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The first Japanese manufacturer to offer a car in the United States, Toyota Motor Corporation is one of world’s three largest auto builders. With their reputation for value, durability, and reliability, Toyota’s cars are among the best selling in the world. In fact, Toyota’s Camry automobiles routinely sell an average of 400,000 units annually—in the United States alone. That’s more sales of one model than many car companies sell of their entire product range—combined.
The company was spun off from Toyota Industries Corporation in 1937, specifically to build cars. Sakicihi Toyoda had founded Toyota Industries in 1926 as Toyoda Automatic Loom Works, Ltd. The company was started to take advantage of his innovations in manual and machine powered textile looms. Born in Kosai, Shizuoka in February of 1867, Toyoda is considered one of Japan’s pre-eminent inventors and the founder of the Japanese industrial revolution. Among his innovations, Toyoda is credited with the development of one of the founding tenets of lean methodologies of problem solving—the “5 Whys”.
According to the 5 Whys philosophy, when a problem occurs one should ask why it happened five times before attempting a fix. Then one should use the insights gained from the questioning to establish a procedure to keep the problem from happening again. This method proved particularly effective at solving problems, improving quality, and reducing costs—all of which made Toyota Motor Corporation the juggernaut it eventually came to be.
When Toyoda died in 1930, his son-in-law Risaburo took over the operation of the company. He in turn was convinced by Toyoda’s oldest son Kiichiro to establish the Automobile Department of the company in 1933 to build cars. To get started, Kiichiro bought a new Chevrolet and assembled a team of engineers to reverse-engineer it. In 1934, the company built its first automobile engine. The prototype of its first car was completed in 1935. Its first truck was unveiled that year as well. The company’s first passenger car to market was the 1936 Toyoda Model AA.
A key pillar of the success of the company was established in 1935, with the publishing of The Toyoda Precepts. The guiding principles by which the company is run to this day, The Toyoda Precepts are:
1. Be contributive to the development and welfare of the country by working together, regardless of position, in faithfully fulfilling your duties.
2. Be ahead of the times through endless creativity, inquisitiveness, and pursuit of improvement.
3. Br practical and avoid frivolity.
4. Be kind and generous; strive to create a warm, homelike atmosphere.
5. Be reverent, and show gratitude for things great and small in thought and deed.
In 1937, Toyota Motor Company, Ltd. was established. The name was changed from the Toyoda family name to “Toyota” for a number of reasons. Among them, eight brush strokes comprise the word “Toyota” in Japanese calligraphy, which is a lucky number. Further, the word “Toyoda” translates to mean “fertile rice fields”. The company wished to avoid any association with farming, which was considered old-fashioned. The name-change also accomplished this.
Born in June of 1894, Kiichiro Toyoda was actually responsible for the decision to branch the company business into building cars. Although considered a risky venture, it proved quite successful—until the end of World War II. A serious recession gripped the Japanese economy after the war and Toyota Motor Company found itself poised to slip into bankruptcy. In an attempt to turn things around Kiichiro had the company announce a significant round of layoffs. However, the workers went on strike instead and very nearly killed the company. To help resolve the conflict, Kiichiro resigned from Toyota Motor Company, Ltd. in 1950.
Taizo Ishida followed him. Ishida’s big contrubtion was his decision to focus on investment in infrastructure. This proved very timely, for when the Korean War started the company was in an excellent position to produce some 5,000 vehicles for the U.S. military. Ishida also oversaw the development of the company’s Motomachi Plant in 1959, which gave it a substantial home-market competitive advantage.
The corporation also established the Toyota Motor Sales Co. in 1950, offering the Toyopet line of cars and trucks. In fact, the first Toyota models offered in the U.S. came in under the name “Toyopet” in 1957. While that nameplate was quite successful in Japan, in the U.S. it conjured visions of toys and pets, which didn’t go over so well in the American automotive marketplace. Additionally, the Toyopet Crown was woefully underpowered for the U.S. market. Those factors, coupled with a price well north of VW’s Beetle and Rambler’s American left the Crown pretty much bolted to the floor of Toyota’s new dealerships.
The company soldiered on however. In 1965, the Toyota Corona, designed specifically for the American market, became the breakthrough Toyota automobile for the United States. With a 90-horsepower engine, air conditioning, and an automatic transmission—in addition to great fuel economy and attractive styling, the Corona struck a chord with American car buyers.
The smaller Corolla followed the Corona. When the energy crisis of the 1970’s struck, Toyota was perfectly positioned to benefit from consumers’ desire for more fuel-efficient vehicles. The company prospered considerably during those years. Then, when these new customers saw how reliable their new Toyotas were on top of everything else, they became repeat customers.
The company was off and running.
Other models soon followed including the sporty Celica, which eventually evolved into the Camry. In fact, the first Camry models were known as the Celica Camry in Japan, before being established as a separate model line in 1982 and debuting in the U.S. in 1983 as a replacement for the Corona.
In the 1980’s Toyota really hit its stride in the United States, with a nearly full line of cars trucks and SUVs. The company even offered a mid-engine sports car, called the Toyota MR2. Its 4Runner SUV also proved to be a highly popular item. Moving into the 1990’s, the lineup of Toyota automobiles finally included a full-size family sedan in the Avalon. By the end of the 1990’s Toyota was also on the leading edge of fuel-efficient transportation with the gasoline/electric powered Toyota Prius model, around which an entire family of vehicles is built now. Further, the company has successfully entered the luxury market as well with its Lexus brand.