Toyota lost over $23.7 billion in market value last week after being caught falsifying tests

Lim Hui Jie
CNBC
2 Min Read
Toyota Motor Corporation Board Chairman Akio Toyoda bows during a press conference in Tokyo on June 3, 2024. Toyota said on June 3 it had suspended domestic shipments of three car models after falling foul of government certification rules along with its Japanese rivals Honda, Mazda, Suzuki and Yamaha.
Toyota Motor Corporation Board Chairman Akio Toyoda bows during a press conference in Tokyo on June 3, 2024. Toyota said on June 3 it had suspended domestic shipments of three car models after falling foul of government certification rules along with its Japanese rivals Honda, Mazda, Suzuki and Yamaha. Credit: Supplied/CNBC

Shares of Japanese automakers have largely plunged since the country’s transport ministry found false data used to certify certain models a week ago on Monday.

Shares of Japan’s largest carmaker Toyota fell more than 5.4 per cent last week, after the scandal broke on June 3, but is recovering on Monday. The automaker lost 2.45 trillion Japanese yen ($23.7 billion) in market value last week alone.

Shares of Mazda, the country’s second largest automaker, fell 7.7 per cent in the same period, and lost 80.33 billion yen in market capitalisation last week.

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The wide ranging inspection by the Ministry of Land, Infrastructure, Transport and Tourism ministry also found irregularities in certification applications by other automakers Honda, Suzuki and Yamaha.

Last week, Honda’s stock fell 5.75 per cent, Yamaha Motor lost 2.2 per cent, while Suzuki Motor inched down 0.3 per cent.

Shares of all those companies were trading higher on Monday. Toyota was up 1.7 per cent, Honda gained 2.13 per cent and Mazda increased 1.7 per cent. Suzuki and Yamaha were also marginally higher.

All five companies had submitted false test data, or in the case of Toyota and Mazda, falsified the vehicles used in crash tests.

Toyota announced on June 3, following the ministry’s investigation report, that it will temporarily halt shipments and sales of three models currently manufactured in Japan, namely the Corolla Fielder, Corolla Axio, and Yaris Cross.

Toyota’s chairman Akio Toyoda apologised to the company’s customers and stakeholders, acknowledging that seven of its models were “tested using methods that differ from the standards defined by the national authorities.”

Separately, Mazda said it had suspended the Roadster RF and Mazda 2 from May 30.

Both companies however, said that customers can still continue to drive their cars.

The transport ministry said it will conduct on-site inspections of the five companies where misconduct was reported.

The inspection into Japanese automakers comes after Toyota’s Daihatsu unit said in December it will halt shipments of all vehicles both overseas and in Japan. It came after an investigation into a safety scandal found issues at some 64 models, including 22 sold under the Toyota brand.

Daihatsu said in April last year it had rigged side-collision safety tests carried out for 88,000 small cars, most of which were sold under the Toyota brand.

CNBC

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