This year, Toyota Motor Corporation is celebrating its Diamond Jubilee by successfully entering its 75th year since its birth in the hands of Kiichiro Toyoda way back in the year 1937. The Japanese car giant’s official anniversary on November 3 is celebrated in line with the start of business at Toyota’s first automotive manufacturing facility, Koromo Plant, in 1938.
“Open the door, it’s a wide world out there” – Sakichi Toyoda
The initial baby steps of the Toyota as an entity took its root over a century ago with the forming of Toyoda Enterprise by Kiichiro’s father, Sakichi Toyoda, nicknamed as the “King of Inventors” and the “Thomas Edison of Japan”. Born during the age of modernisation in Japan, Sakichi could not ignore the wretched condition of his native village. At the stroke of his 20th birthday, Sakichi decided to contribute something substantial to the society and started to look for “something of consequence”.
The “something of consequence” appeared before him as he witnessed the hard manual labour of weaving and spinning cloth by his own mother. He mentioned: “I began thinking about ways to power the looms so that weaving could be done faster, and more cloth could be made at lower cost.” In 1926, Sakichi along with his son, Kiichiro, architected an automatic loom capable for mass production: the “Toyoda G-type Automatic Loom’. It was only the beginning of an empire.
The super efficiency of the new automatic loom equipped a single worker to operate 25 at the same time. Quite naturally, it quickly gained the attention of the world’s largest textile manufacturer, Platt Brothers & Co. Ltd. in England. In 1929, a company representative was endowed with the responsibility of finalising a patent agreement for the G-type, Sakichi’s son, Kiichiro, decided to personally go to England via the United States. He aim was to witness the development of the automotive industry over there.
1926 Toyoda G Type Automatic Loom
This trip to the United States had a deep impact upon Toyota’s formation as Kiichiro was deeply moved by the progress of automobile industry in that country. He set a target to build a car all by himself. Space was allocated exclusively this purpose at the Toyoda Automatic Loom Works and a team of engineers were formed. Paddling through rough water during the initial phase of engine designing, Kiichiro and his researchers ultimately emerged victorious.
The 1930s were a tricky decade to embark upon an entirely new avenue in industry. It was complicated by the shortage of required manpower and skill set. Fortune favoured the brave as Kiichiro succeeded in convincing Risaburo Toyoda – then in charge of Toyoda Automatic Loom Works – to form a dedicated Automobile Department within the company.
Kiichiro’s original vision of producing passenger vehicles on a mass scale suffered a jolt with the sound of war bugle. Government’s attention was centred on truck production for war purposes. Kiichiro shifted his attention to trucks. The Model G1 truck was completed in 1935 within six months of its development.
1938 Model AA Production
Along with the initiation of truck production, Kiichiro started to work on his major dream of building a passenger car. The prototype Model AA came out from the cradle in 1936. To finalise the brand name of the Model AA, the company organised a grand public contest. The winning entry out of 20,000 featured the Japanese characters for “Toyota”. The new design was associated with the spirit of speed and flaunted auspicious eight strokes of the characters. Toyota was born with a bang and the Model AA was the first car to boldly wear the new brand name. On August 28, 1937, Toyota Motor Company (today known as Toyota Motor Corporation) was established with Risaburo as its first President.
“I shall keep on struggling till I drop” – Kiichiro Toyoda
At the end of World War II, Japanese automobile industry was badly in need of improvement. By the end of 1945, severe employee crunch hit the company hard. Acute food shortage prompted Toyota’s Koromo Plant to cultivate crops on its own land besides pursuing other small-scale business ventures, such as selling pots and pans made from materials originally segregated for airplane production. It not only provided the food to the employees but also enabled the company to stay afloat during hard times.
Gifted with a visionary foresight, Kiichiro reshaped the Toyota’s aim after thoroughly observing post-war conditions in Japan, and mentioned: “This will be the era of the small car.” As early as October 1945, Toyota’s engineers embarked upon developing the four-cylinder, 1,000 cc, Type S engine. In 1947, Toyota’s first post-war passenger car, the two-door, 27 hp, Model SA fitted with a Type S engine was completed. The company immediately began reaching out to authorities for permission to restart production of passenger cars. The nickname given to the Model SA, “Toyopet”, became the trademark tag to be attached with Toyota’s small cars.
Business conditions at the fall of the 1950s turned from bad to worse as harsh depreciatory financial policies were imposed. It nipped the original plan of producing the cars on mass scale. The company condition deteriorated and the management was finding it quite challenging to regularly pay its employees. However, Toyota never turned away form the path of its pro-employee policy as it adhered to its non-dismissal policy, eventually negotiating a 10% salary reduction with the employees to apply balm to the injury. Eiji Toyoda, then Director of Toyota Motor Company, rejected to follow employee retrenchment policy in favour of maintaining a cordial relationship of trust with employees.
Labour disputes were dramatically solved when Kiichiro Toyoda along with several top executives resigned in a display of solidarity towards the employees. This action triggered a wave of voluntary retirements that enabled the company to shave off its excess hands and remain competitive during an era of financial turbulence.
“The ideal conditions for making things are created when machines, facilities and people work together to add value without generating any waste” – Kiichiro Toyoda
The company’s aim was concentrated on increasing efficiency in the 1950s. Even though Kiichiro incorporated his Just-in-Time method into the blueprints of the Koromo Plant, full implementation was never realised with wartime disruption.
In that juncture Taiichi Ohno entered. He was the Manager of Final Assembly at that time in the Manufacturing Department. Ohno was moved by Sakichi’s automatic loom that found out broken threads and stopped production, thus pulling the plug on wasteful defective products besides improving quality and efficiency. In a bid to improve efficiency, Ohno introduced a number of innovations to the production line ‘jidoka’, (automation with a human touch).
Employees were able to pull on an andon cord to stop the production line in response to the detection of problems. It ensured drawing a full stop to the technical snags from further deteriorating. The Kanban System, using cards to indicate where and when certain parts are used, strengthened Just-in-Time and reduced the need to stockpile parts which are delivered when needed.
The new Toyota Production System, a combination of Kiichiro’s Just-in-Time and Ohno’s jidoka, was implemented in all Toyota plants and continues to be the cornerstone of Toyota’s production facilities worldwide.
“Good thinking, good products” – Toyota slogan adopted in 1953
During the first half of the 1960s, Toyota worked towards bringing production quality to an internationally competitive level by introducing the total quality control system. Quality targets were set for each process and employees at each stage were responsible for analysing and determining the cause of defects, as well as devising countermeasures. These new production methods created built-in quality.
In 1965, Toyota was awarded the Deming Application Prize established by the Union of Japanese Scientists and Engineers to recognise outstanding improvements in total quality control.
“Oh, What a Feeling!” – early Toyota Motor Sales, USA tag line
A dawn emerged in 1957 when two Toyota Crown samples made their way to Los Angeles. They carried the tag as maiden Japanese passenger car to be exported to North America. Close to the heels of this epic chapter, Toyota Motor Sales, U.S.A. was formed and sales began with a modest 288 vehicles in 1958. First debuted in 1951 as the Model BJ and being tagged with its legendary name in 1955, the Toyota Land Cruiser quickly gained attention as a durable, all-terrain vehicle.
1972 Cumulative Toyota Production Reaches 10 Million Units
In the next decade the Toyota Corona emerged as Toyota’s first popular car in America in the year 1966. It ensured threefold jump in sales, resulting in increase of 20,000 units in its very opening year. By the next year, Toyota had become the third best-selling import brand. With cumulative sales figure touching colossal one million units in 1972, Toyota became the number one import brand in 1975.
Today, Toyota operates 14 manufacturing facilities in North America with local production facility, touching the 25 million mark recently.
“The European market holds much potential for Toyota, and it demands only the finest products” – Shoichiro Toyoda
Boldly entering into the European market and making its presence felt in that continent always remained a dream of this car maker. Toyota tasted success in this direction as early as 1960 as it started to export vehicles to Malta and Cyprus, albeit on a small scale and at the time considered under the company’s Middle East operations. Things dramatically changed for better with a surprise visitor to Toyota’s Tokyo Office in 1962 that opened the gateway of Toyota’s expansion into Europe.
The visitor was none other than Walther Krohn, then President of Erla Auto Import A/S in Denmark. An importer of a local European brand, Krohn urged Toyota to export a sample right-hand-drive Toyota Crown to Denmark, albeit the company was of the beief that Toyota was not fully ready to make an imprint in a new market. The model turned out to be a star at local motor shows that triggered an increase in export volume to 400 units in 1963 and 1,500 units in 1964.
It was a bitter sweet moment for Toyota at this juncture. Though early contact with Finland’s Korpivaara Oy was made in as early as 1962, stable relations failed to pick up due to poor road test results. However, two years later, while visiting the Motomachi Plant, Korpivaara Oy’s President personally performed an endurance test of the Toyota Corona around a test course. The positive outcomes prompted him to sign for an order of 2,000 units on the spot.
Distributor agreements followed in quick succession with Louwman & Parqui B.V. of the Netherlands in 1964 and N.V. International Motor Company S.A. of Belgium in 1966. Toyota AG in Switzerland was created in 1966 following negotiations between Toyota and Emil Frey Ltd., a car repair business and importer.
The main USP of Toyota vehicles during the early years in Europe were the models’ novelty factor and simplicity in mechanical design. These two key factors made the car relatively trouble-free. Innovative promotional and marketing activities had to be undertaken by the local distributors to suit the interests of their own regions.
In Denmark and Finland, Toyota distributors took the vehicles to local motor shows. The Belgium distributor offered a bold three-year warranty and organised the “My Toyota is Fantastic” campaign. Walter Frey, President of Toyota AG, personally entered local rallies with Toyota vehicles. In one of the most innovative campaign, Louwman & Parqui of the Netherlands used trained parrots in the zoo to repeat: “Buy a Toyota.”
In 1964, Toyota established its maiden European representative office in Copenhagen, Denmark. Five years on, the office was shifted to Brussels, Belgium that would later become Toyota Motor Europe.
Toyota had to face uphill task in the markets of the Federal Republic of Germany, France and Great Britain mainly due to each country’s well-established local manufacturer base. Until 1970, annual import volume touched around 1,000 units in Great Britain. Things changed, thanks to the improved marketing condition of Motor Imports Co., currently Toyota (GB) Ltd. that ensured sales of 6,800 units in 1971 and around 19,000 in 1973.
1968 Toyota Maru No. 1 Begins Vehicle Shipping Service
Toyota’s maiden European production base took its root way back in 1968 with the assembly of Toyota Corolla at Salvador Caetano I.M.V.T., S.A., a Portuguese bus manufacturer. Within the next four years the vehicle assembly touched 10,000 units, including the Corona and Dyna truck as well as the Corolla.
The 1970s presented both challenge and opportunity to Toyota in Europe. The oil crisis during the time badly affected the company as its sales decreased from 163,000 units in 1973 to 138,000 in 1974. The outcome of the crisis varied from country to country that was directly associated with the structure of sales network in each market. While sales in Norway and Sweden witnessed positive trends, other areas recorded decrease in sales by as much as 40 per cent.
The harshest effects of the business turmoil were felt in the Federal Republic of Germany forcing Toyota Motor Company to take over the ownership of its local distributor, Deutsche Toyota-Vetrieb GmbH & Co. KG in 1974. Conditions for Toyota in Germany improved two years later, resulting in the recapitalisation of Deutsche Toyota-Vetrieb which was renamed Toyota Deutschland GmbH.
At the crucial phase, the need was felt to develop cars locally for the German market. Moreover, the company also decided to actively participate in European motorsports such as rallies and circuit races for aggressive brand promotion. In 1979, Toyota Team Europe moved from Brussels to Cologne, Germany that later became Toyota Motorsport GmbH. The team’s Toyota Celica Twincam Turbo came out victorious in all six rounds of the World Rally Championship in Africa between 1983 and 1986.
Toyotaonce again embarked upon smooth drive in Europe towards the second half of the 1970s. 1986 was the iconic year when the company touched its one million European export milestone. During this comeback phase feedback from local distributors proved crucial as it helped Toyota Motor Company to recognise the importance of developing competitive and attractive vehicles to satisfy the demands of the European markets, from the cobbled roads of Belgium to the winding mountain roads of Switzerland.
In 1978, Inchcape PLC took over the reins of Toyota (GB) Ltd, followed by Belgium’s International Motors in 1979. With the launch of the Toyota Starlet in 1978, Tercel and Corolla the following year, Toyota’s European sales reached the 300,000 mark for the first time with sales of 324,000 units in 1980.
1982 was a reunion year for Toyota as Toyota Motor Company and Toyota Motor Sales in Japan, the sales and marketing entity that bid adieu to each other during the 1950s financial crisis reunited after 32 years of separation. Jointly they formed the current Toyota Motor Corporation in 1982.
Toyota’s annual European sales remained static around 290,000 units between 1982 and 1984. By the end of 1984, concrete plans were formulated to improve the condition. And take the figure to 400.000 units. New models, such as the Toyota MR2 in 1985, Supra in 1986 and Celica in 1987, were introduced in Europe to raise Toyota’s image. The sales plan hauled Toyota’s European annual sales to 422,000 units in 1986 and over 440,000 in 1987.
Right from its early European operations, Toyota decided to work in unison with local manufacturers. Working in this direction, Toyota started to supply parts to British sports car manufacturer, Lotus, in 1982.
In 1987, Toyota and Volkswagen finalised a joint production venture to manufacture the Toyota Hilux at the German manufacturer’s Hannover Plant. Both organisations marketed the product in Europe with Volkswagen christening their version ‘Taro’.
With renewed vigour to deliver products suitable for European needs, a new Toyota Technical Centre for Europe was set up in Zaventem, Belgium in 1987. Known today as Toyota Motor Europe Technical Centre, the unit has now been entrusted with the task of becoming Toyota’s global planning centre for the key A, B and C segments. By the close of the decade, Toyota also established what is known today as Toyota Europe Design Development (ED²) design centre.
Toyota Motor Corporation made its presence felt in the premium automotive market with the introductions of the Lexus brand in 1989. The flagship Lexus LS 400, launched at the North American International Auto Show in Detroit, entered the European market in 1990.
During the 1990s, Toyota’s European local production facility expanded following the start of production at Toyota Motor Manufacturing United Kingdom twenty years ago that eventually became Toyota Motor Manufacturing Turkey in 1994. The first model produced in the United Kingdom was the Toyota Carina E.
As a solution to address future challenges and fuel-saving measure, Toyota Prius introduced in 1997 as a Japan-only model carries the tag of the world’s maiden mass-produced petrol-electric full hybrid vehicle. The model entered Europe at the turn of the Millennium. Fifteen years following the launch of first Prius, sales of Toyota and Lexus hybrid vehicles worldwide has crossed four million, with close to 500,000 units sold in Europe since 2000.
By 1999, Toyota had bagged the inaugural “International Engine of the Year” award for both the Prius and the then newly launched first generation Toyota Yaris. The Yaris went on to be honoured with the prestigious “European Car of the Year” title in 2000.
Some Key Events:
2001: Production of the Yaris was shifted to local facility in Europe at Toyota Motor Manufacturing France.
2002: Production initiated at Toyota Motor Manufacturing Poland for engines and transmissions
2005: production started at Toyota Motor Industries Poland in 2005, also an engine producer.
2005: Toyota initiated joint venture manufacturing facility in the Czech Republic with PSA Peugeot Citroën, Toyota Peugeot Citroën Automobile, began production of the Toyota AYGO, Citroën C1 and Peugeot 107.
2005: The second generation Toyota Prius was honoured with the “European Car of the Year”. Sales in Europe touched historic one million units for the first time.
“Toyota will lead the way to the future of mobility, enriching lives around the world with the safest and most responsible ways of moving people. We will meet challenging goals by engaging the talent and passion of people, who believe there is always a better way.”, said Akio Toyoda
Today, Toyota runs 30 National Sales and Marketing Companies in Europe encompassing some 56 countries, supported by 14 parts logistics and 11 vehicle logistics centres. Close to 13 million Toyota and Lexus vehicles are plying on the European roads as per the latest data.
75 years since the revolutionary birth of an automobile giant in the hands of Kiichiro Toyoda, Toyota Motor Corporation today employs over 300,000 people worldwide and has produced over 200 million vehicles.
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