Toyota Stock Hit By Halt Of 3 Models, HQ Raid By Japan Officials

(RTTNews) - Toyota Motor Corp. stock was hit on Tuesday's trading in Japan after the Japanese auto major announced the halt of shipments and sales of three models produced in the country following certification issues and a raid at its headquarters by government officials.

Japan's Ministry of Land, Infrastructure, Transport and Tourism or MLIT had said that certain automakers including Toyota, Honda Motor Co., Mazda Motor Corp., Suzuki, and Yamaha Motor were found to have submitted either flawed or manipulated data when applying for certification of vehicles. However, Toyota reportedly was the only automaker to undergo an on-site inspection.

Honda shares also were down 2.4 percent in Tokyo after it reportedly disclosed that it had falsified safety certification tests following the Japanese government's actions.

Mazda Motor also temporarily suspended shipments of two models after its investigation result confirmed certain irregularities. These models have not been in production since May 30.

On Tuesday, the Japanese transport ministry officials launched an on-site investigation at Toyota headquarters after irregularities were found in its applications to certify certain models.

The officials earlier had revealed that Toyota submitted faulty data during pedestrian-safety tests for three current models Corolla Fielder, Corolla Axio and Yaris Cross.

In a statement, Toyota said it has temporarily halted shipments and sales of three models currently produced in Japan, such as Corolla Fielder, Corolla Axio, and Yaris Cross, effective Monday, following its investigation on model certification applications.

As per instructions from the MLIT on January 26, the company had conducted the investigation, which is still in progress. Toyota noted that seven models, including some that have already been discontinued since 2014, were tested using methods that differed from the government standards, and this was reported to MLIT on May 31.

The investigated model certification applications involve inadequate data in pedestrian and occupant protection tests for the three production models, which are now halted, as well as errors in crash tests and other test methods for four discontinued models of Crown, Isis, Sienta, and RX.

Toyota said, "We take it seriously that the problem was discovered at Toyota following the recent discovery of certification issues at Hino Motors, Ltd. and Daihatsu Motor Co., Ltd. and Toyota Industries Corp. Following comprehensive internal verifications on the affected vehicles, including those that are no longer in production, we can confirm that there are no performance issues that contravene laws and regulations. Therefore, there is no need to stop using the affected vehicles."

Toyota said it will continue to provide detailed explanations to the authorities and expedite appropriate measures, including conducting testing in the presence of witnesses.

At a press conference, Toyota chairman Akio Toyoda apologized to shareholders and customers.

In January, the company had suspended shipments of Hilux truck and Land Cruiser 300 SUV models, after an independent panel found that the diesel engine tests of the vehicles were fraudulent.

The latest issues follow a safety test scandal at Toyota's subsidiary Daihatsu compact car unit, one of Japan's oldest combustion engine manufacturers, which in December last year shut down production after admitting that it had been compromising the safety results for decades.

In 2022, another subsidiary, Hino Motors said it had falsified emissions data for some engines since 2003.

However, no accidents have been reported so far due to the safety negligence.

Despite the scandals, Toyota Motor remains the global top-selling car manufacturer, after producing 11.52 million vehicles in 2023, a growth of 8.6 percent from last year, and selling 11.23 million vehicles, recording a growth of 7.2 percent.

In Japan, Toyota shares closed Tuesday's trading at 3,298 yen, down 1.3 percent. Honda Motor closed at 1,726 yen, down 2.24 percent.