Toyota unit Hino halts light truck shipments as data scandal widens

© Reuters. FILE PHOTO: Hino Motors Ltd displays its new Hybrid Profia, a diesel-hybrid version of its large commercial truck model at its R&D Centre at Hino in Tokyo, Japan July 17, 2018. REUTERS/Naomi Tajitsu/File Photo

By Satoshi Sugiyama

TOKYO (Reuters) -Japan's Hino Motors will suspend shipments of small trucks after confirming that a widespread data falsification scandal included those models, it said on Monday, highlighting deepening problems at the Toyota Motor (NYSE:TM) Corp unit.

Truck and bus maker Hino's President Satoshi Ogiso told a news conference that during a transport ministry investigation additional misconduct regarding emissions was found that affects more than 76,000 vehicles.

The scandal, which came to light in March, was previously not believed to have impacted the smaller trucks, which have been sold since 2019.

Shares in Hino fell about 3.5% on Monday while the benchmark Nikkei 225 share average ended down 0.5%. Shares of Toyota, for whom the issue has been like a festering wound, closed unchanged. Toyota owns 50.1% of Hino.

"We are extremely disappointed that Hino again betrayed the expectations and trust of its stakeholders," Toyota President Akio Toyoda said in a statement.

Hino said in a statement that some 76,694 vehicles of its Dutro small truck model were impacted, bringing the total number of vehicles involved in the scandal to more than 640,000.

The automaker said even though the engine for the small trucks was supposed to be tested at least two times at each measurement point, it only tested once at each site.

The latest shipment stoppage means that Hino will be pausing shipment of 60% of its vehicles for the year, a spokesperson said. It will continue to ship Dutro's 1.5 T truck model since Toyota makes its engines, the spokesperson added. Hino sold just 187 units of the model in the 2021 financial year.

Hino's Ogiso said the vehicle maker was checking the impact to earnings from the additional misconduct, adding that it had not found instances of vehicles exceeding emissions limits and the misconduct was due to lack of understanding of regulations.

"As an automobile manufacturer, it is absolutely necessary for us to have a thorough understanding of the rules and regulations in order to release vehicles," Ogiso said. "I have explained that (the misconduct) was unintentional, but I have no intention of saying that because it was unintentional, it is OK."

He also said it was "indefensible" that the additional falsification was unearthed by the transport ministry, not the company nor its special investigation committee set up to investigate the whole issue.

A company-commissioned panel said in a report this month Hino had falsified emissions data on some engines going back to at least 2003, or more than a decade earlier than previously indicated.

Hino blamed an inward-looking corporate culture and a management failure to engage sufficiently with workers that led to an environment that put greater priority on achieving schedules and numerical targets than following processes.

The vehicle maker also falsely reported to the transport ministry there were no improper incidents in emissions and fuel efficiency tests at the time of receiving certification in 2016, following the revelation of Mitsubishi Motors (OTC:MMTOF) Corp's mileage cheating scandal.