Section 5. Wartime Research and Production

Item 10. The Automotive Industry Under a Controlled Economy

Control of the parts manufacturing industry

When the Model AA passenger car and Model GA truck were announced in September 1936, Japan's parts industry was undeveloped and imported electrical equipment, carburetors, speedometers, spark plugs, and other components were used. As previously explained, the Automotive Department of Toyoda Automatic Loom Works began internal development of electrical equipment and rubber parts when it was designated a licensed company under the Automotive Manufacturing Industries Law that same month and it became obligated to use domestic parts. At the same time, Eiji Toyoda and Iwao Tatematsu investigated parts plants for machined, stamped, and forged parts and began developing suppliers one by one.

The Ministry of Commerce and Industry determined that improving the quality of parts was essential for raising the quality and performance of automobiles and on March 11, 1938 adopted the High-Quality Automobile Parts and Automobile Materials Certification Regulations as a measure to support the development of the automobile parts manufacturing industry. Initially, the parts of 30 companies were certified as high quality automobile parts, and the certified companies established the Certified Automobile Parts Industry Association. The association was granted preferential treatment, and the number of members steadily increased over the years. In addition, parts manufacturers that were not able to obtain certification (with annual production value of at least 120,000 yen) established regional automobile parts industry associations in Tokyo, Osaka, Nagoya, and Yokohama. On July 1, 1938, the National Automobile Parts Industry Federation was established with the participation of the Certified Automobile Parts Industry Association and the regional associations. When the Materials Mobilization Plan mentioned above came into effect, these automobile parts industry associations became the distribution organizations for materials used in parts manufacturing. Also, the Japan Auto Parts Industries Association was established as a subsidiary organization to the Automobile Control Association created in 1941, and the National Automobile Parts Industry Federation and related associations were disbanded.1

As the parts industry was developed and organized, the parts used in Toyota vehicles steadily shifted from imports to domestic products.2 Amidst the control of both the volumes and prices of raw materials, Toyota Motor Co., Ltd. held the first meeting of the Toyota Subcontractors' Round Table Conference (Domestic Automobile Subcontractors Industry Formation Round Table Conference) on November 7, 1939 at the Kuramae Industrial Hall in Shinbashi, Tokyo as a forum for exchanging ideas and opinions with representatives of cooperating plants. Kiichiro Toyoda was ill and could not attend the conference, and instead, Shuji Ono, manager of the Purchasing Section, explained-based on a manuscript submitted by Kiichiro-that the Just-in-Time concept planned to be introduced in conjunction with the start of operations at the Koromo Plant was not possible because of the control of raw materials.3

This conference was named the Kyoryokukai and became a regular event. Later, a close relationship developed between Toyota Motor Co., Ltd. and the Kyoryokukai, and in December 1943, its purpose as an organization to foster good relations was strengthened and it was relaunched as the Kyohokai4 (a voluntary organization of parts suppliers).

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1
'Automotive Part Industry Development Guidelines' (October 4, 1941 notice), 1943 Industry Association Annual, p. 155 and p. 538 (published September 10, 1943).
2
Some examples of the switch from imported to domestic parts include electrical equipment, first purchased from Delco Remy, then from Hitachi and ultimately produced internally; carburetors were initially purchased from Carter and later procured from Toyoda Automatic Loom Works (following the war, transferred to Aisan Industry Co., Ltd.) and Nippon Carburetor Co. Ltd.; purchase of speedometers was switched from AC Spark Plug to Ozaki Mfg. Co., Ltd.; and spark plugs were initially purchased from AC Spark Plug, Champion, and Robert Bosh and were later procured from NGK Spark Plug Co., Ltd.
3
The details of the explanation provided by Shuji Ono, manager of the Purchasing Section, at the first Toyota Subcontractors' Round Table Conference (November 7, 1939) were as follows. Approximately one year earlier in September 1938, just prior to the completion of the Koromo Plant, Toyota held briefings for its parts subcontractors in Nagoya, Osaka, and Tokyo to explain the subcontracting system. At these briefings, Kiichiro Toyoda's ideas concerning order volumes and ordering methods relating to parts procured from outside the company in conjunction with mass production at the Koromo Plant were explained. As a result of the outbreak of the Second World War, however, economic conditions changed substantially since then and it was impossible to expand production under the control mechanism, making it difficult to implement the ordering system as conceived ('The Promises of Last Summer and Current Conditions: The Sentiment of Kiichiro Toyoda's Manuscript', read by Shuji Ono, manager of the Toyota Motor Purchasing Section, Ryusenkei, January 1, 1940, p. 30)). It is believed that Kiichiro explained the basic framework for ordering under his Just-in-Time concept one year earlier, but with the control of raw materials under the Materials Mobilization Plan, it would be impossible to 'produce the needed items, when needed, in the needed quantity.'
4
The activities of the Kyoryokukai are explained as follows in the 50-Year History of the Kyohokai:
"At that time, Toyota Motor's purchasing divisions were located in the Nihon Chohei Building in central Nagoya, and the Kyoryokukai initially met in the building and then traveled by bus to Koromo to hold talks.
The main tasks of the Kyoryokukai were:
1. Addressing materials problems,
2. Dealing with experienced workers who were drafted, and
3. Addressing the issue of plant relocation.
The partner plants, however, were not able to resolve any of these issues alone and required support from Toyota. As a result, there was a strong desire to establish closer relations with Toyota Motor, reinforce the organization's purpose as a cooperative body that promotes friendly relations, and create a forum for technical exchanges. In December 1943, the Kyoryokukai was further consolidated and relaunched as the Kyohokai." (50-Year History of the Kyohokai, pp. 20-21, published by the Tokai Kyohokai, Kanto Kyohokai, and Kansai Kyohokai).