Section 2. Automobile Prototypes
Item 5. Sales Systems Established
Toyota Kinyu Kaisha established
Toyoda Automatic Loom Works established Toyoda Kinyu Kaisha on October 31, 1936. The company, established following a proposal by Sales Manager Shotaro Kamiya, provided financing to persons who purchased vehicles on an installment plan. Initially, the company's financing was commonly used when horse-drawn cart companies with little capital made the transition to truck transport. In August 1940, however, when truck and bus production and sales were regulated and a distribution system was instituted, priority in motor vehicle supply was placed on military demand and private demand eligible for financing rapidly declined, and as a result, Toyoda Kinyu's business also tapered off.
Toyoda Kinyu acquired shares of Toyota Steel Works, Ltd.1, which was established in March 1940, and of Toyoda Machine Works, Ltd.2, which was established in May 1941, and began to play the role of a holding company. In addition, Toyoda Boshoku merged with four other companies including Chuo Spinning & Weaving Company under a national policy in February 1942 to form Chuo Spinning Company, and in conjunction with this, Toyoda Kinyu purchased shares of Toyoda Boshoku Sho and Toyoda Automatic Loom Works owned by Toyoda Boshoku in order to maintain management of their shares.
Toyoda Kinyu's business as a holding company expanded, and in April 1942, the company was renamed Toyoda Sangyo Kaisha, Ltd. At that time, it owned shares of Toyoda Boshoku Sho, Toyoda Automatic Loom Works, Toyota Motor Co., Ltd., Toyota Steel Works, Toyoda Machine Works, and other companies with a total value of 13 million yen.
In 1944, Toyoda Sangyo Kaisha acquired shares of Toyota Motor Co., Ltd. owned by Toyo Spinning. Toyo Spinning acquired a large number of Toyota Motor Co., Ltd. shares at the time of Toyota Motor Co., Ltd.'s first capital increase in April 1939 and its second capital increase in January 1943. Toyoda Sangyo Kaisha increased its capital from one million yen to 10 million yen in order to acquire 279,000 shares of Toyota Motor Co., Ltd. (23.25 percent of all issued shares)3 from Toyo Spinning and applied the proceeds to the share purchase.
In the post-war period, Toyoda Sangyo Kaisha established a trading division to handle various products manufactured by Toyota group companies in response to the shift to civilian demand. Among the products were bicycle air pumps, electric ranges, and electric heaters manufactured by Toyota Motor Co., Ltd., wood products (toolboxes, wooden pipes for spinning, dinner tables, and so forth) manufactured by Toyota Auto Body Co., Ltd., and manual flour grinders manufactured by Toyoda Machine Works.
Toyoda Sangyo Kaisha was designated as a holding company by the Holding Company Liquidation Commission in September 1947 and was ordered to dissolve. A decision was made to spin off the trading division and establish a new company, and Nisshin Tsusho Kaisha Ltd. (now Toyota Tsusho Corporation) was established on July 1, 1948.