The scandal at Daihatsu Motors worsens daily.

Faked safety tests were first thought limited; they now appear to impact virtually its entire product line, forcing the shutdown of all its production facilities in Japan and jeopardizing the company’s reputation in all the markets in which it sells vehicles. Investigations indicate that improprieties stretch as far back as 1989, indicating a profound problem with the company’s culture.

An official investigation suggests that competitive pressures undercut one of the guiding principles of the Toyota group (of which Daihatsu is a member): that of "Genchi genbutsu," or “Go and see for yourself,” the ongoing process of on-site learning and problem-solving. This failure needs to be taken to heart not only by Toyota’s executives but by those of all Japanese manufacturers. This country’s reputation as home to the world’s leading manufacturers is at risk if intensifying competition is driving its flagship companies to cut corners.