Like all empires, whether corporate or state, Toyota faces the ever looming spectre of decline. Today, the company finds itself overextended, engaged in numerous battles across multiple fronts. However, its most significant battle is internal. As the world’s largest carmaker, Toyota is currently entangled in fraudulent practices and corruption, leading to production suspensions. In its attempt to navigate emissions and crash safety regulations, Toyota has spawned its very own Dieselgate scandal and added Testgate scandal or good measure.
In a bid to pass emissions and crash safety regulations and bypass regulators Toyota understated the CO2 emissions of its diesel engines. Regulators discovered that Toyota had deceived emissions test regulations for diesel engines developed by supplier Toyota Industries, leading to the suspension of shipments for specific Toyota models such as the Hilux truck and Land Cruiser 300 SUV.
Last month, Toyota’s Daihatsu minicar subsidiary suspended global shipments due to rigging side-collision safety tests, a safety investigation uncovered irregularities stretching as far back as 1989.
Unlike Volkswagen’s Dieselgate scandal, where sophisticated software was designed and developed to deceive regulators, Toyota’s method was brutally simple: they understated diesel engine emissions using nothing more than pen and paper. In both instances, whistleblowers brought the misconduct to light, plunging Toyota into a quagmire of trouble. Once again, its reputation in Japan is under intense scrutiny.
Despite the dysfunctional and fraudulent practices, the Toyota juggernaut remained unstoppable in 2023. Maintaining its status as the largest car manufacturer, Toyota shifted over 11 million units. However, the status of trust has eroded. Toyota faced a similar problem in 2010 relating to quality control issues but it recovered.
Indeed, Toyota resembles a recovering alcoholic prone to relapsing into wild bouts of drunkenness. Whistleblowers have exposed Toyota’s rush to push vehicles through production, compromising on quality control measures in its relentless pursuit of remaining the world’s largest car manufacturer. So fixated is Toyota on preserving its manufacturing hegemony that it has lost sight of where it is today and the path it should take for the future.
Toyota’s evolution is stagnating, resembling a dinosaur that continuously grazes on the same grasslands, only to move on to new pastures once the old ones are depleted, yet returning when the grass regrows. The company seems to lack innovation, now following rather than leading as it once did.
Toyota appears to be chasing its own tail, occasionally lifting its corporate head, gazing skyward, seemingly awaiting the impact of an asteroid ominously looming in the sky above.
