Toyota's Long Road From Loom Company Sideline to World’s Top Automaker

Toyota started as an offshoot of a textile loom company to become one of Japan’s most iconic companies and the world’s No. 1 motor-vehicle manufacturer.

Along the way, the company redefined how cars are made with its “lean production” and “just-in-time” models that have been studied in business schools and adopted by manufacturing industries worldwide.

More recently, as global concern has grown about man-made climate change, Toyota became a pioneer in hybrid gasoline-electric car technology and in 1997 launched the Prius, the world’s first mass-market “green” car.

Japan’s biggest company by revenue, Toyota overtook General Motors in 2008 as the world’s top motor-vehicle manufacturer while the Detroit giant, now part-owned by the US government, went through a painful restructuring drive.

Today Toyota employs more than 320,000 people worldwide and makes in excess of 7 million cars a year in more than 50 plants in 27 countries. The city in central Japan where it was founded has renamed itself from Koromo to Toyota City.

The company started in 1937 as a division of Toyoda Spinning and Weaving at a time when Ford and General Motors dominated car production in the country, making several thousand vehicles a year each. The founder’s son, engineer Kiichiro Toyoda, had been researching small gasoline engines for years and toured the US and Europe.

The company changed its name from Toyoda to Toyota because, when written in katakana characters, it required eight instead of 10 pen strokes —­ making for a simpler and more auspicious logo, since eight is seen as a lucky number in Japan.

Twenty years after it was founded, in 1957, Toyota shipped the Crown passenger car as its first export to the US, opening its first overseas plant in Brazil the following year. Early versions of Toyota cars were often of poor quality and fared badly on North American highways, but as their quality improved, they gained a bigger foothold.

By 1969, Toyota’s cumulative exports had hit the million mark. In the 1970s, during the global oil crisis, overseas Japanese car sales surged and increasingly threatened Detroit.

But Western competitors were intrigued by the Toyota Production System, which has since become a global model of efficient management, known as lean or just-in-time manufacturing.

Last year Akio Toyoda, the 53-year-old grandson of the Toyota founder, was named the company’s president, bringing the corporate titan back under family control. AFP

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