Section 9. Preparations for Mass Production and Mass Sales
Item 1. Expanding Sales Structures
Multiple dealer system developed
The Crown RS and the Master RR were launched in January 1955, and Toyota's share of the passenger car market jumped from 23.5 percent the prior year to 35.2 percent. Previously, large trucks had accounted for the bulk of sales, but starting in 1955, passenger cars and small trucks production increased to take the leading position (Table 1-46). The structure of the Japanese automobile market was undergoing a major change, with sales of small trucks growing to surpass passenger cars.
Table 1-46. Toyota Motor's Production Results (1950-1957)
Compact passenger car |
Large truck |
Small truck |
Total |
||||
---|---|---|---|---|---|---|---|
No. of units |
Share of total |
No. of units |
Share of total |
No. of units |
Share of total |
||
1950 |
468 |
4.0% |
7,529 |
64.3% |
3,714 |
31.7% |
11,711 |
1951 |
1,470 |
10.3% |
8,989 |
63.2% |
3,769 |
26.5% |
14,228 |
1952 |
1,857 |
13.2% |
7,299 |
51.7% |
4,950 |
35.1% |
14,106 |
1953 |
3,572 |
21.7% |
8,408 |
51.0% |
4,516 |
27.4% |
16,496 |
1954 |
4,235 |
18.6% |
10,044 |
44.2% |
8,434 |
37.1% |
22,713 |
1955 |
7,403 |
32.5% |
6,199 |
27.2% |
9,184 |
40.3% |
22,786 |
1956 |
12,001 |
25.9% |
9,127 |
19.7% |
25,289 |
54.5% |
46,417 |
1957 |
19,885 |
25.0% |
16,219 |
20.4% |
43,423 |
54.6% |
79,527 |
Existing market structures were not able to respond adequately to these market changes, so the introduction of multiple dealer networks was considered. Toyota Motor Sales Co., Ltd. President Shotaro Kamiya announced the idea while attending a board meeting of the Toyota National Dealers' Advisory Council in January 1956 and explained the specifics in February. The main details were as follows.
- 1)The new dealers would sell the Model SKB Toyopet light truck (renamed the Toyoace in July 1956) and the Model RR16 Masterline single cab pickup and Model RR17 Masterline station wagon.
- 2)New dealers would initially be established in 18 prefectures.
- 3)Investment by existing dealers in new dealers would be permitted as long as they did not acquire controlling interests.
The Toyota dealer executives who heard this explanation felt that the transfer of sales rights to the Model SKB, Model RR16, and Model RR17 to the new dealers was taking something away from their existing rights, and they were concerned about the impact on business. The existing dealers were not satisfied with the situation, but they had to consider their future relationship with Toyota Motor Sales Co., Ltd. and the attitude was for the dealers to "infer which areas they were convinced by and which area they would give in, and to implement future dealer policies".1
In the spring in 1956, seven dealers were launched as the first step. The first was Meiho Motors (created within Aichi Toyota Motor Co., Ltd.), established in Aichi Prefecture on March 20, followed by Yokohama Toyopet, Sendai Toyopet, and Mie Toyopet on April 1, Saitama Toyopet on April 2, and Marutoyo Motors in Gifu Prefecture and Kaneki Shoten in Hyogo Prefecture on April 10.
In preparation for the establishment of the Toyopet dealers, Toyota Motor Co., Ltd. adopted a plan to substantially increase production of the Model SKB Toyopet Light Truck. Toyota Auto Body Co., Ltd, which produced the bodies, also expanded its production facilities at the end of 1955. Sales prices were lowered considerably in January 1956, resulting in a rapid increase in demand for the Model SKB truck.
Supported by strong sales of the Model SKB, the establishment of Toyopet dealers proceeded smoothly. An additional 37 dealers were established in 1956, followed by 11 more in 1957, and with the creation of Shimane Toyopet on June 1 of that year, there was a total of 48 Toyopet dealers (excluding Tokyo and Osaka).
In conjunction with the development of the Toyopet dealers, the first-generation Model ST10 Toyopet Corona was launched at those dealers in July 1, 1957.
When the 5-ton DA60 truck equipped with the newly-developed Model D diesel engine was launched in March 1957, Toyota Diesel Co., Ltd. was established as a dealer. From February 1957 to April 1958, nine dealers were established in Sapporo, Miyagi, Tokyo, Yokohama, Shizuoka, Nagoya, Osaka, Kobe, and Fukuoka. Later, the total number of dealers increased to eleven when dealers in Saitama and Chiba switched from Prince Motor Co., Ltd. in 1965.
Toyota Motor Co., Ltd.'s diesel engine development was inclined towards small trucks, and Toyota vehicles' share of the large truck market fell steadily. As a result, management of Toyota Diesel dealers came to an impasse, and a last-ditch decision was made to also allow sales of the Publica passenger car.
The Toyota Diesel dealers changed their names to Publica dealers (later Corolla dealers) one after another. Of the two last remaining Toyota Diesel dealers, Tokyo Toyota Diesel was dissolved in 1980 and its employees went to work for Tokyo Toyota. The other, Nagoya Toyota Diesel, was renamed Toyota Corolla Meito in January 1, 1989 and was acquired by and merged with Toyota Corolla Aiho in April 1996.
In this way, as the domestic market expanded, the number of dealers rapidly increased. When the first-generation Corona was launched in July 1957, the number of dealers reached 109: 49 Toyota dealers, 51 Toyopet dealers, and nine Toyota Diesel dealers.