Daihatsu, the Japanese automaker owned by Toyota, has announced the shutdown of its factories in Japan following the admission of falsifying safety tests on its vehicles earlier this year. An independent investigation revealed problems with 64 vehicle models, leading to the suspension of all vehicle shipments both domestically and internationally.

The investigation conducted by Daihatsu Motor Co. uncovered 174 new cases of irregularities in safety tests and other procedures across 25 test categories. Tampering with safety tests, fabrication of test data, and creating false information were among the discovered irregularities. As a result, Japan's Transport Ministry initiated on-site inspections to address the long-standing issues that have plagued the company since 1989.

In response to the investigation's findings, Daihatsu began closing down production lines on Monday and halted operations in all four Japanese plants located in Shiga, Kyoto, and Oita prefectures, as well as its headquarters in Osaka. While the company has not announced a specific timeline, the shutdown is expected to last at least until the end of January, impacting approximately 9,000 employees working in domestic production.

This latest probe and ongoing investigation by Japan's Transport Ministry mark another setback for Daihatsu, which has faced a series of issues over the past year. In April, the automaker admitted to violating collision test standards on over 88,000 vehicles, primarily sold under the Toyota brand in Thailand and Malaysia. Subsequently, in May, additional problems with side collision testing for two hybrid electric vehicles were discovered.

Toyota, Daihatsu's parent company, released a statement last week apologizing for the inconvenience and concern caused by the investigation's findings and emphasized the importance of implementing reforms going forward. Toyota expressed its commitment to supporting Daihatsu's revitalization, with the aim of regaining trust and returning the company to its roots as a leading "compact mobility company."

The shutdown of Daihatsu's factories is expected to have a significant impact on the company's 9,000 domestic employees, as well as its extensive supply chain, which includes 8,136 companies across Japan. Market research firm Teikoku Databank reported that total sales from these supply chains amount to approximately $15.53 billion.

As the fallout from the safety test scandal continues, the future of Daihatsu remains uncertain. The full extent of the financial and reputational damage caused by the falsification of safety tests will likely be revealed in the coming months.