TOKYO (Reuters) -Toyota Motor Corp said on Tuesday both the president and chairman of Daihatsu Motor will step down almost a year after the small-car unit said it had rigged collision safety-tests.
The departures are among the most drastic changes Daihatsu has made so far, as Toyota (NYSE:TM) seeks to return the brand to its roots as one of Japan's most iconic compact car makers.
Toyota faces a potential hit to its reputation from the safety certification lapses at Daihatsu, as well as separate governance issues at truck maker Hino Motors and affiliate Toyota Industries (OTC:TYIDF).
The scandals at the three companies triggered a rare apology of Toyota Chairman Akio Toyoda last month.
In a statement, the world's top-selling automaker said its chief executive officer for the Latin America and Caribbean region, Masahiro Inoue, will replace Soichiro Okudaira as Daihatsu's president effective March 1.
Daihatsu's chairman, Sunao Matsubayashi, will also step down and will not be replaced, Toyota added.
The outgoing Okudaira had worked at Toyota for nearly four decades before becoming president of Daihatsu in 2017, a year after it became a wholly owned Toyota subsidiary.
Toyota Chief Executive Koji Sato told reporters, however, that the organisational change at Daihatsu was not carried out as a punishment for the outgoing executives.
In volume terms, Daihatsu accounted for 7% of Toyota's total group sales of 11.2 million vehicles in 2023, including those of the luxury Lexus brand and Hino Motors.
Given the misconduct over the safety test certification applications, Daihatsu also will be removed from a commercial vehicle partnership known as the Commercial Japan Partnership Technologies (CJPT), the automaker said in a separate statement.
The partnership was established in April 2021 by Toyota, Hino and Isuzu Motors to facilitate technology development for commercial vehicles. Suzuki Motor and Daihatsu joined in July the same year.
Daihatsu's 10% equity stake in the partnership will be transferred to Toyota, the statement said.