How Toyota lost $15 billion!

You should be in trouble when you lose $15 billion unless you’re Toyota. That sounds odd, but it highlights the Japanese automaker’s capability to bounce back from challenges.

However, this time, the red flags could be different. Let’s dive into one of the most fascinating scandals plaguing Toyota. 

Key Takeaways

Don’t have much time? Here’s the summary of what we’re talking about:

• Toyota lost over $15 billion in market value due to a scandal involving falsified tests.

• The scandal involved Daihatsu and the manipulation of side-collision test results.

• Toyota's work truck division, Hino Motors, admitted to falsifying emissions data since 2003.

• Despite the scandal, Toyota's market cap remains robust at $265.15 billion.

• The Infiniti QX56 is an underappreciated full-size luxury SUV, but why would you buy one? Our article covers the best and worst years for the Infiniti QX56.

• We explore the differences between steel and aluminum wheel spacers and discuss the pros and cons of each material for your ride.

KERN’S CORNER

Here’s how Toyota lost $15 billion!

The short story is that Toyota lost over $15 billion in market value. 

When we examine it more closely, we see that the problem is much more severe than “just money.” 

It happened because the Japanese giant was caught falsifying tests. 

However, this will likely become a “nothingburger.” This article hits the nail in the head. 

The chances of this turning into another “Dieselgate” are extremely low. This isn’t Toyota’s first scandal, and it’s not the worst, even if it involved manipulating crash data.  

But why the immunity? Here’s how the scandal happened, step by step, and it all begins way before anyone would’ve guessed. 

The Daihatsu problem

In April 2023, Toyota’s small-vehicle subsidiary, Daihatsu, ran side-collision tests in several of its vehicles, which would eventually also be sold under the Toyota brand in some markets.

The company had installed a notch on the door to help smooth out any sharp edges that could injure passengers if the side airbag deployed. 

The notch worked, and the models passed the certification tests. 

The problem is that the notch never made it to production. 

A whistleblower warned managers that production staff had bypassed this modification. By the end of the month, both companies issued generalized, cautious statements. 

The numbers weren’t encouraging. 88,000 vehicles, including the Toyota Yaris ATIV, the Toyota Agya, and the Perodua Axia, were affected. 

The what? You might be wondering, and we’ll get to that later.  

Then, the problem seemingly disappeared. As both companies had promised, an independent panel began investigating, but nothing much surfaced, until December. 

Then, the world realized the problem was much bigger than anyone had expected. 

Daihatsu rushed to pause production, and Toyota announced that 64 models were affected. The problem went beyond a notch to reduce the chances of injury.

The company had performed testing with a specific airbag control unit, but it wasn’t the same unit present in the cars sold to the market. 

Daihatsu also falsified crash test speeds; to make matters worse, this wasn’t new. These “cases of misconduct” were prevalent after 2014, but one case showed this happened with vehicles as far back as 1989.

When this information reached authorities, the Japanese transport ministry investigated Toyota.

Apologizing was huge for Toyota, and it’s a big thing in Japan.

In traditional Japanese culture, this means that the authorities are looking for any signs of wrongdoing, but the company should also be proactive and report findings. After all, that was why Toyota performed internal investigations as well. 

The Toyota Scandal 

Authorities were breathing down Toyota’s neck, and the investigations led to concerning revelations. 

In January 2024, Toyota admitted that its truck division, Hino Motors, had systematically falsified emissions data since 2003. 

Toyota also lied in crash tests of vehicles such as the Corolla Fielder, Corolla Axio, and Yaris Cross. These vehicles are currently in production, but four more models involved in the scandal have already been discontinued. 

Toyota paused production but could do nothing about the vehicles already sold. 

We must pause here to analyze the findings: this isn’t new. 

The falsified tests were from 2014, 2015, and 2020. 

The report also affected other companies, including Honda, Mazda, Suzuki, and Yamaha. 

Toyota’s stock dropped 5.4%, totaling $15 billion, and only then did the world turn its attention to the scandal. 

After all, losing $15 billion is no small amount. Plus, the scandal revealed surprising aspects about the company. 

Once known as the pinnacle of safety, Toyota saw its reputation take a big hit. 

Not only that, but Akio Toyoda, the Chairman of the Board and once CEO of the massive company, faces criticism. 

Sure, he has navigated these troubled waters, with the now-infamous stuck gas pedal scandal, which cost billions and claimed a dozen lives. 

But the fact that he’s been through them all has some people wondering if he’s part of the problem. 

At least, that was the initial concern when word got out.

Then, things cooled down once again. 

After all, this is Toyota, and that’s why nobody cares. Well, almost nobody.  

Cooler Heads Prevail

Let’s start with the obvious: Toyota Motor’s market cap is $265.15 billion. The $15 billion represents a 5.4% drop in value, which is considerable. However, it’s not catastrophic, or a “plunge,” as some outlets call it. 

Then, there’s the whole irony of comparing it to Volkswagen and the Dieselgate scandal, but this is different. 

VW executives were well aware of the situation. It was their call, after all. 

In Toyota’s case, the problem comes from workers who want to speed up their processes despite knowing full well that their products will pass the test. 

After all, that’s what happened!

All the vehicles with altered tests eventually went through rechecks. The result: they passed with flying colors. 

Their quality saves Toyota once again. 

It’s normal for people to jump to conclusions.

In a world where competition is rougher, some companies are cutting corners to meet deadlines (here’s to you, Elon). Toyota isn’t one of them. 

This company will likely realign itself and return to quality. 

However, that doesn’t mean we should be soft on Toyota. These situations prove that even the most reliable brands should follow the rules. 

This leads us to the final point. 

I know I’ve left out the topic of the cars affected. 

There’s something I call the Westernization of problems. These vehicles aim at the Middle East, Asian, and Latin American markets. By the way, I’ve driven the Yaris Cross, which is not bad for its size. 

They’re not aimed at Europe or the US, and that’s why it’s not that big of a deal. 

Soon, we will all forget about this problem. 

However, if they do reach the US, that’s an entirely different story. 

One of our favorite Toyotas is the Sequoia. If you want to know the best year for the Toyota Sequoia, check out our article. 

BEST AND WORST

What are the best and worst years for the Infiniti QX56?

Let’s talk about one of the most underappreciated full-size SUVs in the US market: the Infiniti QX56. 

This upgraded Nissan is for those who want to travel off the beaten path. It’s a luxury SUV that not many people have heard of, but is that with good reason?

Our article covers the best and worst years for the Infiniti QX56, in case you’re looking for an unusual SUV to own.

TIPS AND KNOW-HOW

Is there a difference between steel and aluminum wheel spacers?

In our DIY section, we’re covering wheel spacers. These are essential for creating more track width and are extremely common in modified trucks and SUVs. 

The two most popular materials are steel and aluminum, but what’s the difference? In our article, we’re discussing the key pros and cons of each material and which one is best for you.

NEWSBITES

Every week, we scour the web for the most essential news. Here’s what you need to know this week:

• Waymo is recalling driverless cars so they don’t crash into poles, and we’re glad for the recall.

• The EU launched a massive probe into Chinese cars and found many subsidies that can alter the car’s real value. 

• GM will reach EV profitability by the end of the year despite making fewer EVs. 

• Air quality in Colorado has gotten so bad that authorities are asking people to use their cars less.