Toyota unveils safety projects in wake of vehicle-testing violations

By Jada Ingleton

Stock hit a four-month low after reports that car shipments were suspended due to failure to follow safety standards

Toyota Motor North America's Collaborative Safety Research Center (CSRC) announced this week 15 new projects aimed at advancing automotive safety industrywide, just after the Japan-based vehicle maker suspended vehicle production due to safety certification misconduct.

In accordance with the company's five-year research phase, the projects' initiatives will work to further develop knowledge on driver behavior, crash avoidance and crash-injury mitigation.

"Through launching these projects, CSRC is responding to the latest trends in automotive industry and traffic safety," said CSRC Director Danil Prokhorov. "We are focused on nimbleness by addressing today's safety needs with new insights into future products, processes and policies that can help create a safe mobility society for tomorrow."

The announcement was made a day after Japan-based Toyota Motor Corp. (TM) (JP:7203) reportedly halted shipments and production of a number of vehicle models due to failures to follow government certification standards. Japan's top automaker had found outdated and falsified information about engine power, collision and other pedestrian and occupant protection tests, as reported by The Wall Street Journal.

Toyota Chairman Akio Toyoda reportedly issued a formal apology and assured consumers that the vehicles on the road are fully functioning and safe for drivers.

Meanwhile, Toyota Motor North America (TMNA), a subsidiary of Toyota Motor Corp., said its latest safety initiative is unrelated to the certification issues in Japan.

"The issues identified by TMC are based on a review of past certifications to Japanese requirements," the company told MarketWatch in an emailed statement. "Vehicles sold in North America are certified using different processes and to different standards applicable to North American markets."

Toyota's U.S.-listed stock closed Wednesday at a four-month low of $208.33. On Thursday, it bounced 1.2% in midday trading, but was still down 17.3% from its record close of $254.77 on March 22.

CRFA analyst Aaron Ho downgraded Toyota's stock to hold from buy, while cutting his price target to $210 from $260.

"Given its production halt due to safety concerns, we revise our opinion to hold as we see delivery being affected in 2024," Ho wrote in a recent note to clients.

Separately, CSRC will launch the Toyota Risk ATTEND Program (Anticipation Training to Enhance Novice Driving), an interactive self-paced learning plan that prepares new drivers for real-world driving scenarios before getting on the road.

"Through these outreach efforts, the projects have made meaningful contributions to help advance research and technology relating to the safe integration of future mobility solutions for all," TMNA said.

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06-06-24 1244ET

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