"What's an automobile industry without a passenger car?"
released on May 2003
founder of Toyota Motor Corporation
In the early 1930s, Japan was a high potential market for American automobiles. As Ford Motor Company and General Motors Corporation expanded production in Japan to meet the growing demand, Japanese automakers were just beginning their attempts to produce automobiles domestically.
Yet, as of April 1930, there was no passenger vehicle in Japan's "popular car" (around 3,000 cc Ford and Chevrolet models) class. It would be Toyota that would fill this new segment and help put the company on the road to success.
After traveling to the United States, Kiichiro Toyoda wasted no time in realizing his dream of building a car. At that time, the Japanese were not just curiously interested in cars. They were also buying them at an astonishing rate, but these were foreign-made cars, not domestic, and Kiichiro knew that an immediate leap had to be taken into this business.
Toyoda Automatic Loom Works began preparations to enter the automobile business at a fast pace. In the beginning stages of production, the company had to quickly meet challenges, both in manufacturing the complex body and making it affordable. In January 1934, the company made the decision to increase its capitalization to 3 million yen and added vehicle production to its operations.
Kiichiro wanted to build more than small affordable cars. "I am thinking of making a popular car," he said. "Besides, what's an automobile industry without a passenger vehicle?" Kiichiro learned from Chevrolet's engine and power train and found inspiration for the exterior design in the De Soto Airflow. In the end, he opted for a car larger than 3,000 cc, an unexpected choice considering the current state of income levels and Japan's narrow roads.
Not everyone agreed with his choice of a vehicle to begin operations. The other Japanese makers and corporations acknowledged the potential of the small passenger car market, but none dared to tackle the challenge of competing with foreign makers, who, at the time, dominated the Japanese market. Kiichiro Toyoda may have foreseen competition with the 1,000 cc Datsun (now Nissan) if he had produced a small car, or he may have had strategic information on new government policies. Or perhaps, he was thinking long-term: toward eventual overseas exports and the need for larger vehicles in those markets. Nevertheless, history has proven the wisdom of Kiichiro's strategy. In May 1935, Toyota produced its first passenger car, the A1. The completion of this car was just the beginning of a long and prosperous history. Kiichiro took a risk and fortune smiled on him.
Line-off ceremony of A1 passenger car, 1935
AA sedan at the "Toyoda Domestically Made People's Car" exhibition, 1936