To recall, Daihatsu has been hit with various safety and technical irregularities this year, some of which the company has been hiding for 30 years. This has reached vehicles in the Philippines in a series of quality-related recalls on several Daihatsu-developed vehicles:

As a result, Toyota and Daihatsu are dissolving the “Emerging-market Compact Car Company” which has been responsible for vehicles such as the Raize (top photo), Yaris Cross, Rush, Avanza, and Veloz. Instead, Toyota, through the Toyota Compact Car Company, will handle the entire process of creating future models, from development to certification.

Daihatsu will withdraw from global car development and return to building small (kei) cars for the Japanese market.

These structural changes will be reflected in the renaming of the two companies tasked with developing and manufacturing cars for the greater Asia region. Toyota Daihatsu Engineering & Manufacturing (TDEM) in Thailand and Toyota Motor Asia Pacific (TMAP) in Singapore will be named Toyota Motor Asia (TMA) and form Toyota’s Asia regional headquarters. The aim is to make them both self-reliant and broaden their collaboration. The reforms are expected to be completed in June.

Additionally, the business and product management responsibilities will also be transferred to Toyota’s Business and Sales Unit. The company will take over other areas related to subcontracting, including resource management and optimization, to strengthen its partnership with Daihatsu.

An independent panel that investigated the crisis found that the scandal was rooted in management that focused on “short-term development” and did not take measures to address the fraud. The team, it added, “did not fully grasp the actual situation on the ground and only responded on an ad-hoc basis,” leaving workers “unable to speak up when they have a problem.”