An economic downturn and a safety test scandal linked to Toyota’s subsidiary have piled pressure on Toyota Vietnam.

Although Toyota, a Japanese multinational automobile manufacturer, dominates the Vietnamese auto market and has gained the trust of consumers, the brand is facing huge challenges.

Toyota Vietnam remained the best-selling brand in the auto market, selling 59,207 units, including Toyota and Lexus cars, in 2023, while Hyundai Thanh Cong sold 57,683 autos last year, according to reports recently released by the Vietnam Automobile Manufacturers' Association (VAMA) and Hyundai Thanh Cong.

However, if the number of Lexus cars finding buyers was excluded from Toyota’s sales, Hyundai’s turnover would exceed Toyota’s by nearly 300 units.

Despite the narrow gap, the ongoing global and local economic slowdown is expected to hamper the growth of Toyota Vietnam in 2024.

Dipping trade turnover, soaring debts, and geopolitical uncertainty have taken a heavy toll on the global auto industry, challenging giant Toyota.

In Vietnam, the 2023 sales of the Japanese brand plunged 37 percent, but the automaker topped VAMA members, outstripping South Korea’s Kia Motors, which came second with 16,640 cars sold.

Its Vios and Corolla Cross models were listed among the 10 best-sellers in Vietnam last year.

A safety test scandal associated with Toyota’s unit is another blow to the brand in the Vietnamese market.

Toyota affiliate Daihatsu, known for manufacturing small passenger cars, was found tampering with safety tests last year.

In particular, the misconduct at Daihatsu was brought to light in April 2023.

The Japanese automaker quickly established an independent third-party committee to investigate the case.

The investigation into its unit related to rigged collision-safety tests found issues going back decades, reported Reuters.

Production at Daihatsu's factories in Japan has been halted since late last month after the independent panel that had been investigating the company found issues involving 64 models, including almost two dozen sold under Toyota's brand.

Among scandal-hit models was Toyota Wigo.

It was not until June last year that the Toyota Wigo was manufactured, and no Wigo cars have been delivered to Vietnamese customers so far.

Meanwhile, Toyota Vios 2023 cars put on sale in Vietnam were the facelift versions, so they were not plagued by the misconduct.

In spite of no direct influence on Vietnamese customers, the scandal hitting Toyota has dented the Japanese automaker’s reputation and reduced trust in Toyota Vietnam.

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