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Toyota had a great 2023. It just reported that its overall sales are up 7%, to 11.2 million vehicles worldwide. That means it stayed ahead of VW (9.2 million) and kept its status as the largest automaker in the world.

But 2024 is not looking as rosy. A whistleblower at Toyota-owned Daihatsu revealed that the company has been cheating on its mandated diesel emissions tests. Then Hino motors, a truck manufacturer also owned by Toyota, reported it has had a system for fooling these diesel tests since 2003. Toyota actually halted production of several diesel vehicles. The scandal came to a head early Tuesday morning when the Japanese government raided a Toyota plant for evidence.

So what in the world is going on at Toyota?

A row of diesel Toyota Land Cruiser trucks parked on safari in Tanzania
Toyota Land Cruisers in Tanzania | DarthArt via iStockPhoto

Toyota’s CEO speculated that the company might need better education for workers on the importance of complying with rules. But reporters tell the opposite story. Japan’s daily business newspaper reported that management ignored worker protests about overly aggressive engine development goals.

Why cheat on an emissions test? Diesel engine designers often must sacrifice both power and mpg to meet government emissions limitations. (The limiting factor is usually emissions of a non-greenhouse gas called Nitric Oxide or NOx). So fudging the test results may seem like a victimless way to build an engine that’s a bit more powerful and fuel efficient than the competition.

Diesel Daihatsu mini truck built by Toyota
Daihatsu truck in Indonesia | Anza Media via iStockPhoto

Akio Toyoda is the grandson of the automaker’s founder and, after years as CEO, is now the chairman of the board. He called a press conference Tuesday and apologized personally for the company’s actions.

“My job is to steer the way for where the overall group should go.” He vowed to return to the company’s original mission: empowering the plant workers “to make good cars that lead to people’s happiness.”