Daihatsu Motor Company, the small car unit of Japan’s Toyota Motor Group, has confirmed it will compensate thousands of direct and indirect suppliers for their loss of sales after it halted production of all models last month.

The halt to Daihatsu production came after an independent investigation found a large number of “irregularities” in the company’s safety testing procedures.

An independent third-party investigation commissioned by the automaker revealed that safety tests and other procedures on a large number of new vehicle models had been widely and systematically falsified by the company’s staff and its suppliers since 1989.

The automaker halted production of its entire range of 64 vehicle models and three engines on 20th December, immediately after the results of the investigation were revealed, including 22 models sold under the Toyota badge and also some Mazda- and Subaru-branded models. It had also suspended shipments in Indonesia and Malaysia, but deliveries in these countries resumed just a few days later.

Last week the Ikeda-based company confirmed that it in addition to the 423 direct component suppliers already deemed eligible for compensation for their loss of sales, around 4,000 indirect suppliers will also qualify for compensation as will an additional 1,000 companies that also do business with the automaker. The compensation programme only covers domestic suppliers, according to a company spokesperson.

According to Teikoku Databank Ltd, there are more than 8,000 Japan-based companies that supply products and services directly and indirectly to Daihatsu, which together generate over JPY2trn (US$15bn) in annual sales. Daihatsu has been in discussion with local financial institutions to raise funds for the compensation, while Toyota Motor said it will also provide financial support.

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By GlobalData