President, chairman of scandal-hit Daihatsu unit to step down

Japanese automaker Toyota Motor has said that the president and chairman of its subsidiary Daihatsu Motor will step down almost a year after the compact car maker said that it rigged the collision safety-tests. This is one of the most drastic changes that has happened at Daihatsu so far this year as Toyota seeks to maintain the brand’s reputation as one of Japan’s most iconic compact car makers.

Toyota’s reputation hindered

After the safety certification lapsed at Daihatsu, Toyota has faced a potential hit to its reputation. This has been heightened after a separate governance issue struck at truck maker Hino Motors and affiliate Toyota Industries, so much that the scandal at these three companies triggered a rare apology of Toyota Chairman Akio Toyoda last month.

Executives being replaced

Daihatsu’s president Soichiro Okudaira will be replaced by Toyota’s Latin America and Caribbean region chief executive, Masahiro Inoue, effective March 1. The outgoing executive had worked at Toyota for nearly four decades before becoming president of Daihatsu in 2017, a year after it became a wholly owned Toyota subsidiary. Daihatsu’s chairman, Sunao Matsubayashi, will not be replaced. However, Toyota Chief Executive Koji Sato said that the organisational change at Daihatsu was not carried out as a punishment for the outgoing executives.

Removal from commercial vehicles group

Separately, Daihatsu also will be removed from a commercial vehicle partnership known as the Commercial Japan Partnership Technologies (CJPT) given the misconduct over the safety test certification applications. This partnership was established in April 2021 by Toyota, Hino and Isuzu Motors to facilitate technology development for commercial vehicles. Suzuki Motor and Daihatsu had joined in July the same year. The 10% equity stake held by Daihatsu in the partnership will be transferred to Toyota.

In 2023, Daihatsu accounted for 7% of Toyota’s total group sales of 11.2 million vehicles, including those of the luxury Lexus brand and Hino Motors.