Section 2. Toyota Motor Co., Ltd., Toyota Motor Sales Co., Ltd. to Form Toyota Motor Corporation

Item 4. Driving Forward Quality Control Activities

Quality control activities (sometimes abbreviated to "QC"), which were actively being pursed among dealers around the time of the merger of Toyota Motor Co., Ltd. and Toyota Motor Sales Co., Ltd., took off from around this same period as an approach to improving management systems.

The introduction of quality control to dealers, prompted by an awareness of the need for coordination between manufacturing and sales and for strengthening of sales capabilities, was decided at the end of 1980 at a joint policy meeting between Toyota Motor Co., Ltd. and Toyota Motor Sales Co., Ltd. In response, in February 1981, a an office to promote QC activities was set up within Toyota Motor Sales Co., Ltd. to start preparing for the introduction of quality control. In March 1982, the first executive study meeting for representatives of dealers nationwide was held, and quality control activities among dealers began.

By the beginning of 1983, the year following the merger of Toyota Motor Co., Ltd. and Toyota Motor Sales Co., Ltd., approximately 90 percent of all dealers, including parts distributors and others, had introduced quality control in some form. Responding to this increasingly widespread adoption of quality control, in February 1983 Toyota established the new QC Promotion Department responsible for promoting quality control Toyota-wide, and an award system was instituted under the title "Toyota Dealers QC Promotion Prize". Additionally, from 1984, the National QC Convention of Toyota Dealer was introduced as a forum for presenting the benefits of quality control and awarding prizes. As a result, by 1997, approximately 60 percent of dealers in Japan had received the Toyota Dealers QC Promotion Prize, a sign of the steady raising of levels of quality across the board.

The rollout to sales functions of quality control, which was seen at the time as a quality control method for manufacturing divisions, was an unusual step and attracted attention from many sectors of industry. The pursuit of quality, which is a founding principle of Toyota, was reaffirmed on the occasion of the merger of Toyota Motor Co., Ltd. and Toyota Motor Sales Co., Ltd, and brought major benefits to sales divisions also.

Meanwhile, along with the establishment of the TQC Promotion Department President Shoichiro Toyoda announced a policy for the management team to take the lead in tackling quality control. Accordingly, the 1st QC Study Group, attended by all board members, was held over three days and two nights in June 1983. The themes for discussion, which included "integration and increased efficiency in sales, product planning, development, and production" and "strengthening of dealer corporate systems", focused on internal coordination and coordination with dealer, as that was important immediately after the merger. From that year on, the QC training seminar for executives meeting came to be held every year, and in 1991, its ninth year, the group was renamed the Executive Study Group.

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