Toyota’s Daihatsu to compensate suppliers over output halt

TOKYO (Reuters) – Toyota Motor (NYSE:)’s small car unit Daihatsu Motor will compensate 423 domestic suppliers with which it has direct business relations as its plants in Japan remain idled due to a safety scandal, a spokesperson said on Monday.

The small car specialist has halted production in Japan until the end of next month, the spokesperson said.

The company will consider compensating suppliers based on past business volumes and is working to assess the impact of the stoppage on its sprawling supplier network, he added.

Daihatsu said on Wednesday it halted shipments of all its vehicles after a safety investigation found issues involving 64 models, including almost two dozen sold under Toyota’s brand.

The company will work with its main suppliers to address the fallout from the scandal and may also help smaller subcontractors that do not receive compensation to access support funds from the industry ministry, the spokesperson added.

Daihatsu’s overseas operations focus heavily on Southeast Asia. It has resumed production of Perodua brand cars at two joint venture plants it operates with Malaysian automaker Perodua after getting regulatory clearance, the spokesperson said.

The company, which is fully owned by Toyota, said last week it had resumed shipments on Friday from its subsidiary in Indonesia, PT Astra Daihatsu Motor.