If one boils all of automotive history down to its most pivotal and revolutionary chapters, there are four of them, so far. And this image represents a key moment of the last one of them: Toyota, circa 1968. With this lineup of cars Toyota vaulted into prominence in the US, the world’s biggest and richest market. By 1975, it was the largest import brand. In 2015, Toyota sold 2.5 million cars in the US, which put it a mere 4% behind Ford, and well ahead of FCA to be America’s #3 in overall sales, only 19% behind GM.
Globally, Toyota’s is the largest and by far most profitable automaker; its profits are greater than GM, Ford and FCA put together. But Toyota’s greatest achievement and lasting influence is how it has revolutionized the whole industry. One doesn’t even need to drive a Toyota to have benefited from their obsession on quality, reliability and durability; there’s more than a bit of The Toyota Way in every car now.
Chapter 1: the 1901 Mercedes 35 hp, by Daimler. Yes, there were many other automobiles before it, but they were all part of that early experimental period which was really all about making a buggy…horsless. Meaning, they were literally buggies: short and tall, with their engines under the seats or elsewhere, had one or two cylinders, which drove the wheels with various Rube Golberg-worthy solutions. Everyone was experiment, hoping to find the right and lasting solution.
The 1901 Mercedes, as designed by the brilliant Wilhelm Maybach, was utterly revolutionary. It sat low, with a long wheelbase and wide track. It had four cylinders, under a hood in front, with a transmission directly behind it. Its prodigious power, speed, and handling vaulted it well ahead of anything else, and made it a highly successful racing car as well as a touring car. Out of nowhere, the configuration of the modern car, still largely relevant today, was conceived and built. And everyone rushed to imitate it.
Chapter 2: Henry Ford. His Model T reflected the basic configuration of the 1901 Mercedes, with his own adaptations. But Ford’s breakthrough was of course in mass producing the Model T, thus bringing its cost ever lower. But he refused to compromise on quality, and the result was overwhelming. No one could compete with the Ford’s combination of quality, performance and price, for a while. But Ford’s downfall was that he was stuck; he thought he could build the T forever. What was lacking was a vision for continual improvement; not only in quality, but in the design and features of his car.
Chapter 3: General Motors. GM took advantage of Ford’s blind spot, and offered a wide range of cars that were designed primarily as modern consumer goods and status symbols, not just utilitarian vehicles. Although GM adopted Ford’s assembly line techniques, it never adopted his obsession with quality. “Just good enough” was the watchword in terms of quality, and although that was generally good enough during GM golden early years (roughly 1925 – 1955), that increasingly fell by the wayside as size, styling, power and features became increasingly predominant. This lack of commitment to quality would prove to be the fatal flaw of GM, the rest of the domestics, as well as the Europeans.
GM’s model worked well enough as long as the American economy was growing very strongly. Perpetually optimistic buyers were willing to overlook the increasingly iffy quality as long as they felt they could afford to trade in every three years on an even bigger, flashier and more powerful car. But that business model made it vulnerable: as the Big Three cars got ever bigger and flashier, and the economy finally hit the doldrums in the late 50s, a growing number of Americans looked elsewhere. GM-addiction was an expensive habit, and by the mid 50s, a profound change was under way. Import sales soared, as typified by the cheap but rugged VW Beetle. In 1959, imports accounted for over 10% of the market. And Rambler benefited too, for those wanting a somewhat smaller domestic.
But with the exception of the VW, most of the European imports were not capable of surviving American style use and abuse. The combination of the domestic compacts that arrived in the 1959 – 1961 period and the fatality rate of the imports caused a severe retraction of the import’s share by 1961; back to some 4%. But that did not mean that all was well again; hardly.
American compacts continued to grow during the 60s, reflecting the unsustainable automotive inflation and increasingly uneven quality that was coming from Detroit in that era. Meanwhile, the VW continued to sell well, but the same forces that drove the 1950s import boom were still very much alive and growing. Toyota and the other Japanese arrived just at the right time to capitalize on it.
Chapter 4: Toyota. In an effort to help Japan rebuild its industry after the war, American occupation forces brought in American experts in various fields. The most important one would be an invitation to W. Edwards Deming (right), a statistician, engineer, professor, lecturer and management consultant. Deming and a group of other advisers instigated what became the Kaizen (Continuous Improvement”) methods that became a key element in Japan’s meteoric rise in building quality optics, electronics, consumer goods and of course automobiles during the 1950s that elevated Japan to the world’s second largest economy.
While Deming’s principles were being adopted and developed further in Japan, becoming a national obsession, in his home country he and his principles were ignored by the automakers. Only after its near-death experience in 1980, Ford hired Deming to specifically improve the quality of its vehicles. Ford’s execs were surprised to learn that the key to improving quality was not something that just happened on the assembly line; Deming pointed the finger directly at them, telling them that management actions were responsible for 85% of all the problems in building better quality cars. Quality has to start at the very top; it has to be fully ingratiated in every aspect of corporate life; quality can’t be added like a Band Aid.
No company in Japan embraced this method more thoroughly than Toyota. It developed its own method: Toyota Kaizan or “The Toyota Way”, a system of continuous improvement that became a corporate obsession to find ever greater efficiencies along with improvements in quality. And that method not only vaulted Toyota to the top, but has utterly revolutionized the global industry. Toyota arrived in the US right at a time when the quality of domestic cars was hitting a low point. After decades of denial, the domestics eventually were forced to try to learn The Toyota Way, although it was too late in some cases and respects, or not really embraced fully and deeply. And the Toyota Way never ends; Toyota is still constantly improving production efficiency with its latest plants, and preening its quality rankings.
The Europeans were profoundly scared of what they saw happening in the US, and were able to make enough improvements to their quality and durability to hold off a dreaded “Japanese Invasion”. But the threat of it is precisely why European cars became drastically more reliable during the 80s and 90s, even if not at the level of Toyota.
This week, we will look at how all of this manifested itself in some of the key Toyota vehicles from its early days in the US, with CCs as well as a number of vintage reviews, comparisons, and some articles on Toyota from this key time. As well, there will be a random smattering of Toyota posts from Contributors. It’s impossible to do a comprehensive history of Toyota in one week, but we hope to give you a taste of Kaizan, which came in many flavors.