
In 1933, Kiichiro Toyoda, son of inventor Sakichi Toyoda, established an automotive department within Toyoda Automatic Loom Works, marking the company's shift from textile machinery to automobile manufacturing. By January 1934, the company formally committed to producing automobiles, culminating in the completion of the prototype Toyota Type A engine in September of that year. The first prototype sedan, the A1, followed in May 1935. Recognizing the demand for commercial vehicles, Kiichiro prioritized truck production, leading to the launch of the G1 truck in November 1935. Modeled on a Ford truck and priced competitively at ÂĄ2,900, the G1 gained traction, with 379 units produced.
In April 1936, the company produced its first passenger car, the Model AA, which was priced at ¥3,350—significantly cheaper than Ford and GM models. That same year, the company's first export order saw four G1 trucks shipped to northeastern China. On September 19, 1936, the Japanese government officially recognized Toyoda Automatic Loom Works as an automotive manufacturer.
Vehicles were initially branded as "Toyoda," reflecting the family name. However, after a public logo design competition, the company adopted the name "Toyota" in 1936. The name was chosen for its simplicity, its auspicious eight-stroke kanji in Japanese, and to avoid associations with traditional farming, as "Toyoda" translates to "fertile rice paddies." This branding shift was critical in establishing the company’s modern identity.
In 1937, the automotive division was spun off into the Toyota Motor Company, Ltd., with Kiichiro’s brother-in-law, Rizaburo Toyoda, serving as the first president and Kiichiro as vice president. The Japanese government further bolstered the new company by restricting imports from foreign automakers like Ford and GM, creating a favorable environment for Toyota’s growth. By the end of the decade, Toyota had firmly established its presence in Japan’s automotive industry, setting the stage for its eventual global expansion.