On This Day

Saturday 28th August 1937

83 years ago

The Toyota Motor Company Ltd, the world's largest automobile manufacturer, was founded. The marque's origins lie in the Japanese weaving industry when Sakichi Toyoda invented the world's first automatic loom and, subsequently, set up the Toyoda Spinning and Weaving Company in 1918. His invention reduced defects and increased yields since a loom stopped and would not go on producing imperfect fabric and using up thread after a problem occurred. This principle of designing equipment to stop automatically and call attention to problems immediately (jidoka) remains crucial to the Toyota Production System today. The loom impressed a British Company, the Platt Brothers, so much that, in 1929, they bought the production and sales rights for £100,000. Sakichi gave those proceeds to his son, Kiichiro, to develop automotive technology at Toyoda. This in turn led to the launch of the Company's first ever passenger car in 1936, the Model AA, and in 1937, the Toyota Motor Company was born. After World War II, Japan experienced extreme economic difficulty. Commercial passenger car production started in 1947 with the model SA. The company was on the brink of bankruptcy by the end of 1949, but the company eventually obtained a loan from a consortium of banks which stipulated an independent sales operation and elimination of "excess manpower". In June 1950, the company produced only 300 trucks and was on the verge of going out of business. The management announced layoffs and wage reductions, and in response the union went on a strike that lasted two months. The strike was resolved by an agreement that included layoffs and pay reductions but also the resignation of the president at the time, Kiichiro Toyoda. Toyoda was succeeded by Taizo Ishida, who was the chief executive of the Toyoda Automatic Loom company. The first few months of the Korean War resulted in an order of over 5,000 vehicles from the US military, and the company was revived. Ishida was credited for his focus on investment in equipment. One example was the construction of the Motomachi Plant in 1959, which gave Toyota a decisive lead over Nissan during the 1960s. In 1950, a separate sales company, Toyota Motor Sales Co., was established (which lasted until July 1982). In April 1956, the Toyopet dealer chain was established. In 1957, the Crown became the first Japanese car to be exported to the United States and Toyota's American and Brazilian divisions, Toyota Motor Sales Inc. and Toyota do Brasil S.A., were also established. Toyota began to expand in the 1960s with a new research and development facility, a presence in Thailand was established, the 10 millionth model was produced, a Deming Prize, and partnerships with Hino Motors and Daihatsu were also established. The first Toyota built outside Japan was in April 1963, at Melbourne, Australia. From 1963 until 1965, Australia was Toyota's biggest export market. By the end of the decade, Toyota had established a worldwide presence, as the company had exported its one-millionth unit. The first Japanese vehicles to arrive in North America were five Land Cruisers in El Salvador in May 1953. The first Toyotas sent to Europe were two Toyopet Tiaras sent to Finland for evaluation in June 1962, but no sales followed.The first European importer was Erla Auto Import A/S of Denmark, who brought in 190 Crowns following a May 1963 agreement to become the distributor for Denmark, Norway, and Sweden. The Netherlands followed in May 1964, and after having established toeholds in countries with little or no indigenous automobile production other markets followed in 1966. In 1968 Toyota established its first European CKD assembler, Salvador Caetano I.M.V.T. of Portugal. Toyota is the world's first automobile manufacturer to produce more than 10 million vehicles per year. It did so in 2012 according to OICA, and in 2013 according to company data.[8] As of July 2014, Toyota was the largest listed company in Japan by market capitalization (worth more than twice as much as #2-ranked SoftBank) and by revenue. Toyota is the world's market leader in sales of hybrid electric vehicles, and one of the largest companies to encourage the mass-market adoption of hybrid vehicles across the globe. Cumulative global sales of Toyota and Lexus hybrid passenger car models passed the 9 million milestone in April 2016.