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Toyota Hit With First Corrective Order for Skirting Safety Tests

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Koji Sato at the transport ministry in Tokyo, on July 31. (Nicholas Takahashi/Bloomberg)

(Bloomberg) -- Toyota Motor Corp. was dealt its first-ever corrective order by the Japanese government after an on-site investigation found that seven of its car models weren’t properly certified for mass production.

Four of the seven are currently in production, while six were also sold abroad. The transport ministry said it has contacted the relevant agencies in those countries to verify vehicle safety. 

“We found irregularities that were extensive and intentional,” a transport ministry official said Wednesday before handing the order to Toyota Chief Executive Officer Koji Sato. The ministry urged Toyota to improve its corporate culture so that fraudulent behavior isn’t repeated.

The new cases bring the total number of models now under scrunity at Toyota to 14, an embarrasing development after the carmaker itself said it found no additional cases in an internal probe earlier month. The government earlier this year said it had found irregularities in vehicle certifications across five Japanese carmakers, after a broad inquest was triggered by scandals at a pair of Toyota subsidiaries in December.

The models pinged by Wednesday’s announcement include the RAV4 and Harrier SUVs, Noah and Lexus LM minivans, as well as the Prius. The ministry ordered Toyota to submit planned countermeasures within a month.

Top leadership wasn’t involved enough in the certification process, according to Toyota’s statement. “Moving forward we’re to going implement better data management and other structures to ensure proper testing,” the company said.

Sato meanwhile apologized to customers for “causing concern, and for the company’s reliance on factory workers.” He added that all the vehicles are safe to drive.

In June, Japan’s transport ministry suspended shipments of six vehicles — including three made by Toyota — after a probe revealed in some cases automakers had submitted faulty data or used modified test vehicles during collision safety tests.

All three of those models have restarted production, Sato said Wednesday. 

Almost 90 manufacturers were ordered by the government to reexamine their testing procedures and report their findings, after decades of fraud were uncovered in December and January at Daihatsu Motor Co. and Toyota Industries Corp. Hino Motors Ltd. was investigated a year earlier for falsifying emission test results.

Toyota shares fell as much as 4.2%, their largest intraday dip since early April.

©2024 Bloomberg L.P.