Toyota, the leading global automaker, experienced a series of setbacks on Wednesday as its subsidiary, Daihatsu, became entangled in a fraudulent testing and certification scandal. In response, Toyota halted all worldwide shipments from Daihatsu and announced the recall of 1 million vehicles in the United States due to airbag issues.

The troubles for Daihatsu began in April when the company admitted to manipulating side-collision safety tests for vehicles primarily supplied to Toyota. Following this revelation, an independent investigation revealed a staggering 174 safety irregularities in 64 models, including those distributed to Mazda and Subaru as well. As a result, on Wednesday, Daihatsu suspended sales of all its currently produced models, both domestically in Japan and globally.

In a further blow to the company, Japan's transport ministry conducted a raid on Daihatsu's headquarters in Osaka on Thursday after the automaker acknowledged falsifying data. This intensified scrutiny adds to the mounting challenges faced by Daihatsu in maintaining its reputation and credibility.

Daihatsu has a long history that can be traced back to the early 1900s. Since 1969, it has been manufacturing vehicles for Toyota and has also diversified its production to include other brands such as Subaru. Specializing in smaller vehicles tailored to the Japanese market, as well as markets in Southeast Asia and Latin America, Daihatsu has played a significant role in Toyota's supply chain.

In response to the scandal, Toyota released a statement acknowledging its increased reliance on original equipment manufacturer (OEM) vehicles sourced from Daihatsu and expressed concern that this may have exerted undue pressure on its subsidiary. Toyota, however, claimed to be unaware of the extent of the fraudulent activities in Daihatsu's certification operations. The Japanese automaker pledged to revive Daihatsu but acknowledged that this process would take time.

Furthermore, Toyota faced another setback on Wednesday, as it announced a recall of 1 million cars in the United States. The recall covers Toyota and Lexus models produced between 2020 and 2022. The company identified a potential issue with the sensors in the front passenger seat, which may fail to accurately assess the weight of the passenger and result in airbags not deploying correctly in certain situations. Affected customers will be notified by February, according to Toyota's statement.

This recent recall involving airbags is not a first for Toyota. In 2014, the company joined several other automakers in a massive global recall of millions of cars due to defective airbags manufactured by Takata. Estimates suggest that by the end of 2022, carmakers had recalled around 42 million vehicles solely in the United States. These faulty airbags caused numerous deaths and injuries worldwide, with reports of explosions sending dangerous shrapnel into passenger compartments.

Additionally, in January 2020, Toyota issued a global recall of 3.4 million vehicles due to an electronic fault that hindered airbag deployment.

The repercussions of the Daihatsu scandal and the airbag recall were immediately felt in the stock market, as Toyota shares plummeted by 4% during Thursday's trading session in Tokyo.

As the investigations proceed and Toyota grapples with the fallout, the automaker is determined to address the issues at hand while striving to restore consumer confidence in its brand. However, these setbacks underscore the significant challenges faced by one of the automotive industry's most renowned companies.