Updated December 25th, 2023 at 18:18 IST

Daihatsu Motor to compensate 423 suppliers over safety concerns

Daihatsu suspends Japanese production, evaluating impact for compensation based on past business volumes.

Reported by: Business Desk
Daihatsu | Image:Pexels
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Toyota's subsidiary, Daihatsu Motor, is set to compensate 423 domestic suppliers following the suspension of its Japanese plants due to a safety scandal, as confirmed by a company spokesperson on Monday. The small car specialist has halted production in Japan until the end of next month. Compensation for suppliers will be determined based on past business volumes, and the company is actively assessing the impact of the production stoppage on its broader supplier network.

Vehicle shipment halt

Daihatsu suspended shipments of all its vehicles last week after a safety investigation identified issues in 64 models, including nearly two dozen sold under the Toyota brand. The company plans to collaborate with main suppliers to address the fallout from the scandal and may also assist smaller subcontractors in accessing support funds from the industry ministry.

While Daihatsu's overseas operations, particularly in Southeast Asia, have been affected, there have been positive developments. The company has resumed production of Perodua brand cars in joint ventures with Malaysian automaker Perodua after receiving regulatory clearance. Daihatsu has also resumed shipments from its subsidiary in Indonesia, PT Astra Daihatsu Motor.

Daihatsu, fully owned by Toyota, is actively managing the repercussions of the safety concerns and is working to provide support to its extensive supplier network. The spokesperson added that efforts are underway to ensure fair compensation distribution, including potential assistance for smaller subcontractors affected by the production halt.

(With Reuters Inputs)

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Published December 25th, 2023 at 18:17 IST