Toyota Industries Corp vows cultural overhaul and leadership restructuring following safety violations.

The initiative, disclosed after Chief Executive Officer Koichi Ito presented proposals to Japan's transport ministry, includes measures to prioritize legal compliance and enhance transparency within the organization, reported Bloomberg.

Senior executives, including the president, will partially refund their salaries for non-compliance with certification standards, the report added.

Toyota Motor Corp. (NYSE:TM) halted deliveries of 10 vehicle models earlier this year following revelations of irregularities in engine horsepower tests conducted by an affiliate.

These developments follow a previous probe into Daihatsu Motor Co., another Toyota unit, which revealed widespread failure in collision safety testing.

In February 2024, Toyota Industries received a correction order from the Ministry of Land, Infrastructure, Transport and Tourism concerning legal violations in domestic engine certification.

Masahiro Inoue, head of Toyota's operations in Latin America, has been appointed to restore leadership and consumer confidence at Daihatsu.

Transport Minister Tetsuo Saito has urged Japanese automakers to conduct internal investigations into potential misconduct, with a deadline set for April.

Toyota Industries and Daihatsu have been instructed to implement measures to prevent future scandals, prompting Daihatsu to announce plans for increased staffing, extended production times, and management training to foster a culture of transparency.

Price Action: TM shares are trading higher by 1.37% at $254.93 on the last check Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image via Shutterstock

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