Giant Japanese car companies are suspected of falsifying safety data, prompting the Ministry of Transport to raid major manufacturers such as Toyota, which other companies such as Honda, Mazda, and Suzuki will also be subject to inspection by the authorities.
Some companies were forced to temporarily stop shipments or sales of some types of vehicles, due to violations that ranged between providing false data, performing tests under inappropriate conditions, and modification of results in crash tests.
Cars accounted for 17.8 percent of the total volume of Japanese exports in the first five months of 2024. Statistics indicate that Toyota leads the global automobile market with a share exceeding 11 percent of the total sales of more than 80 million vehicles worldwide in 2022.
What about the impact on Saudi Arabia? Japanese, Korean and Chinese brands dominate the market share with more than 50 percent of sales. According to the automotive sector report issued by the Saudi Industrial Center, Toyota tops the list of the best-selling brands by 29 percent.
Therefore, the Kingdom represents an important market for Japanese automobile exports. According to available figures, the country imported Japanese cars worth $2.6 billion in 2022.
Murad Al-Jarrah, former director general of a leading car sales company, said that this scandal will have several effects on the prices of Toyota cars and Japanese vehicles in general.
This is due to a number of factors, including decreased consumer confidence, as he noted that falsifying safety data will likely affect consumers’ trust in the brand.
Another factor, according to Al-Jarrah, is increased regulatory oversight. Saudi regulators are likely to increase inspection and testing requirements for Toyota vehicles, which may result in additional costs incurred by the consumers.
Moreover, Toyota may be forced to recall and repair the affected vehicles in Saudi Arabia, which will lead to significant costs that may be reflected in higher prices.
Finally, Al-Jarrah said that other car companies may seek to benefit from Toyota’s damaged reputation by offering more competitive alternatives in the Saudi market, especially in light of the massive production coming from China.
