Toyota Apologizes for Scandals as Vehicle Sales Reach New Global Record
| IOP Desk - 30 Jan 2024

IOP News Desk

New Delhi, Jan 30, 2024: The chairman of Toyota expressed his ‘shame’ regarding recent scandals involving subsidiaries of the Japanese auto giant, as the company announced a record-breaking 11.2 million vehicle sales across its brands last year.

This impressive figure solidifies Toyota's position as the world's top-selling automaker for the fourth consecutive year. The achievement can be attributed to a recovery in demand and the resolution of chip shortages.

While Toyota and Lexus brands contributed to global volume sales of 10.3 million units, Daihatsu, which manufactures mini-vehicles and is embroiled in a safety test scandal, experienced a decline in growth. Hino, a truck and bus-maker, also faced a sales decrease of nearly 10% due to a scandal related to rigged engine tests in Japan.

Furthermore, Toyota recently announced the suspension of shipments for 10 models that utilize diesel engines linked to testing irregularities at an affiliate company, Toyota Industries.

During a press conference, Chairman Akio Toyoda bowed in apology and took responsibility for the misconduct. He deeply apologized for the repeated wrongdoings by Hino Motors, Daihatsu Motor, and Toyota Industries, acknowledging the troubles and concerns caused to customers and stakeholders. Toyoda expressed his shame regarding the situation and recognized that regaining customer trust will take time. He promised to lead a transformation within the company.

Leading Automaker

Toyota's total vehicle sales increased by 7.2% compared to the previous year, reaching 11.2 million units. In contrast, Germany's Volkswagen Group achieved 9.2 million unit sales, representing a 12% increase. South Korea's Hyundai-Kia maintained its third-place position with 7.3 million units sold, a 6.7% increase.

However, in terms of market value, Tesla, the US electric automaker led by Elon Musk, remains ahead of Toyota.

Toyota attributed its strong performance to solid demand in each region and the alleviation of semiconductor shortages.

The record-breaking sales figure includes sales from the Toyota, Lexus, Daihatsu, and Hino brands, surpassing Toyota's previous record of 10.7 million units set in 2019 when it overtook Volkswagen, which held the previous industry record of 10.97 million units in 2019.

Electric Vehicle Targets

Scandals involving subsidiaries could potentially impact Toyota's overall reputation, particularly if concerns arise regarding corporate governance or ethical practices, according to Tatsuo Yoshida, an auto analyst at Bloomberg Intelligence. However, the millions of satisfied owners of Toyota, Lexus, Daihatsu, and Hino vehicles contribute to strong consumer confidence, which is a valuable asset that won't deteriorate instantly.

While Toyota has been slower than some competitors in investing in electric vehicles, focusing more on hybrids, the company has plans to introduce an electrified version for every Toyota and Lexus model globally by 2025. Additionally, Toyota aims to sell 1.5 million EVs annually by 2026 and 3.5 million by 2030. To support these goals, Toyota recently announced the significant expansion of an electric battery plant in North Carolina.

However, Yoshida suggests that meeting the 2026 target may be more challenging due to Toyota's slow progress in EV sales and the recent backlash against battery-powered vehicles. The achievement of this goal depends on various factors, including technological advancements, market demand, regulatory environment, and Toyota's ability to scale up production and innovation.

Image Credits: Reuters

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