[News Inside Companies] 'Toyota Jidongjigi' That Embarrassed Toyota

Chairman Apologizes Amid Quality Certification Fraud Controversy

"I apologize for betraying your trust. I am determined to innovate with the resolve to rebuild the company."

On the 30th, the day Toyota Motor Corporation achieved a record high of 11.23 million vehicle sales, securing the world's number one position, Chairman Akio Toyoda bowed his head in apology, which became a global topic. The brand image was shaken all at once due to a quality certification fraud controversy at its subsidiary Toyota Auto Body, prompting the chairman to personally apologize.

[Image source=Yonhap News]

In particular, Toyota Auto Body is known within the Toyota Group for its craftsmanship spirit, which caused even greater shock inside and outside Japan. This company originally produces forklifts and automobile engines. Most engines for major Toyota models such as the Land Cruiser and Lexus are manufactured here.

The core of the controversy involved three types of diesel engines. Toyota Auto Body was found to have manipulated control devices during performance tests for diesel engine quality certification to produce output higher than the actual performance. Consequently, Toyota Motor Corporation decided to halt shipments of 10 vehicle models, including the Land Cruiser Prado, equipped with the problematic engines.

The Toyota Group takes the quality controversy of the 'engine,' the heart of the automobile, very seriously. Although it has maintained its position as the world's number one automaker for four years, quality fraud incidents at subsidiaries such as Daihatsu and Hino Motors have occurred consecutively, and there is also a growing sense of crisis due to hesitation in investing in the latest automotive trend, electric vehicles (EVs), leading to missed opportunities.

In this situation, the compounded crisis is intensifying as the trust existing customers had in the Toyota Group is also collapsing. Above all, Toyota has been based on its unique Toyota Production System (TPS), which emphasizes "repeating the question 'why' five times when there is a problem and thoroughly pursuing the cause to improve it."

[Image source=Yonhap News]

According to NHK, an internal investigation revealed that Toyota Auto Body employees stated, "Even if development is not going well, it is difficult to report to superiors that it cannot be done," and "Delaying the launch schedule causes trouble for the company. Meeting the deadline was always prioritized." It was also revealed that Toyota Auto Body only established a regulatory certification department in 2021, and before that, general employees, rather than regulatory experts, were analyzing complex laws and regulations under poor conditions.

As it became clear that Toyota's long-emphasized quality-first principle was structurally hollow, the entire Japanese corporate sector appears to be on edge. The Nihon Keizai Shimbun (Nikkei) pointed out, "Now is precisely the time to reflect on what the true value of the Toyota way really was."