Section 5. Expansion of Sales Systems in Japan and Development of Markets in Other Countries

Item 4. Exports of Completely-built Vehicles

Exports to Scandinavia began with a sample shipment of two Tiaras to Finland in June 1962, marking the start of Toyota's advance into Europe, but nothing went beyond the sample shipment.

The trigger of a full-scale entry by Toyota vehicles into European markets was the ninth Tokyo Motor Show held in October of that year. President W. Krohn of Erla Auto Import A/S, a Danish dealer of imported vehicles, was in Japan and noticed the Crown (RS40) that was on display at the show. He had a feeling that the subdued styling of the Crown would suit European tastes and decided to obtain exclusive sales rights for the Crown in Denmark. President Krohn exhibited the Crown in three major cities in Denmark in December of that year and generated a tremendous reaction.

A distributor agreement was concluded with Erla Auto Import in May 1963, and full-scale exports to the European market began with the loading on a ship of 190 Crowns.

The start of exports to Denmark led to a distributor agreement being signed with Louwman & Parqui B.V. of the Netherlands in May 1964, marking the start of Toyota's entrance into mainland Europe. Initially, Erla Auto Import was also responsible for sales in Sweden and Norway, but local distributors were later established in these countries.

In 1966, Toyota used non-automobile producing countries such as Belgium and Switzerland as footholds to establish sales bases in automobile-producing countries including the United Kingdom, France, and West Germany. Complete-knockdown production of Toyota vehicles in Europe was commenced by Portugal-based Salvador Caetano I.M.V.T., S.A. in 1968.

With the strengthening of its foundations for sales in Europe in the late 1960s, Toyota's sales grew rapidly. At the time, Japanese vehicles were at a price disadvantage because of the freight charges for the long transport distances and customs duties, but they offered the advantages of including a lot of equipment as standard and incurring few breakdowns, which meant that maintenance costs were low, and as a result, the competitiveness of Japanese vehicles steadily increased. As exports to Europe gained momentum, a representative office was established in Brussels, Belgium in August 1970 to gather information on automotive-related laws and regulations in each country and to conduct development of products suited for European markets.

As for Canada, export to the country did not make much headway due to the specifications required for the harsh, cold climate, as well as the imposition of high import duties. Finally in 1965, exports of the Crown, Publica, and Land Cruiser began, with Canadian Motor Industries as the distributor. Specifications for the extreme cold, however, were not adopted, and sales were extremely poor.

In order to develop products suitable for Canada's harsh climactic conditions, Toyota conducted repeated testing in cold weather regions. In February 1967, a cold-weather region test team comprising two Corollas and one Corona crossed the snow-covered Canadian continent from west to east, driving in extremely cold conditions with temperatures as low as minus 30 degrees centigrade. This experience was put to use in improving vehicles for Canada and Scandinavia. Cold-weather testing has been conducted in Canada every year since test sites were established in Wawa and Cochrane in Ontario Province in 1973.

By improving products based on these harsh cold-weather tests and developing sales networks, exports to Canada increased from 2,000 units in 1967 to 29,000 units in 1970.

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