the Mira e:S, in 2011, which sold about 900,000 units over a decade.

The development was accomplished in a significantly shorter time than previous models, the survey said.

This was seen as a “successful experience,” leading to even greater pressure to shorten timelines in subsequent vehicle developments.

Design and planning changes often require time, making it difficult to spend time on certification tests that are the final step in the development process.

An employee in charge of the certification process said that heavy pressure was applied to ensure that vehicles would not fail the tests. 

In addition, a culture where the ability to accomplish tasks was taken for granted was prevalent in Daihatsu’s development department and employees faced severe reprimands in the event of failure, the survey said.

This resulted in the department containing problems to the site itself.

The failure of management level employees to correct these issues also contributed to the widespread misconduct.

With ongoing staff reductions, management personnel ended up overseeing multiple areas, becoming less familiar with hands-on operations and delegating more responsibility to the front lines, the survey said.

The result is that Daihatsu has admitted to 174 cases of misconduct on safety tests for most vehicles currently in production along with some discontinued models.

The transport ministry has ordered the automaker to stop shipments of all vehicles until they are confirmed safe.

TOYOTA ACCEPTS RESPONSIBILITY

A long-running series of misconduct by Daihatsu has been found, with the earliest incident dating to 1989.

These expanded as Daihatsu strengthened its collaboration with its parent company, Toyota Motor Corp.

“Toyota acknowledges the significant responsibility that the fundamental basis for advancing the certification process was shaken up,” Toyota Executive Vice President Hiroki Nakajima said at a news conference on Dec. 20.

Daihatsu was expected to demonstrate its strength in short-term development overseas,  particularly in emerging countries, Toyota said,

The third-party panel pointed out that Daihatsu was increasingly pushing for short-term development to meet Toyota’s expectations.

The period after 2014, when cases of misconduct reportedly surged, coincides with Toyota outsourcing increasing production to Daihatsu, mainly for small cars.

In 2016, Toyota fully acquired Daihatsu as a subsidiary, and Daihatsu became increasingly involved in Toyota’s production projects, particularly for emerging markets.

Some Daihatsu employees said during the panel’s investigation, “A major factor was the company pushing ahead with development that overreached its capabilities to meet Toyota’s expectations.”

Daihatsu accounts for 30 percent of Toyota group’s domestic sales for fiscal 2022.

Due to the misconduct, the Toyota group’s small car strategy, in which Daihatsu plays a significant role, inevitably faces a fundamental review.

There is also concern for the declining trust in the Toyota group, and more broadly, Japan’s renowned manufacturing reputation.

Recently in Japan, misconduct related to quality and inspections have been found in major manufacturing companies, including subsidiaries of Mitsubishi Electric Corp. and Hitachi Ltd. at the time.

These scandals have rocked the country’s pride in its high-tech and quality manufacturing industries. 

Last year, Hino Motors Ltd., part of the Toyota group, admitted to falsifying the results of exhaust emissions and fuel economy tests.

In March this year, Toyota Industries Corp., which is the source company of the group, disclosed the misconduct.

Despite these developments, the irregularities continued at Daihatsu this year.

(This article was written by Kenta Nakamura, Kohei Kondo, Chihaya Inagaki and Eisuke Eguchi.)