Sakichi Toyoda and Toyota Industries Corporation backed by the former Mitsui & Co.
Forming the roots of our strong relationship with Toyota Motor Corporation today
By the 1890s the former Mitsui & Co.* had expanded its business activities beyond that of a normal trading company, and began delving into a variety of industries, trying its hand at establishing, operating, and providing support to a number of companies. An example of this is the support it provided to inventor Sakichi Toyoda-who formed the foundations of Toyota Motor Corporation-and Toyota Industries Corporation.
In 1897, Sakichi Toyoda completed his Toyota Wooden Power Loom, and established a company named Toyota Shoten, to manufacture and sell his looms. He also operated Otogawa Cotton Weaving. Co., which used his own power looms to manufacture cotton. One day, the head of cotton inspection at the former Mitsui & Co. discovered cotton with a quality consistency unseen in cotton from traditional handlooms.
Further investigation by the Nagoya Branch found that the cotton was spun by Sakichi Toyoda's power loom. Recognizing Toyota Shoten's superior technological capabilities, in 1899 the former Mitsui & Co. signed an exclusive ten-year sales contract with the company, and established wholly owned company, Igeta Shokai, named after the Mitsui mark. Igeta Shokai conducted the manufacture and sales of the power looms on behalf of Toyota Shoten, while Sakichi Toyoda became Igeta Shokai's chief engineer and focused his efforts on making further improvements to the power loom.
At the time, the Toyota power loom was extremely low cost-sold at just 93 yen compared to 872 yen for a German power loom-and was also easier to operate. The looms sold so well that Igeta Shokai was initially unable to keep up with orders, and Toyota power looms become well known across the country. However, an economic slump came at the turn of the century, and China's Boxer Rebellion caused exports to China to be halted. This led to the downsizing of the spinning industry and forced the eventual closing of Igeta Shokai.
Nonetheless, the former Mitsui & Co. continued to provide funds necessary for the financial growth of Toyota Shoten, which had by then changed its name to Toyota Shokai. In 1906 the former Mitsui & Co. proposed that Toyota Shokai be reorganized into a stock company and introduce capital from large-scale cotton spinning companies. Sakichi Toyoda accepted the proposal, and in December of that year established Toyota Loom Works, with 1 million yen of capital. This company was also affected by economic downturn, and slow sales meant that the cooperative ventures between Sakichi Toyoda and the former Mitsui & Co. were unable to produce the desired business results. Nevertheless, the Nagoya Branch continued to support the company, and the cooperative relationship was maintained. Eventually, in 1926, Toyota Automatic Loom Works, Ltd. (currently known as Toyota Industries) was established, and the business began its road toward success.
The relationship between the former Mitsui & Co. Sakichi Toyoda continued through the years, as Toyota Automatic Loom Works established an automobile division in 1933, and created the Toyota Jidosha Kogyo which evolved into Toyota Motor Corporation, and our strong connection still continues to this day.
*Legally speaking, there has been no continuation between the former Mitsui & Co. and the current Mitsui & Co.