Toyota Tradition

"The People Car's" From Dream to Reality

The recent global introduction of the second-generation Yaris is a milestone in a process of development which began some fifty years ago, with the production of Toyota's first “people's car” — the Publica.

It was in the 1950s — a good ten years before the birth of the Corolla — that Toyota first turned its attention towards developing small cars. The company had always dreamed of making a “people's car,” or an affordably priced, mass-produced small car, but it wasn't until after World War II that it finally had the chance to turn this dream into a reality. With a retail price of ¥360,000 (US$1,000) set as the development target, it took six years of hard work and numerous prototypes until the resulting car debuted at the 1960 All-Japan Motor Show (now Tokyo Motor Show).

To build on excitement generated by the motor show and to bring the car closer to the hearts of the people, Toyota advertised nationally, asking the public to name the car. Incredibly, over one million people responded and eventually the name “Publica,” a clever combination of “public” and “car,” was chosen. Toyota continued its promotional efforts after the car was released in 1961, using various events and campaigns to further etch the Publica into people's minds, thereby ushering in a modern era of marketing in Japan.

Unfortunately, however, the Publica was not initially the success Toyota had hoped it would be: times had changed. As the effects of war on the economy gradually disappeared, it became clear that customers wanted cars which symbolized their aspirations, and that the Publica was simply too basic. After kaizen, Toyota released a luxury version of the car in July 1963: the Publica Deluxe. Within six months sales had shot up 70% and the Publica thus became quite the hit after all, affording Toyota an overwhelmingly strong position in the small passenger car market.

Not only did the Publica's popularity bode well for its successors, the Publica Starlet ), the Starlet ) and the Yaris (1999-), it also left an indelible mark on the way Toyota operates. Through trial and error, learning from mistakes as it went, Toyota improved development techniques and its sales and service infrastructure, which went on to support the explosive success of later models. It is projects such as this which gave birth to Toyota principles such as kaizen and which paved the way for the innovation Toyota is renowned for to this day.


Trust Is Key (Kiichiri Toyoda - Founder of TMC)

Respect for People has always been important to Toyota, and nowhere is this more evident than in the relationship among Toyota associates. Toyota presidents, chairmen and managers alike are quick to acknowledge that it is the hard work of these associates which has enabled the company to become what it is today.
There has been only one exception to this rule throughout Toyota's entire history. In June 1950, during a postwar period of great hardship in Japan, the company was forced to choose between corporate restructuring or risking complete collapse. Then-President Kiichiro Toyoda battled for months for the sake of his employees, but ever-worsening conditions showed the company to be unsustainable without significant change. Recognizing that if the company disappeared, so too would the livelihood of all Toyota employees, Kiichiro realized that lay-offs could not be avoided. With sorrow in his heart, he explained the circumstances to his workers, which led to 1,600 voluntary retirements. Management then vowed that this would be the first and last time such an event would come to pass at Toyota, and, in a gesture of respect to former employees, Kiichiro resigned from his position as president of the company.
This act marked a new beginning: with neither money nor facilities to its name, the company concentrated on nurturing its one remaining asset — its people. Toyota was able to recover by relying upon the invaluable resource of associates' knowledge and skills, with the lessons it had learned providing firm foundations for future growth.
Honorary Advisor Eiji Toyoda recalls: “From then on, we started building a framework of mutual trust between labor and management. The process was like building a wall, block by block.” Toyota management realized that strengthening the company was necessary to safeguard the welfare of its employees, and recognized that trust is essential to foster and support that strength. Toyota associates in all areas of operation must continue to work together “like a strong chain,” in the words of President Watanabe, to nurture this culture of cooperation which helps Toyota benefit people and society.
56 years later, Kiichiro's promise lives on, and Toyota is still putting its people first. The Toyota Way pillar of Respect for People continues to provide the framework for the company's growth. In the words of Eiji Toyoda, “Trust is key.”

"Ask'why' Five Times About Every Matter" (Taiichi ohno - Former Executive Vice President of TMC).

We come across problems in all sorts of situations in life, but according to Taiichi Ohno, pioneer of the Toyota Production System in the 1950s, "Having no problems is the biggest problem of all." Ohno saw a problem not as a negative, but in fact as "a kaizen opportunity in disguise." Whenever one cropped up, he used to encourage his staff to explore problems first-hand until their root causes were found. "Observe the production floor without preconceptions," he would advise. "Ask ‘why’ five times about every matter."
He used the example of a welding robot stopping in the middle of its operation to demonstrate the usefulness of his method, finally arriving at the root cause of the problem through persistent enquiry:

1. "Why did the robot stop?" The circuit has overloaded, causing a fuse to blow.
2. "Why is the circuit overloaded?" There was insufficient lubrication on the bearings, so they locked up.
3. "Why was there insufficient lubrication on the bearings?" The oil pump on the robot is not circulating sufficient oil.
4. "Why is the pump not circulating sufficient oil?" The pump intake is clogged with metal shavings.
5. "Why is the intake clogged with metal shavings?" Because there is no filter on the pump.

Toyota takes pride in the quality of both its products and its processes, and the ability to solve problems effectively has always been necessary to ensure this quality. Even if initially timeconsuming, identifying the root cause of a problem is important because it allows us to take appropriate countermeasures to prevent recurrence in the long-term. "The root cause of any problem is the key to a lasting solution," Ohno used to say. He constantly emphasized the importance of genchi genbutsu, or ‘going to the source,’ and clarifying the problem with one's own eyes. "‘Data’ is of course important in manufacturing," he often remarked, "but I place greatest emphasis on ‘facts.’"
These days, the global auto market is in a continual state of flux. For Toyota to be able to respond to market change, it is essential that each associate is aware of problems and works to improve operations at every possible opportunity. Whenever a problem arises, whether it be in the factory or on the sales floor, we should follow Ohno's advice: go directly to the source and keep asking, "Why?" By never becoming complacent and always seeking to innovate, Toyota will be ready to overcome any challenges it may face in the future.

"Always Be Studious, Creative and Strive to Stay A Head of The Times. Five Main Priciples of Toyoda 1935" (Sakichi Toyoda - Founder Toyoda Automatic Loom Works. Ltd 1867 ~ 1930)

Throughout his life Sakichi Toyoda believed in and lived by the three maxims of labor, gratitude and service. Although ordinarily a man of few words, Sakichi would often drill the importance of teamwork into his staff, saying that "Entrepreneurs, managers and staff must all work together." He encouraged his subordinates with comments like, "Let's give it a try" and, "Don't be afraid to make mistakes," mottos he himself put into practice.
He reminded those working under him that even the smallest things have their proper place and must be valued. Even after he became company president, he could often be seen picking up nails, bits of cotton or anything else that might have fallen onto the factory floor.
Sakichi always maintained a sense of gratitude, not only towards members of his family or those who helped him, but also towards society as a whole. He believed that he owed his success to the world at large and that it was important that Toyota be of service to humankind by working in good faith, not purely for monetary gain.
Those working under Sakichi inherited his convictions, and applied them even after his death as basic tenets for the management of every concern affiliated with Toyoda. Risaburo and Kiichiro Toyoda later codified these principles and, on October 30th, 1935, the fifth anniversary of Sakichi's death, they presented them in the form of the "Five Main Principles of Toyoda":

1. Always be faithful to your duties, thereby contributing to the Company and to the overall good.
2. Always be studious and creative, striving to stay ahead of the times.
3. Always be practical and avoid frivolousness.
4. Always strive to build a homelike atmosphere at work that is warm and friendly.
5. Always have respect for God, and remember to be grateful at all times.

The fundamental spirit of these principles constitutes the basis on which the Toyota Group functions today. They still serve as guidelines for the group's policies and activities, as well as for all management and staff to this day.

"We Reaped Ample Rewards For Our Pains" (Eiiji Toyoda - President of Toyota Motor.Co.,Ltd 1976 ~ 1982).

It was during the Oil Crisis of some thirty years ago that Toyota first set foot on the path towards becoming the undisputed leader in automotive environmental technology it is today. "The challenge of meeting emission control standards was a severe test that allowed our technology to make big strides ahead of European technology," Honorary Adviser Eiji Toyoda recalls, " but we reaped ample rewards for our pains."
In January 1974, the Japanese government announced its emission control regulations, which were at the time the stiffest in the world (at the same level as the Muskie Act, which governed emissions regulations in the USA), and their lead time was very short. The regulations were in fact so tight that they could not be met simply by expanding existing knowhow — they required a total breakthrough in new technology. The biggest difficulties lay in the simultaneous reduction of three exhaust gases: carbon monoxide (CO), hydrocarbons (HC), and nitrogen oxides while avoiding any adverse effects that reduction was expected to have on fuel consumption, performance and cost.
Toyota had actually begun initial research into controlling emissions in the 1960s, and the program was reinforced with the establishment of the Development and Planning Office and the Higashi Fuji Technical Center in new, purpose-built facilities. Having looked into various ways to decrease emissions, Toyota opted in 1971 to focus its main research efforts on the development of the catalytic method of emission control.
In June 1977, Toyota announced that three models, including the Crown, would be equipped with a three-way catalytic converter and the following year, every Toyota model succeeded in meeting emission control standards.
It had been a long struggle for Toyota. However, through these processes, researchers and technical personnel throughout the company were able to build up vast amounts of technological expertise, which they later turned to effective use in vastly improving the functions of Toyota vehicles.

"Building Quality into Processes" (Eiiji Toyoda - Executive Vice President of Toyota Motor Co.,Ltd 1960 ~ 1967).

In June 1960, Eiji Toyoda, then Executive Vice President of Toyota Motor Co., Ltd. (TMC), laid down guiding principles for quality control in a document named "Requests regarding inspection." In it he introduced the notion of "building quality into processes," pointing out that "the idea behind an inspection is to eliminate the need for inspections." As long as standards in processes could be kept at the highest possible levels, Toyoda thought inspections would, in an ideal world, become unnecessary.
Toyoda decided to produce the document in response to the difficulties TMC had been facing at the time. Increased output in response to the incredible surge in demand due to Japan's rapid motorization at the time, saw a huge influx of insufficiently trained new staff at the factories. This was having serious repercussions on product quality.
In June 1961, TMC decided to adopt the system of Total Quality Control (TQC) to modernize management operations. To realize TQC, all employees in Toyota were required to "regard the next processes (on the production line) as their customers and provide them with the required amount and quality of goods and services on a timely basis." Individual quality control circles studied ways of determining the cause of defects when they occurred and devised countermeasures to prevent reoccurrence. In addition, quality control teams were formed at all levels to promote company-wide participation.
The first product to benefit from these improvements was the third generation Corona. Pressures to bring the second generation Corona to market as quickly as possible to meet market demand had led to early product defects, which although later rectified, caused the car to be widely regarded as inferior in quality.
After company-wide efforts to implement TQC, the new Corona was launched in September 1964, and proved its superior quality in the "100,000-km continuous high-speed driving test" conducted on highways in Japan. The high profile test, the likes of which had never been seen before, meant the Corona soon earned a reputation for exceptional high speed performance and durability. The model had recovered its reputation and was on its way to becoming the best selling passenger car in Japan.

Deming Medal 1965
The Deming Application Prize was established by the Union of Japanese Scientists and Engineers to commemorate the achievements of Dr. W. Edwards Deming, who contributed much towards promoting and spreading quality control in Japan. It is awarded to the company recognized as having made the most outstanding improvements through the application of total quality control, and is still awarded to this day

"Defends Your Castle Yourself" (Taizo Ishida - Former Chairman of Toyota Motor Co., Ltd).

The famous saying "defend your castle yourself" sums up the Toyota philosophy of "self reliance." The idea reflects the notion that everyone must take responsibility for their own fate. Some 40 years ago, Toyota did exactly this to ensure its own survival and growth.
Towards the end of the 1960s, during the rapid growth of motorization in Japan, a growing momentum for capital liberalization was beginning to take effect, meaning companies of different nationalities would be able to compete against each other on equal terms in Japan. In view of the challenge presented by the more powerful US automakers at the time, the Japanese automobile industry was forced into action.
While a number of Japanese car makers announced joint partnerships with their American counterparts, Taizo Ishida, then Chairman of Toyota Motor Co., Ltd., introduced the "defend your castle yourself" management policy, thus clearly stating Toyota's position that it would defend itself independently by becoming more competitive. It was Eiji Toyoda, President of Toyota Motor Co., Ltd. at the time., who reflected this policy in October 1969 when he announced Toyota's "massvolume production" policy.
Toyota's ambitious policy saw it double its annual production to 2 million units in the three years up to 1971 (the year of capital liberalization). With the best selling first-generation Corolla heading a more varied line-up, Toyota had both the volume and the products to back up its aspirations. By then strengthening its dealer network and its supplier relationships, thus unifying its manufacturing and sales efforts, Toyota gave itself the necessary infrastructure to take on the competition.
In these times of globalization, Toyota has evolved by promoting the spirit of "competition and cooperation." However, Toyota continues to act with self-reliance, accepting responsibility for its own conduct and for maintaining and improving the skills that enable it to produce added value — embodied in projects such as the complete development of the formula one racecar and hybrid technology.
Through continuous learning and kaizen, Toyota has so far managed to grow and achieve its goals. This core Toyota philosophy, passed down from generation to generation, is still relevant today.

"Good Thinking, Good Products" (Eiiji Toyoda - Managing Director of TMC 1950 ~ 1981).

"The Spirit of Being Studious and Creative" has been deeply embedded in the Toyota Way in all areas of operations ever since the concept was very first introduced by Sakichi Toyoda, the founder of Toyoda Automatic Loom Works, Ltd. It is the fundamental concept behind "Good Thinking, Good Products," the slogan adorning Toyota factories around the globe which was born from the Toyota Creative Ideas and Suggestions System (TCISS), and which encourages employees to suggest improvements at work.
The system was introduced by Managing Director Eiji Toyoda when it became clear during the post Second World War economic recovery that Toyota's production facilities needed to be modernized. Toyoda took the idea from a Ford Motor Company plant which he had visited in July 1950. A suggestion system employed by Ford placed emphasis on supporting its improvement activities through opinions not only from the factory, but also from the management side.
Based on this system, Toyota sought, not simply to copy, but to improve the system in line with the Toyota Way and established the TCISS in May 1951. Although the TCISS offered incentives to employees, the real value of the system was that it provided motivation to employees by focusing on their skills and creativity. The TCISS systemized the practices that had been customary since the time of Toyota Motor Corporation founder Kiichiro Toyoda: respecting opinions from production and sales and conducting spontaneous on-site inspections while simultaneously inviting suggestions for improvements. With this development in mind and to inspire employee participation, a company slogan, "Good Thinking, Good Products" was picked at an in-house contest in 1953, and is still used to this day.
As the years passed, the TCISS became steadily more productive. Teams were formed to create ideas for improvements, and the suggestions themselves became more substantial as all employees were encouraged to review their jobs constantly and implement improvements.
This Kaizen Spirit has continued to develop much further over the years and is deeply embedded in Toyota's culture, not only in production but also in sales operations around the globe.

"The Dream Lives on - Soichiro Toyoda 1952" (Kiichiro Toyoda - Founder of TMC).

Toyota's energy and drive comes, and always has come, from its determination to meet its goals and strive for its dreams.
"My father's dream, and my grandfather's dream before that, has grown so big that it lives on even after their death," said Shoichiro Toyoda in 1952. His grandfather, Sakichi, had realized this dream to build and produce an automatic loom, while his father, Kiichiro, had made the first production passenger car in Japan a reality.
"It is our mission to strive for new developments of this dream," continued Shoichiro. Toyota is now a global company enjoying unprecedented growth around the world.
Kiichiro Toyoda had never stopped thinking of new ideas right up until his very last days, and his thoughts went even beyond the automobile.
Facing the post-war devastation in Japan, he hoped to build earthquake and fire resistant housing. Determined to make another of his father's dreams a reality, Shoichiro ensured that the Toyota Housing business also continued to grow after his death. Now the Toyota Housing Corporation offers 13 types of high technology home.
Another dream of Kiichiro's was a helicopter that would be available to all — one which can provide personal freedom of mobility for people across the world. Although the idea of private air travel may be still some way off, the idea of freedom of mobility for all is a dream that lives on in Toyota today.
Toyota's dreams of today stem from the original vision to "contribute to society through making things." After half a century, we are facing various changes in our social environment and Toyota's modern day vision can be found through the likes of the Toyota Partner Robots and the i-unit at EXPO 2005 AICHI, JAPAN, where Toyota is showing how it is striving to be Kind to the Earth, Provide Comfort for Life, Excite the World and Respect All People.

"Maintain Quality Through Team Work" (Tatsuro Toyoda - First President of NUMMI).

"Toyota is very proud to build quality products with GM (General Motors Corporation) here at NUMMI*. Without GM's partnership . . . Toyota would not be where it is today," said TMC President Fujio Cho in marking NUMMI's 20th anniversary early last year.
TMC had long seen production in North America as vital to Toyota's success. The early 1980s saw demand for compact cars grow and competition among manufacturers intensify. This constituted an impetus to the key Japanese manufacturers to establish strategic alliances and overseas operations. In 1979 Toyota began studying the possibility of such a plan and approached Ford Motor Company as a possible partner. After failing to set up a satisfactory plan with Ford, however, TMC turned to GM and reached an agreement in February 1983.
The deal would benefit both sides. Toyota could gain production expertise from GM and comply with proposed local content laws. It could also provide something in return: Japanese manufacturing know-how, especially for compact vehicles.
Then TMC Chairman Eiji Toyoda summed up TMC's view of NUMMI in April 1983 when he said "the foundations of the development of the world economy rest on a spirit of ‘cooperation and competition.’" Of course, there were many challenges on the way; but thanks to their hard work and goodwill, Toyota and GM succeeded, and the first Chevrolet Nova rolled off the assembly line in December 1984.
At NUMMI's opening ceremony in April 1985, then NUMMI President Tatsuro Toyoda thanked everyone, including the 1, 200 employees, for bringing the project to fruition. "We are building cars to world-class quality standards," he said.
GM launched sales of the Nova in June 1985, and the rest is history. NUMMI now produces 370,000 vehicles annually, including the Corolla sedan, Pontiac Vibe. It also employs over 5,600 people.
"Maintain quality through teamwork" has been central to the NUMMI's success over 20 years. A real turning point for Toyota at the time, NUMMI represents the beginning of Toyota's new international business plan and has been an excellent rehearsal for the IMV project.
Today Toyota and NUMMI "have much to celebrate and much to look forward to . . . in the future," Cho said.

Unfortunately, however, the Publica was not initially the success Toyota had hoped it would be: times had changed. As the effects of war on the economy gradually disappeared, it became clear that customers wanted cars which symbolized their aspirations, and that the Publica was simply too basic. After kaizen, Toyota released a luxury version of the car in July 1963: the Publica Deluxe. Within six months sales had shot up 70% and the Publica thus became quite the hit after all, affording Toyota an overwhelmingly strong position in the small passenger car market.