Company history

Sakichi Toyoda spent more than thirty years inventing looms before perfecting the fully automatic Type G. In November 1926 he set up Toyoda Automatic Loom Works in Kariya, Aichi, as a subsidiary of the family’s Toyoda Spinning & Weaving, purpose-built to mass-produce it. The Type G was world-class: in 1929 the works licensed the foreign patent to Britain’s Platt Brothers, and that royalty income handed the Toyoda family the capital for its next venture.

With that patent money, Sakichi’s eldest son Kiichiro Toyoda set out to mass-produce a domestic passenger car — and he built the effort inside the loom works. In 1933 he opened an Automobile Department there, accumulating car-making know-how down to the special steel and machine tools made in-house. In August 1937 the department was spun off as Toyota Motor Co., Ltd. The loom maker had created an automobile company and let it go — in just four years.

War then turned loom lines to munitions, and the steel arm was hived off as Toyoda Steel (now Aichi Steel) in 1940. Postwar the works restarted looms and, in May 1949, listed on the reopened Tokyo Stock Exchange. But the Korean-War textile boom was brief: with the 1951 end of special procurement, textile machinery slid into a structural slump, forcing management to ask what its next pillar would be.

Facing ~1,600 surplus workers as looms sank, Taizo Ishida — president of both Toyoda Automatic Loom and Toyota Motor — chose not to cut but to absorb them by taking OEM work for Toyota: engine production from 1952, vehicle assembly from 1953. In 1956 the company began building forklifts, riding Toyota’s existing nationwide dealer network to seize the domestic number-one spot — its first self-contained flagship after looms.

The contrast with farm machinery (entered 1957 on the same engine technology, exited 1969) taught the decisive lesson: what divided success from failure was not product quality but whether it could use the Toyota sales channel. Distribution, the company learned, was an asset as heavy as the product itself. Forklifts reached ~38% of the domestic market by 1977. From 1967 the Nagakusa plant expanded contract manufacturing of Toyota’s mass-market cars, and by the late 1980s more than half of sales were Toyota OEM — the 1987 Sprinter contract, taken as the company asked Toyota for support amid the post-Plaza yen shock, deepening the dependence and weakening its bargaining position within the group.

Car-air-conditioner compressors (from 1960, supplied via Denso) grew into a second pillar. By 2000 the loom origin had all but vanished from the numbers, and the company had become a general machinery maker of forklifts, auto OEM and compressors. To defend at world scale the lead it had won at home, it bought Sweden’s BT Industries in 2000, lifting its global materials-handling share from 13% to 21% and making it the world’s number one in industrial vehicles.

In 2001 the company renamed itself — Toyota Industries Corporation in English — acknowledging a complex spanning vehicles, engines, compressors and materials handling far from its loom name. When Germany’s Kion bought Dematic in 2016, joining forklifts to warehouse automation, competition shifted from selling single machines to proposing whole-warehouse systems, and management feared a single-product maker would lose its edge.

President Akira Onishi (from 2013) made growing “out of a sense of crisis” the watchword. In 2017 the company bought Bastian Solutions and then, for about $1.2B (¥140bn), the Dutch airport-baggage and warehouse-automation specialist Vanderlande, taking the world’s number-four spot in logistics solutions. By the year ended March 2017 textile machinery was just 2.9% of consolidated sales: the “automatic loom” in the name and the reality had fully parted.

Yet the core still rested on Toyota vehicle OEM and car-air-conditioner compressors, both exposed to outside forces — European EV plans that stalled the compressor ramp, tariff uncertainty and a European slowdown hitting forklifts. And the capital market was stirring: the return on capital from Toyota contract work had run below the cost of capital for thirty years, and a balance sheet heavy with cross-shareholdings drew growing questions about the half-century of Toyota dependence.

In 2024 an engine-certification testing scandal surfaced in the diesel engines Toyota Industries built for the group, halting shipments and exposing the strain in an auto business it never fully controlled. That same year Toyota moved to take the company private, offering $109 (¥16,300) a share — raised twice — to buy out the source company of the entire Toyota group.

The deal reversed the flow of 1937: the automobile side buying back the loom works that had birthed it, with chairman Akio Toyoda among the acquirers and the founding family retightening its grip on the group. Delisting trades quarterly market scrutiny and a low return on capital for the freedom to make long-horizon bets on electrification and software — but the initial “reverse premium” and Elliott’s opposition (rejected in 2026) left open whether the price truly reflected the company’s assets, or served the controlling family. President Koichi Ito must rebuild the compressor, forklift and scandal-hit auto businesses under that new umbrella.