Renaming to Tokyu and splitting the rail business into Tokyu Railways: the shift to a holding company (2019)

Undoing, by its own hand, the vertical integration held since “Dai-Tokyu”

At the centre of this decision is the point that Tokyu, by its own hand, undid the vertical integration it had held since 1922 — developing the line around the railway and supporting the railway with the profit. The integrated management of railway and real estate, idealized at the Tama Garden City, produced a cycle in which a grown line-side population enriched the railway; but it was also a structure that kept a railway, long saddled with heavy capital burdens, at the centre of the parent. Becoming a holding company can be seen as the organizational turn that moved that railway out of the parent and put development and asset management in the leading role. The company that let go of wartime consolidation’s “Dai-Tokyu” after the war has now, by its own hand, split off the railway and moved it to an operating subsidiary beneath a holding company.

Dropping the two characters for “electric railway” from the corporate name is thought to have carried a symbolic meaning. The railway remains the base of the Tokyu group still, but it has withdrawn from the centre of decision-making. In the history of Tokyo’s private railways growing as one with their lines, a structure that places the railway in a subsidiary and puts real estate and asset management in the parent is still a minority. What does it mean for a railway company to become a holding company? — that question is left to the balance of power within this vessel, over which of railway and real estate will lead the group’s growth. The answer, it seems, will be shown by Tokyu’s capital allocation from here on.