Section 9. Preparations for Mass Production and Mass Sales

Item 1. Expanding Sales Structures

Tokyo Toyopet Motor Sales Co., Ltd. Established

GHQ removed the restrictions on passenger car production in October 1949. The motor vehicle sales allocation system was disbanded in November, and sales became completely unregulated. Toyota Motor Co., Ltd. immediately began manufacturing Model SD passenger cars chassis using a truck chassis, and launched the Toyopet Crown and Toyopet Master as full-fledged passenger cars in 1955.

Sales volumes of Toyota vehicles from 1950 to 1955 are shown in Table 1-45. Passenger cars sales shot up from 548 units to 7,055 units, a 13-fold increase. In addition, passenger car sales increased from 6 percent of all sales in 1950 to more than 30 percent in 1955.

Table 1-45. Sales of Toyota Vehicles (1950-1955)

Toyota Passenger Cars
All Toyota Vehicles
Total Number of Registrations
a/b
Vehicles (a)
Rate of increase
Vehicles (b)
Rate of increase
No. of units
Rate of increase
1950
548
9,228
26,813
5.9%
1951
1,718
313.5%
10,126
9.7%
28,200
5.2%
17.0%
1952
2,102
22.4%
14,364
41.9%
37,235
32.0%
14.6%
1953
3,530
67.9%
14,883
3.6%
48,860
31.2%
23.7%
1954
4,217
19.5%
20,768
39.5%
62,370
27.7%
20.3%
1955
7,055
67.3%
22,240
7.1%
64,528
3.5%
31.7%
Source:
A Thirty-Year History of Toyota, appendix, pp. 82-86.

Against this backdrop of rapidly increasing passenger car sales, Toyota Motor Sales Co., Ltd. established Tokyo Toyopet Motor Sales Co., Ltd. (Tokyo Toyopet Motor Sales) as a directly-managed dealer on March 14, 1953. Tokyo Toyopet Motor Sales acquired sales rights from Tokyo Toyota Motor Co., Ltd. and began operations in April.

Tokyo Toyota was established in October 1946, when Tokyo accounted for about 30 percent of nationwide passenger car demand. Tokyo Toyota Motor's management team was made up of former employees from banks, life insurance companies, railways, tire manufacturers, and other companies (most affiliated with the Furukawa corporate group), and had no direct experience in automobile sales. From the very beginning, the sales systems would be expected to face extreme difficulty, and in fact, "Toyota's share of the passenger car market in Tokyo was extremely low, and there was no way to overcome this situation".1 It was a natural development that Tokyo Toyopet Motor Sales was established with investment from Tokyo Motor Sales Co., Ltd. in order to prop up the sales system.2

In 1953, the Japanese automobile market was about to enter a period when the prevalence of passenger cars would rapidly increase. Even with development of the Model RS Crown-a true passenger car-advancing, sales systems in the leading Tokyo market were lacking. As a result, Tokyo Toyopet Motor Sales was created as a directly-managed dealer, requiring little effort to establish.

In conjunction with the establishment of Tokyo Toyopet Motor Sales, the company acquired passenger car sales rights from Tokyo Toyota Motor, resulting in Tokyo Toyota Motor being temporarily unable to sell passenger cars. The result was a further weakening of Tokyo Toyota Motor's management foundations, and in 1967 it became a directly-managed dealer with a capital infusion from Toyota Motor Sales Co., Ltd.

Toyota dealers nationwide strongly opposed the establishment of Tokyo Toyopet Motor Sales. The establishment of a new dealer posed a threat to the existing rights of current dealers. Taking away even a portion of their sales rights was a matter of life and death for dealers, and they could not simply agree. Toyota Motor Sales explained that the establishment of Tokyo Toyopet Motor Sales was a special measure in consideration of the unique circumstances in the Tokyo market and that it would not be expanded nationwide. In addition, Toyota dealers around the country were invited to invest directly in Tokyo Toyopet Motor Sales (20 percent of total capital), and as a result, the dealers were eventually convinced.

At the time of its establishment, Tokyo Toyopet Motor Sales' capital was 30 million yen. Toyota Motor Sales President Shotaro Kamiya was appointed chairman, and Toyota Motor Sales Managing Director Hide Nagai was made president. The head office was located in Toranomon (now the Toranomon Sales Office), and it has been reported that the two-story wooden head office building was used by Kiichiro Toyoda as a research center in Tokyo following his retirement as president of Toyota Motor Co., Ltd.

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