Results from second half of the Production Facility Modernization Five-Year Plan

Under the first half of the Production Facility Modernization Five-Year Plan (from the end of September 1951 to the end of November 1953) the book value of machinery increased from 421 million yen to 844 million yen, doubling in just two years and two months. On a quantity basis, the total number of machine tools and industrial machines increased by 19 percent from 4,761 to 5,645. The increase in the book value was so substantial because of the purchase of expensive imported machinery and specialized domestic machinery. Between December 1952 and November 1953, a total of 103 new and powerful machines were imported and 43 machines specifically for manufacturing the R engine were installed.

During the second half of the Plan, most of the new manufacturing facilities installed were for the new Crown (Model RS) passenger car. Until that time, the manufacture of compact passenger car bodies had been outsourced to Arakawa Sheet Metal Works, Kanto Auto Works, Ltd., Central Japan Heavy Industries, Ltd. (now Mitsubishi Heavy Industries, Ltd.), and other companies, but production was brought in-house and investment in press plants and autobody plants was increased.

Compact passenger car body production was moved in-house because an informal decision had been made in early 1952 to reinstate President Kiichiro Toyoda. According to Eiji Toyoda's recollection, "Mr. Ishida requested that Kiichiro be reinstated in early 1952, but Kiichiro, possibly masking some self-consciousness he felt upon receiving the offer, complained, 'a company that does not make passenger cars is not an automobile manufacturer-I have no intention of managing such a company.' Inwardly, I suspect that he was quite pleased. Mr. Ishida convinced him that 'the company can make passenger cars when you return,' and a decision was made to reinstate Kiichiro as president."1 At that time, decisions were made to develop the first-generation Crown and to manufacture a complete passenger car including the body at the Koromo Plant.

With regard to internal production of the compact passenger car body, the vehicle was designed at the same time that plant and equipment planning was performed. A policy was adopted of preparing the facilities through close cooperation between design engineers and production engineers. Expansion of the press plant and autobody plant was completed in May 1952, and the compact passenger car production facility plan and new engine (R engine) production facility plan were launched.

Under the second half of the Production Facility Modernization Five-Year Plan, by the end of November 1955, the final year of the plan, the book value of machinery reached 1.986 billion yen and the total number of machine tools and industrial machines was 5,602. Compared to the end of November 1953, book value increased by 2.35 times, but the number of machines decreased slightly. The value per machine increased as a result of the introduction of high-performance and high-productivity machinery. This means that processes previously performed using three to four general-purpose machines could now be performed using a single special-purpose machine, and processing capacity was increased substantially without increasing the number of machines.

Total capital investment during the five years of the Plan (1951-1955) was 4.602 billion yen. Of this amount, 1.437 billion yen was for imported machinery, 2.749 billion yen was spent on domestic machinery, and 416 million yen was for equipment-related ordinary expenses.

As a result, production capacity reached the target of 3,000 units per month. However, Toyota Motor Co., Ltd. reduced operations to five days per week from June 1955 until the following January and did not have the opportunity to operate at full capacity. Starting in February 1956, however, production volumes were increased month by month, to 2,000 units in February and March, 3,000 units in April to June, 4,000 units in July to September, and 5,000 units in October to December. Thus, monthly production increased by more than 1,000 units each quarter. Production results quickly overshot planned capacity in response to robust demand.

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