Toyota’s Daihatsu will compensate its suppliers for the production suspension.

Toyota's Daihatsu will compensate its suppliers for the production suspension.

On Monday, a spokesperson for automobile manufacturer Daihatsu announced that a Japanese automotive behemoth Toyota subsidiary will compensate 423 domestic suppliers with direct business relations as its plants in Japan remain idle due to a safety scandal. Toyota’s Daihatsu will compensate its suppliers for the production suspension.

A spokesperson stated that the compact car specialist had suspended production in Japan until the end of the following month.

He added that the organization is evaluating the repercussions of the shutdown on its vast supplier network and will contemplate compensating suppliers by historical business volumes.

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Daihatsu announced on Wednesday that it had ceased all vehicle shipments in the wake of a safety investigation that uncovered defects in 64 models, nearly two dozen of which were sold under the Toyota brand.

The spokesperson added that the company will collaborate with its primary suppliers to mitigate the scandal’s repercussions and may also assist smaller subcontractors that do not receive compensation in gaining access to support funds from the Industry Ministry.

Daihatsu’s overseas operations are primarily concentrated in Southeast Asia. After receiving regulatory approval, it has resumed production of Perodua brand automobiles at two joint venture factories it operates with Malaysian automaker Perodua, according to a spokesperson.

The company, wholly owned by Toyota, announced last week that shipments from its Indonesian subsidiary, PT Astra Daihatsu Motor, had resumed on Friday.

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