Section 9. Preparations for Mass Production and Mass Sales
Item 3. Expansion into Latin America
Start of exports to Latin America
The marketability of the Toyota BJ Land Cruiser four-wheel drive vehicle was highly praised in Latin America. Exports began with 32 complete knockdown production (CKD) vehicles in November 1955.
Later, 52 Land Cruisers were exported in the autumn of 1956 to Venezuela, a country which was enjoying an oil boom. Four-wheel drive vehicles showed their true value for maintaining contact in oilfield regions and on cattle ranches, and prospective purchasers appeared one after another. Land Cruiser exports to Venezuela increased to 795 vehicles in 1957 and rapidly spread throughout Latin America.
The Land Cruiser served as a groundbreaker, but as the market was developed, political and economic instability in some Latin American countries resulted in barriers to exports in some cases.
In Colombia an alliance was established with Panhard, a leading Colombian automobile assembly company, in June 1958 to assemble and produce the Land Cruiser. President Shotaro Kamiya of Toyota Motor Sales Co., Ltd. returned to Japan from Columbia having promised full economic cooperation to the president of Colombia, which in turn supported the alliance. One week later, a coup took place, the president fled to another country, and the business tie-up was dismantled.
In Mexico, a tie-up was formed with the distributor Planta REO de Mexico in August 1960 for CKD production of the Land Cruiser (Model FJ25L), a diesel-engine truck (Model DA95LH-3), and passenger cars (the Crown and Corona). The business was established with local capital, and Toyota Motor Sales Co., Ltd. provided financial support. The management of Planta REO, however, was drawn into a political dispute and the company was seized by the government. Until Toyota's withdrawal in March 1964, total CKD production in Mexico was 3,580 vehicles.
Shortly after Toyota's withdrawal, the Mexican government proposed a plan for domestic production of automobiles. However, automakers that did not have local production plants could not participate in Mexico's domestic production, and as a result, there was no Toyota production in Mexico for an extended period.1