Japanese automaker Toyota was punished by investors after its majority-owned commercial vehicle unit revealed to have manipulated emissions and fuel economy figures since several years for certain diesel vehicles sold domestically.
Toyota shares fell by 6.5% in trading after subsidiary Hino Motors suspended the sale of certain trucks and buses equipped with the fraudulent engines. Hino, in which Toyota owns over half the voting stock, fell 16% itself.
According to information, Hino has already stopped sales of its various trucks and bus models after discovering that either their diesel emissions or their fuel economy ratings had been tampered by its engineers. Hino said it “deeply apologizes” and vowed to put legal compliance first from now on, adding management is taking the findings “extremely seriously.”
In a separate statement, Toyota said 3,000 units of its Coaster bus, developed and manufactured by Hino since July 2019, had fuel efficiency ratings worse than advertised: According to Toyota:
“We would like to apologize for any inconvenience and concern this might cause customers who are currently using Toyota Coaster buses equipped with the engine in question.”
Modern diesel trucks are known to emit fewer harmful nitrogen oxides because of exhaust gas after-treatment systems, which however are deemed too expensive by many mass-market automakers. These systems break down emissions with the help of an ammonia-based solution called urea, but the catalytic conversion requires the use of some fuel in the process. The Hino trucks whose sale has been suspended in Japan either did not use these urea-based systems and therefore emitted too much NOx once they left the regulatory test bench for real-life road conditions, or they did but required more fuel to run than the manufacturer claimed.
The use of fraudulent data has been ongoing since at least 2016, with Hino having sold at least 115,526 vehicles with engines certified by the government based on rigged data. Hino says about 35% of its annual domestic sales are expected to be subject to suspension. The company has pledged to continue conducting a thorough investigation of its engine certification procedures and form a special committee consisting of independent outside experts that will propose corrective measures to their engine development processes. It said in a statement:
“The committee will conduct an investigation to clarify the extent of the identified issues and an in-depth analysis into the root causes. In order to restore the confidence of all stakeholders, Hino commits to carefully reviewing the reports from the outside experts, taking effective remedial measures and reforming its corporate structure to put compliance first.”
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