Section 5. Wartime Research and Production

Item 10. The Automotive Industry Under a Controlled Economy

Control of the automobile manufacturing industry

Starting in 1937-the year that Toyota Motor Co., Ltd. was founded-Japan suffered from extreme shortages of materials under a wartime economy, making it difficult to expand production. Full-scale economic controls began when the National General Mobilization Law was promulgated on April 1, 1938 (the law came into effect on May 5 that year). This law was the fundamental wartime control law and imposed numerous regulations that controlled an extensive range of economic activities and the lives of the people. The controls relating to the automotive industry indicated in Table 1-18 were all established in 1938 alone.

Table 1-18. Main Regulations Governing the Automobile Business (1938)

Date of Promulgation
Cotton Allocation Control Regulations
March 1
The first ration coupon system
Gasoline and Heavy Oil Sale Control Regulations
March 7
Gasoline and other petroleum product ration coupon system
Steel Allocation Control Regulations
June 20
Goods Sale Price Control Regulations
July 9
Establishment of the official price system
Coal Allocation Control Regulations
September 19
Scrap Metal Allocation Control Regulations
November 21
Copper, Lead, Tin, and Other Metals Allocation Control Regulations
November 22

In addition, passenger cars were broadly restricted under a Ministry of Commerce and Industry notice issued on August 4, 1938. Toyota Motor Co., Ltd. suspended production of the Phaeton (canopy type) Model AB passenger car (including the Model ABR military vehicle) in September of that year, and all passenger car production for private demand was abandoned in January 1939.

Furthermore, the Materials Mobilization Plan (a budget of goods), the basis of controls on materials, went into effect in 1938. Under the plan, individual companies received materials allocated to them under the plan through associations of which they were members.

The two licensed automakers, Toyota Motor Co., Ltd. and Nissan Motor Co. Ltd. established the Japan Automobile Manufacturing Industry Association in December 1938 to acquire the materials distributed by the Machinery Industry Association, a higher-level organization.

The distribution methods varied depending on the material, and comprehensive industries that use a wide range of raw materials such as automobile manufacturing not only had to contend with extremely complicated procurement procedures, it was also difficult for some companies in the vast supporting parts industry to obtain raw materials. Furthermore, a Price Control Order was promulgated on October 20, 1939, and the prices of all goods were frozen effective September 18.

Despite these price controls, shortages of many materials developed and the controls were ineffective to prevent prices from rising steeply in response to actual supply and demand. To give one example, the sale price of a Toyota truck chassis (without driver's cab) for private use changed as shown in Table 1-19.

Table 1-19. Sales Prices of Toyota Truck Chassis (without cab) for Private Use (1937-1945)

(Unit: yen)

Ex-factory Delivery Price
Dealer's Retail Price
October 1937
May 1938
January 1939
September 1939
〃 (Prices frozen)
March 1941
4,400 (official price)
December 1941
4,530 ( 〃 )
September 1942
5,100 ( 〃 )
October 1943
5,735 ( 〃 )
June 1944
6,910 ( 〃 )
May 1945
12,500 ( 〃 )
A Twenty-Year History of Toyota, p.148; 'Toyota's Development: Price Hikes and Increases in Parts Production', Kogyo Hyoron magazine, p. 32, June 10, 1941. Frozen prices are prices from Kogyo Hyoron.

To ensure implementation of controls in accordance with national policy through the cooperation of government and the private sector, each industry was obligated to establish a control board. The Primary Industry Group Order came into effect on September 1, 1941, and 12 primary industries including steel, automobiles, and precision machinery were obligated to establish control boards on October 30. An order to establish the Automobile Control Association was issued to the automotive industry on November 26, and six automakers were appointed members of the board.

The founding general meeting of the Automobile Control Association was held on December 24, and Shigeyasu Suzuki of Diesel Automobile Industry Co., Ltd. was appointed chairman. The Automobile Control Association was responsible for allocating production materials, reorganizing automobile and automobile part allocation mechanisms, and centralized control of distribution. The Japan Auto Parts Industries Association, an organization of parts manufacturers throughout the country, was made a subsidiary organization of the Automobile Control Association, and the autobody industry and repair and maintenance industry were also incorporated into the control structure.

In January 1944, Toyota Motor Co., Ltd. was designated a munitions company and was placed under the complete control of the Ministry of Munitions. Kiichiro Toyoda was made a production manager representing a company designated under the Munitions Companies Law Enforcement Regulations.

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