Toyota takes over Daihatsu role in small car development

Toyota announced a major restructuring of its operations with Daihatsu following the safety scandal that embroiled the two automakers earlier this year. While Toyota already implemented a management shakeup in Daihatsu, those measures were merely the beginning.

Recently, Toyota announced that they will reform their overseas business structure to “thoroughly prevent the recurrence of procedural irregularities at Daihatsu”. More importantly, Toyota will take over the development of compact cars for emerging markets effective immediately.

Old structure with Toyota-Daihatsu EMCC entity

That’s right, the Emerging-market Compact Car (EMCC) company which spanned the organizations of both Toyota and Daihatsu has been dissolved following Daihatsu’s safety irregularities that tarnished the brand’s overall safety image. Moving forward, EMCC will now be known as the Toyota Compact Car Company. In addition, Toyota will take responsibility for overseas businesses from development to certification.

As for Daihatsu, the automaker will continue to help in developing cars for emerging markets but will not take on a project leader role. More specifically, Daihatsu will only be commissioned to do certain parts of vehicle development while under the supervision of Toyota. Moreover, the last remaining vehicles currently still being developed by Daihatsu will be checked and certified by Toyota.

New structure with Toyota Compact Company replacing EMCC

What does this mean for Toyota Motor Philippines and the Daihatsu-developed vehicles? In a nutshell, the production and development of future compact cars that Daihatsu initially led will now be under Toyota’s leadership. That means the development of future generations of vehicles like the Wigo, Avanza, Veloz, Raize, the DNGA-based Yaris Cross, and Vios will be led by Toyota moving forward.

As for the next-generation Yaris, Daihatsu will still reportedly continue to lead its development given that it’s already too far in the cycle. However, the safety audit of the vehicle will be under the strict scrutiny of Toyota after Daihatsu finishes development.

Aside from those, Toyota Daihatsu Engineering & Manufacturing Co., Ltd. (TDEM) and Toyota Motor Asia Pacific Pte Ltd. (TMAP) will become the Asia Regional Headquarters. It will belong under the Asia Region of the company and be renamed “Toyota Motor Asia” (TMA).

With Daihatsu effectively compromising Toyota’s safety reputation, it’s no surprise the automaker has taken the aforementioned measures to steer them back onto the straight and narrow. Combined with the fact that the Japanese government became involved in the investigation speaks volumes about the measures Toyota recently made to avoid such irregularities from happening again.

Since Toyota will lead the development of compact cars for emerging markets, we will be curious as to what will be the result of Toyota taking over Daihatsu’s operations in the coming years.