BookTitleToyota Tsusho 70-Year History

Summary

Toyota Tsusho 70-Year History

Cotton thread market crash (1952)8 Escape from the Economic Depression Following the SpecialProcurement EconomyThe special procurement that lasted from 1950 to the first half of 1951 andsaved Japan’s economy also had an impact on Nisshin Tsusho. Since the textileindustry, which made up most of the company’s trade, recovered due to the specialprocurement, the company was inundated with orders for spinning machines, etc.,and its business performance improved greatly. However, when the cotton marketcrashed in Spring 1951, in part as a result of restrictive government monetarypolicies, the textile industry fell into its first postwar recession. Not only was thecompany forced to stockpile textiles, but cancellations of exports of cotton threadand fabric piled up due to the deteriorating foreign currency situation in Pakistanand import prohibition in Indonesia. The sales report for the latter half of fiscal1951 (October 1951-March 1952) states,“There was no way to recover from theslump in actual demand, both domestic and foreign, that has affected the entiretextile industry, and in the end we recorded a loss of 24.8 million yen.”To resolve this crisis, the trade of the Textile Department was narrowed toone stream of actual demand, and the focus was shifted to thread sales andconsignment sales and purchases. At the same time, the Textile Departmentwas reduced, and a Temporary Management Department was formed to collectaccounts receivable. In addition, emergency measures were taken, such asreassigning key sales team members, screening business partners, and reducingexpenses. Each department and office reviewed its profits, communication wasmade more thoroughly, and trade, which had been done by momentum, wasimproved. The company also stopped hiring new staff.Upon reflection that its ordeals were caused by overdependence on textiles andtextile machinery in the corporate structure, the company proceeded with thediversification of the products it sold.Section 2 Global Business Reaches its Stride1 Beginning of Import AgencyThe company’s overseas business started as an import agency business of theGovernment Trade Corporation (four government corporations of mining, textile,food, and raw materials). In particular, before 1949, when the exchange rate wasset at 360 yen to the dollar, the exchange rate was different for each product,so the staff was kept extremely busy with preparation of a huge number ofdocuments, such as export inquiry reports, export licenses, shipping applications,cost accounting documents from the other parties necessary for import operations,etc. The main task at that time was how quickly export licenses could be obtained.In August 1947, limited private trade was allowed, and in August 1948, shortlyafter Nisshin Tsusho was established, it became possible to conclude directcontracts with buyers. The first inquiries were for cotton spinning looms fromIndia, Pakistan, the U.K. and Hong Kong, and the company successfully exported224 Toyoda automatic looms to India. This was the first export of the companyafter the war.In addition, an order was received from Egypt for one SA-type small car from56