The latest safety scandal may not affect Perodua Axia and Toyota Vios sales in the long term.
Yesterday, Daihatsu and Toyota both confirmed wrongdoings in crash safety tests for DNGA-based vehicles that were recently launched. What happened was “the inside lining of the front seat door was improperly modified, and that there was a violation of the side collision test procedures and methods stipulated by regulations.” This was done on the Toyota Vios (cited as the Yaris Ativ, which its name in Thailand) and the Perodua Axia. Neither of these vehicles goes by the Daihatsu name, but the engineering work and the wrongdoing itself is on Daihatsu. A whistleblower stepped forward to reveal the wrongdoing and both Toyota and Daihatsu made the revelations public and apologised and are coming up with a solution.
The reaction so far has been pretty intense on the internet. Many have compared it to Honda’s Takata airbag scandal and some may even catch a whiff of VW’s dieselgate in the air. In some ways, it’s closer to in nature to the Mitsubishi kei car emissions misreport, though the gamble in this case is with customer safety, it’s far more serious.
That being said, Toyota and Daihatsu will be resubmitting the affected vehicles for re-evaluation. They are confident that the cars are still safe enough to drive and have not put a recall notice in place.
Will This Affect Sales & Deliveries
In the short term, shipments have been suspended in Thailand, Indonesia, Saudi Arabia, the United Arab Emirates, Kuwait and Mexico.
We are still waiting for UMW Toyota Motor and Perodua to issue a press statement as they locally-assemble the affected vehicles for domestic sale. If they do suspend deliveries, then we will see a big drop in sales until the cars are retested and approved by regulators.
Update: both Perodua and UMW Toyota Motor confirm that Vios and Axia sales will not be suspended. In the case of the Vios, subsequent testing has validated they meet UN-R95 certification. Meanwhile, for the Axia, UN-R95 certification is still intact despite what happened.
However, in the medium to long-term, will sales recover? We think yes, at least for the Malaysian market. The Perodua Axia does not have a direct competitor here currently. There are many buyers who will still be lining up and waiting for the Axia in the coming months. A few may decide to top up and get a Myvi instead as the price difference is not too large. As for the Toyota Vios, this product already exists in a pretty saturated market. What it does have is its ‘new’ factor. This is the first all-new Vios in a very long time. It has only been on sale in Malaysia for a few months, so we’re confident there are still plenty who will snap one up as soon as it’s available.
What’s Important Now
For Toyota, Daihatsu and Perodua, the response over the coming weeks will be extremely important. They need to proactively take control of the narrative and regain the trust of their customer and fan base. It’s not going to be easy and the stain will be there for a very long time, but the longer they take to come up with a response, the more the public are going to form their own opinions on the matter.
