Japanese car manufacturer Daihatsu has temporarily shut down production after admitting to decades of fraudulent safety test results. The company, a Toyota subsidiary and one of Japan’s oldest combustion engine manufacturers, released a statement on their website saying they are taking the irregularities incredibly seriously and will be making sweeping reforms to their corporate culture. Daihatsu immediately shut down its factories and suspended all vehicle imports and exports following the independent investigation’s findings.
The shutdown will impact thousands of auto parts makers and employees, dealing a “blow” to the local economies, according to the Associated Press. An independent investigation looked at 64 vehicle models and found 174 counts of irregularities in safety tests and other procedures, according to The Hill. These irregularities included tampering with safety tests, creating false information, and fabricating test data. The Transport ministry in Japan has also begun on-site inspections that looked into issues in the company dating back to 1989.
The company faced overwhelming competition in the U.S. market and failed to make an impact as it faced rivals, including Toyota, who expanded their interest in Daihatsu over the years. Daihatsu had a contract to produce small vehicles for Toyota, and some of its cars ended up rebranded as Toyota models and sold in the U.S., even after Daihatsu stopped selling directly to the American market. Subaru also sold re-badged Daihatsu vehicles, including the latest generation of the Subaru Stella and the Subaru Chiffon.
Daihatsu is Toyota’s unit specializing in small cars and trucks that are popular in Japan. The company declined to say when production may resume, but media reports said production lines will remain closed at least through the end of January. Toyota North America did not respond to a FOX Business request for comment.