Toyota Industries - Company History

Taking the responsibility for volume production out of the spinning business

Toyoda Sakichi obtained a patent on a wooden hand loom in 1890[1] and spent the next thirty years and more inventing looms. After repeatedly having to withdraw from companies he had set up with outside partners, he founded Toyoda Boshoku (豊田紡織) with his own capital in 1918 and at last had a test factory of his own[2]. He brought his eldest son Toyoda Kiichiro into the engineering side, and in 1924 they brought the Type G automatic loom, with its non-stop shuttle change, into practical use[3]. Preparations for the new company began with loom building at Toyoda Boshoku's Hioki (日置) plant[4]. In November 1926 Sakichi established Toyoda Automatic Loom Works as a subsidiary of Toyoda Boshoku at Kariya-cho, Hekikai-gun, Aichi prefecture, with capital of ¥1 million[5][6], and his son-in-law Toyoda Risaburo became its first president[7].

In 1929 the company assigned the foreign patent rights to its shuttle-change automatic loom to Platt Brothers, the leading British textile-machinery maker, for about £100,000[8]. That consideration was held back as funds for the domestic motor-car business Sakichi had set as his next subject[9]. In September 1933 Toyoda Kiichiro created an automobile department inside the company[10], taking on not only body assembly but the making of special steels and machine tools in house[11]. Permission to build 2,000 vehicles a month came in 1936, but the ¥30 million needed for the factory was beyond the means of a loom maker capitalised at ¥6 million[12], and in August 1937 the automobile division was separated off as Toyota Motor Co., Ltd., capitalised at ¥12 million[13].

War controls and the seizure of plants for reparations

The spinning off did not stop with cars. In March 1940 the steelmaking division was separated as Toyoda Steel Works — today Aichi Steel[14] — so that the materials business too left the parent. Under the wartime control regime loom production was halted stage by stage under rationing, and the Kariya, Obu and Sako (栄生) plants were converted to munitions[15]. After the surrender the company promptly restarted its founding trade of looms and spinning frames, but GHQ, aiming to demilitarise and democratise the Japanese economy, issued one directive after another on reparations, on the dissolution of the zaibatsu (the family-controlled industrial combines) and on ending wartime compensation[16].

On 10 February 1946 GHQ ordered the Obu and Sako plants held as facilities designated for reparations seizure[17]. The main Kariya plant escaped designation, so the 800 looms then going into production under the reciprocal-export programme were not disrupted[18]. As relations between the United States and the Soviet Union changed, reparations policy towards Japan softened: part of the land and buildings at Sako was released in April 1947, and in March 1948 both the Sako and Obu plants were released in full[19]. Even so, some 80,000 spindles of spinning machinery and about 670 looms were bought by the government as part of the reparations goods and shipped out to Indonesia and the Philippines[20].

The break-up of the combine, and the Toyota shares left unsold

The reorganisation on the capital side ran deeper still. In September 1947 Toyoda Sangyo (豊田産業) was deemed a holding company for the Toyoda businesses, designated and dissolved; the trading arm it had run passed to Nisshin Tsusho (日新通商), today Toyota Tsusho, which was founded in July 1948[21]. Toyoda Automatic Loom Works itself was designated under the Law for the Elimination of Excessive Concentration of Economic Power on 7 February 1948 and ordered to reorganise by making each of its three plants — Kariya, Obu and Sako — an independent company[22]. It applied for release, explaining that the three plants were tightly bound together in castings, forgings and components and that dividing them would damage efficiency, quality and cost. On 19 November that year the designation was lifted, on condition that the company dispose of the securities it held[23].

Among the holdings to be disposed of were 299,360 shares of Toyota Motor Co., 21.0 per cent of the total, held by Toyoda Automatic Loom Works[24]. The company began selling, but the loosening of American occupation policy towards Japan reached the administration of the deconcentration law as well, and in February 1949 it broke off the disposal with 107,960 Toyota Motor shares still unsold[25]. In May of that year it listed its shares to coincide with the reopening of the Tokyo Stock Exchange[26]. The founding textile-machinery trade boomed on the capacity expansion that began in 1950 and on Korean War procurement, but when that procurement ended in 1951 demand turned into a long slump[27].

Contract manufacturing for Toyota, and forklift trucks

Sales of textile machinery fell from $20.5M (¥7bn) in the year to March 1952 to $8.2M (¥3bn) in the year to March 1954[28]. Under president Ishida Taizo the business was rationalised and modernised[29], and contract production for Toyota Motor was chosen as the next pillar. Manufacture of the Type S passenger-car engine began in December 1952[30], and in August 1953 the new Kyowa plant took the company into vehicle assembly[31]. A vehicle division was launched at the same time, and Toyoda Vehicle Service (豊田車両整備) was established to put a repair organisation in place[32].

In March 1956 the company began building forklift trucks itself[33]. Because it could use, exactly as it stood, the nationwide sales network Toyota Motor Sales had already built, it secured the leading position in Japan within a short time[34]. Towing tractors and shovel loaders followed as the range widened, and the forklift business grew until it stood as a division in its own right[35]. Research and development on all manner of new products was going on inside the company in the same period; many of those efforts were abandoned along the way, and of them forklifts and farm machinery were what grew into independent divisions[36].

Mexico and farm machinery — two misreadings, of protection and of timing

In the summer of 1952 Matsui Isaku (松井伊作), a managing director then touring Central and South America as a member of a Japanese industrial mission, was asked by the Mexican government to establish a textile-machinery factory in the country[37]. Mexico was a cotton-producing nation with roughly one million spindles and some 40,000 looms, yet more than half of that stock was over forty years old, and 95 per cent of its textile machinery was second-hand American equipment[38]. In December 1953 Ito Chubei (伊藤忠兵衛), Ishida Taizo and others travelled to Mexico and secured the full backing of President Ruiz Cortines, obtaining from the ministry of the economy a ten-year exemption from national, local and import taxes together with a guarantee that imports of textile machinery would be prohibited once operations began[39]. On 4 June 1954 Mexico Toyoda (メキシコ豊田株式会社) was incorporated with capital of 50 million pesos, Toyoda Automatic Loom Works contributing machinery and equipment worth 29 million pesos in kind[40].

The import ban on which the economics rested never came. In February 1957, with the legislation through its formal stages, the spinners' association ran advertisements against it in the newspapers, and the ban on imports of new machinery finally promulgated in May 1958 was repealed little more than a month later under opposition from textile firms with close ties to foreign manufacturers[41]. In a market stripped of protection the foreign makers attacked with deferred payment terms of five to eight years, and working capital ran dry[42]. In April 1959 the joint-venture partner, the Mexican development bank (NF), cut off the flow of finance, and on 13 October it demanded that Toyoda take over roughly $6.4 million of investments, loans and guarantee obligations combined[43]. Toyoda Automatic Loom Works signed an agreement on 9 November to transfer its shares and hand over management, and on the 11th of the same month Mexico Toyoda was renamed Siderurgica Nacional S.A.[44]

The other diversification was farm machinery. At the end of December 1954 the company began research into agricultural tractors as an outlet for the Type S engine, which had not sold well[45], and by July 1955 it had shifted its axis to power tillers, which fitted Japan's smallholder farming as they were. Sales were entrusted at first to Toyota Tsusho, but a trading house had its limits in experience of the rural market and in technical guidance, so the sole-agency contract was terminated and the company built distributors of its own, beginning with Tohoku Toyota Noki (東北トヨタ農機) in August 1960 and reaching eight sales companies by the end of 1962[46]. In April 1961, with the full introduction of the divisional system, a farm machinery division was created[47]. But in 1962, the year the national network was completed, the industry's output of power tillers peaked at 480,000 units and went flat the following year[48]. Toyoda Automatic Loom Works cancelled its plan for a dedicated tiller factory and gave up cost reduction through volume[49].

Contract production of Toyota vehicles, beginning at the Nagakusa plant

In May 1967 the Nagakusa plant began operating at Obu in Aichi prefecture[50], putting inside the company a works dedicated to building vehicles to order for Toyota Motor. The Takahama plant followed in September 1970[51] and the Hekinan plant, dedicated to engines, in January 1982[52], so that the capacity to take contract work kept multiplying. Sales of industrial vehicles grew from $15.8M (¥6bn) in FY1966 to $185.6M (¥48bn) in FY1977, in contrast with textile machinery, which over the same period rose only from $17.2M (¥6bn) to $80.5M (¥21bn)[53]. In October 1988 the company set up a joint venture to manufacture industrial vehicles in the United States[54], and production ceased to be confined to Japan.

The founding side had not stopped either. In May 1980 the company began manufacturing air-jet looms[55], renewing its products in the shuttleless field. In December 1995 it established Kirloskar Toyoda Textile Machinery in India, a joint venture with the Kirloskar group, and entered local manufacture of textile machinery[56]. In October 1997 it formed ST-LCD (エスティ・エルシーディ) with Sony to manufacture liquid-crystal display devices[57], and in October 1998 a company with Ibiden to manufacture plastic package substrates for IC chips[58], reaching into fields outside machinery.

Overseas production resumed through joint ventures, and compressors

Manufacture of compressors for car air conditioners had begun in January 1960[59]. After building up supply to Denso at home, the company established a joint venture with Nippondenso — today Denso — in January 1989 to manufacture car air-conditioner compressors in the United States[60]. In September 1998 it set up a manufacturing company in Germany, again with Denso[61]. The line had originally arisen inside the textile machinery division, where compressors for car coolers and friction welding machines were launched as new products[62].

Overseas production moved on the industrial-vehicle side as well: in October 1988 the company established Toyota Industrial Equipment, a joint venture with Toyota Motor, to manufacture industrial vehicles in the United States[63]. Twenty-nine years after handing over the management of Mexico Toyoda in 1959[64], Toyoda Automatic Loom Works again held a production base abroad. In August 1994 it set up a joint venture in China with the Taiwanese machinery maker 六和機械 and Toyota Tsusho to make castings and forgings[65], and in March 1995 a joint venture in France with Manitou BF and Toyota Motor to manufacture industrial vehicles[66].

The BT Industries acquisition and world leadership

In April 2000 the company announced that it would acquire 25.1 per cent of the issued shares of BT Industries of Sweden, the world leader in small indoor materials-handling equipment[67]. In July of the same year it took more than 90 per cent for SKr 7.7 billion, making BT a subsidiary[68]. Toyoda Automatic Loom Works, already first in the world in forklift units built, lifted its global share of materials-handling equipment from 13 to 21 per cent through the acquisition, reaching a scale of $5.8 billion in consolidated sales and about 20,000 employees worldwide[69].

As industrial vehicles moved to the centre of the business, the name and the organisation moved with them: in April 2001 the company took over the L&F sales division from Toyota Motor, and in August of that year it changed its trading name to Toyota Industries[70]. In May 2003 it made Aichi Corporation, a maker of aerial work platforms, a subsidiary[71]. In the year to March 2009 it fell into a net loss for the second year running[72], the global financial crisis showing in the figures across both contract manufacturing and industrial vehicles.

The turn to logistics, and the exit from the market

As the competition shifted from selling forklifts one at a time to proposing the automation of whole warehouses, Toyota Industries made Bastian Solutions of the United States a subsidiary in April 2017 and acquired Vanderlande Industries of the Netherlands the following month[73]. Bastian is a major logistics systems integrator, and Vanderlande a company that runs logistics-solutions businesses worldwide[74]. In that same year to March 2017, textile machinery had fallen to about 3.96 per cent of consolidated sales[75]. In March 2013 the company had made Cascade of the United States, a maker of forklift attachments, a subsidiary, and in October 2022 the Ishihama plant began operating[76]. Consolidated sales in the year to March 2023 were about $24.2B (¥3.4tn), and profit attributable to owners of the parent about $1.4B (¥193bn)[77].

In June 2025 a special-purpose company funded by Toyota Fudosan and chairman Toyoda Akio proposed to take Toyota Industries private through a tender offer at $109 (¥16,300) a share, and the board gave its assent[78]. On top of an opening price below the market level, Elliott Management of the United States opposed the offer, arguing that the shares were worth $175 (¥26,134) each. The offer price was raised twice, from $109 (¥16,300) to $126 (¥18,800) and then to $130 (¥20,600). In January 2026 Elliott was reported to be weighing a rival tender offer of its own, but in the end it agreed to tender its shares.

On 24 March 2026 the tender offer succeeded, with 63.60 per cent of the shares tendered. The purchase came to about $37.3B (¥5.9tn), the largest merger or acquisition between Japanese companies on record[79]. Toyota Industries will be delisted on 1 June 2026. The shareholding that began in February 1949, when the company broke off the disposal required as a condition of release from the deconcentration law with 107,960 shares still unsold[80], arrived seventy-seven years later at the acquisition of every share by the Toyota camp.