The History of the Founding of Toyota and How to Enter Indonesia

The History of the Founding of Toyota and How to Enter Indonesia – Toyota is one of the largest car manufacturers in the world. The company is headquartered in Tokyo (Japan), they founded the company on August 28, 1937, 82 years ago. Its founder was Kiichiro Toyoda, the eldest son of Sakichi Toyoda, the founder of the Toyota industry, who originally made sewing machines in the early 1900s.

The History of the Founding of Toyota and How to Enter Indonesia

History of the Founding of Toyota

For the Japanese, they may find it appropriate to equate Sakichi Toyoda with Thomas Alva Edison. He not only played a role in enlightening the Japanese industry. Sakichi Toyoda also facilitates the work of the weaving workers with automatic machines. The machine increased the capacity and efficiency of textile production at that time.

His dexterous and unyielding work ethic was immediately transmitted to Kiichiro Toyoda, he was used to seeing his father working in a factory. After graduating from university, he joined a family-owned company, Toyoda Automatic Loom Works Ltd, which later became Toyota Industries Corporation.

Before Sakichi Toyoda died, he advised his son to continue the business. Even so, Kiichiro Toyoda preferred the automotive industry, which at that time many people considered a risky decision.  Because not many Japanese companies are operating in this field.

Kiichiro Toyoda
Kiichiro Toyoda. Image source: wikipedia

Kenneth E. Hendrikson in The Encyclopedia of The Industrial Revolution (2015: 965-966) recounts the early days of the founding of the Toyota car manufacturer. Kiichiro Toyoda’s plan to produce vehicles domestically received immediate support from the Japanese government.

So in 1929, he went to Europe and the United States (USA) to study and take inspiration. This he did to develop the automotive industry. Time and time again he was in and out of factories in Detroit and studied every corner of Chevrolet and Ford. This he did before building his own car that he wanted.

After returning from abroad, they created the Model A1 car in 1935.. Interestingly, this car could exchange components with American sedans, which at that time did dominate Japanese roads.

Not long ago, Kiichiro Toyoda started the Toyota Motor Company, as a subsidiary of Toyoda Automatic Loom Works. They chose the name ‘Toyota’ because they thought the name ‘Toyota’ was luckier and easier to write in Japanese characters.

Toyota factory
Toyota factory. Image source:

During World War II, Toyota participated in producing military vehicles that were born from factories on the island of Honshu. This durable truck even became the forerunner of the Toyota Land Cruiser which they were successful in selling in the US and around the world in the future.

After the death of Kiichiro Toyoda in 1952, the company produced more and more cars. Apart from that, the company has also started exporting to countries around the world. The Britannica page notes that in 1966 Toyota began acquiring various companies. These companies include Hino buses and trucks, Nippon Denso, and the Daihatsu Motor Company.

By the 1970s, Toyota had sold more than one million vehicles globally. Even for decades, the company became the largest automaker in Japan and continues to grow in the US market. Toyota is also known as a vehicle brand that is cheap, fuel efficient, and reliable. As shown in the Corolla, the best-selling sedan in the world.

Now Toyota has emerged as a car manufacturer with production facilities in many countries. These countries include Argentina, Brazil, China, Colombia, Czech Republic, Egypt, France, Malaysia, Poland, Indonesia and many other countries.

The Beginning of Toyota Entering Indonesia

General Motors
General Motors. Image source: Carmudi Indonesia

Indonesia produced cars for the first time not from Japan, but the US. The first manufacturer to make cars in the country was General Motors (GM) which established a factory in Tanjung Priok in 1920.

According to Indonesian automotive journalist James Luhulima in Car History & Stories of the Presence of Cars in this Country (2012), the factory at that time was still limited to assembling several components into a complete car. In 1938, the factory began to grow and became the main supplier of American cars before they sent them to big cities such as Surabaya, Yogyakarta, and others.

Unfortunately, World War I and II had an impact on the cessation of factory activities in the north of Jakarta. The uncertain situation at the beginning of Indonesia’s independence period contributed to the stagnation of factory activities. Moreover, the Dutch’s desire to regain control of Indonesia made the situation even more complicated.

Finally, after various parties succeeded in signing the Round Table Conference in 1949, the Netherlands handed over sovereignty to Indonesia without conditions. The economic situation is gradually improving, but the development of the automotive industry is still disrupted. Especially after the nationalization of Dutch companies, including GM in it.

The government acquired the factory and then revived it around the 1970s when Astra took over to assemble Chevrolet trucks. Not long ago, the government issued a regulation that required companies to establish a sole agent brand holder (ATPM) before marketing cars in Indonesia.

Astra welcomed the regulation by establishing PT Toyota Astra Motor (TAM) as Toyota’s ATPM in Indonesia. The factory later changed its name to Gaya Motor (GM) and has since started producing factory alert cars bearing the ‘T’ logo.

Even so, Toyota’s presence in Indonesia started before the 1970s. In 1961, James Luhulima noted, the Ministry of Transmigration, Cooperatives, and Village Community Development purchased 100 Toyota jeeps. The Toyota jeep they bought had a canvas roof aka the Land Cruiser FJ Series for them to deploy to the region.

The presence of the Land Cruiser as Toyota’s initial generation in Indonesia is not alone, the late AH Budi also imported several Toyota Tiara units. He is the founder of Nasmoco Group. The cars that were present were probably the first wave of Japanese cars to enter Indonesia, then other brands followed.