Hashimoto Founds the Nissan Motor Company Summary

  • Last updated on November 10, 2022

Masujiro Hashimoto formed a company in 1911 that would lead to the establishment of Nissan, one of the most successful Japanese automobile companies of the twentieth century.

Summary of Event

Before World War II, the Japanese automobile industry was quite small. Most of the country’s few cars had been produced from kits sent from the United States and the United Kingdom. A handful of Japanese companies in the early twentieth century had attempted to produce low-priced vehicles, but these were far outnumbered by the rickshaws and carts that were the main means of transportation in Japan. In 1924, for example, when American companies produced 3.1 million cars and U.S. automobile registrations totaled almost 18 million, Japanese passenger car registrations came to 17,939, while there were 105,000 registered rickshaws, 3.7 million bicycles, and 374,200 ox- and horse-drawn wagons. In those years, military contracts for trucks accounted for most motorized vehicle sales. Nissan Motor Company Automobiles;Japanese manufacturers Manufacturing;automobiles Datsun automobiles [kw]Hashimoto Founds the Nissan Motor Company (1911) [kw]Nissan Motor Company, Hashimoto Founds the (1911) [kw]Motor Company, Hashimoto Founds the Nissan (1911) Nissan Motor Company Automobiles;Japanese manufacturers Manufacturing;automobiles Datsun automobiles [g]East Asia;1911: Hashimoto Founds the Nissan Motor Company[02710] [g]Japan;1911: Hashimoto Founds the Nissan Motor Company[02710] [c]Trade and commerce;1911: Hashimoto Founds the Nissan Motor Company[02710] [c]Organizations and institutions;1911: Hashimoto Founds the Nissan Motor Company[02710] [c]Manufacturing and industry;1911: Hashimoto Founds the Nissan Motor Company[02710] Hashimoto, Masujiro Aikawa, Yoshisuke Kawamata, Katsuji

Masujiro Hashimoto was one of a handful of mechanics who attempted to enter the automotive manufacturing field in Japan in the early years of the twentieth century. He traveled to the United States in 1902 to study the manufacture of internal combustion engines and returned home in 1911 to found the Kwaishinsha Motor Car Works. Kwaishinsha Motor Car Works His new company manufactured small passenger cars driven by twelve-horsepower engines. To form the car’s name, he used the first letters of the surnames of three of his associates, Den, Aoyama, and Takeuchi, and then added the word “son,” but because the sound “son” in Japanese is similar to the sound for the word meaning “bankruptcy,” he changed the word to “sun” and arrived at the name Datsun.

The handcrafted Datsuns were well received, which in this period meant that Hashimoto was able to sell between ten and twenty of them each year. In 1923, however, the company’s factory was destroyed in an earthquake, and in 1926 Kwaishinsha was forced to merge with Jidosha Seizo Company Ltd. in order to survive.

In 1932, the company, which had been renamed DAT Jidosha Seizo, came out with a car with a 500-cubic-centimeter engine. Although the company was still small by American standards, it was one of the larger Japanese auto firms of the period. In 1932, the entire Japanese auto industry turned out 880 units, all for domestic use.

At this time, most of the Japanese companies manufactured cars by imitating American and European models. Tokyo Gas and Electric, a manufacturer of home appliances, and Mitsubishi Shipbuilding, part of the Mitsubishi zaibatsu (industrial group), produced some trucks for the army. For the most part, however, the zaibatsus showed little interest in motor vehicles. The military distrusted the zaibatsus and preferred to buy supplies elsewhere. The Mitsui Bank, part of the Mitsui zaibatsu, financed the Ishikawajima Shipbuilding Company’s foray into automobiles in 1919.

Yoshisuke Aikawa, who had graduated from the Tokyo Imperial University in 1904 and then spent time in the United States studying manufacturing, formed the Tobata Casting Company Tobata Casting Company in 1910. This company became a major supplier of parts for several automobile manufacturers. Although Aikawa agreed with the prevailing opinion that military requirements would shape the industry in the short run, he believed that in time the Japanese people would take to passenger cars. He thus organized a corporate shell that he called Motor Vehicle Industries, which then approached DAT with a takeover bid. DAT, which in 1931 produced ten vehicles, was receptive. Tobata and another of Aikawa’s companies, Nippon Industries, purchased DAT in 1932, then acquired the automobile operations of Ishikawajima. In 1933, Tobata and Nippon spun off the motor vehicle unit into a new company, which Aikawa named the Nissan Motor Company. Most histories of the automobile industry list that year as the one in which Nissan was founded, but as the above discussion makes clear, its complex origins go back as far as 1911.

Significance

Nissan and Toyota Toyota Motor Corporation dominated the small Japanese automobile industry before and during World War II. Nissan’s growth resulted in large part from an arrangement with Graham-Paige, an American firm that provided it with technical assistance and machinery as well as helped it to create a modern automobile factory. In 1941, total Japanese automobile production came to 46,648 vehicles, of which 19,688 came from Nissan and 14,611 from Toyota.

Nissan made other overtures to companies based in the United States. In 1939, Aikawa proposed a joint venture with General Motors Japan that was rejected. He then approached Ford Motors Ford Motor Company Japan and suggested a merger of Nissan into Ford. This offer also was declined.

That same year, Nissan’s automobile production was shifted to Manchuria and the firm was renamed Manchurian Motor Company. Manchurian Motor Company The parent company, which became Nissan Heavy Industries, turned out aircraft engines and other military products. When the war ended, Manchurian Motor Company was seized by the Soviet Union and the Japanese parent was taken over by American occupiers.

After the war, Nissan and Toyota petitioned General Douglas MacArthur for permission to resume production, which was granted with some restrictions. In 1946, Nissan turned out a few trucks, with passenger cars following in 1948. In 1949, the company once again took the name Nissan Motor Company.

In the late 1940’s, most of Japan’s cars still were imported from the United States. In 1948, Japanese companies produced 28,700 four-wheeled vehicles, of which 381 were passenger cars. All restrictions on the industry were removed the following year, when Japan manufactured 1,070 passenger cars.

During the Korean War, Japanese industry received massive stimulation from American orders for trucks. During the first nine months of 1951, Nissan sold 4,325 cars and trucks to the American military. A wealthier Japanese population also started buying cars and trucks.

In 1952, Nissan formed a partnership with Great Britain’s Austin Motors under which it would manufacture Austins in Japan. By the mid-1950’s, Nissan had become Japan’s leading automobile manufacturer, and the company’s leader, Katsuji Kawamata, embarked on a major expansion effort. In 1958, 50,600 Japanese cars were produced, most by Nissan and Toyota, and in the following year, 78,598 were turned out. Even then, sales of small, inexpensive, three-wheeled vehicles approximately doubled those of cars in Japan.

Nissan and Toyota decided to test the American market, believing that the domestic market for passenger cars was saturated. They received no encouragement from the Japanese government, which saw the United States as a reliable source for inexpensive, well-made cars. With this source available, the government saw no need to develop a large domestic industry.

Nissan sponsored two studies of the American market and came to several conclusions based on the results: Americans would not buy cars backed by weak service organizations; no Japanese car could compete with the popular Volkswagen Beetle, which by then was solidly entrenched; there was a sizable potential market for small, well-constructed, inexpensive imported cars; and in order to convince American drivers that Japanese cars were of high quality, the company would have to offer extended warranties.

The key figure in the Japanese incursion into the American market was Yutaka Katayama, who had started his career at Nissan in advertising. Katayama had visited the United States several times and had a keen knowledge of promotion. His plan was to select franchisees with great care and to wait to start operations until sufficient parts and trained personnel were in place to guarantee superior service. Sales outlets would be selected on the East and West Coasts, where Volkswagen Volkswagen automobiles had blazed the way and foreign cars were already popular. For the time being, Katayama would bypass the South and the Midwest. Woolverton Motors of North Hollywood was the West Coast dealer chosen, and Luby Chevrolet of New York had the East Coast.

In 1957, Nissan sent one of its small sedans, the Cedric, to the Los Angeles Automobile Show, where it met with indifference. The Cedric was the company’s top-of-the-line model, but it was unsuited to American roads and stodgy in design. The following year, Americans purchased 83 Cedrics. Sales of Cedrics for 1959 came to 1,131. Encouraged, Nissan organized Nissan Motor Corporation U.S.A. and planned for many more franchisees. Sales rose for a while but then declined. Nissan, along with Toyota, which had the same experience with its Toyopet, withdrew to study the situation.

Late in 1959, Nissan exported the Datsun 200 series to the United States, again to an indifferent reception. The following year the company sent the 310 series, led by the Bluebird, which might be considered the first Japanese car with meaningful appeal to Americans. Even so, sales were hardly spectacular. In 1962, Nissan and Toyota sold fewer than 3,000 cars between them in the American market. In contrast, that year Volkswagen sold 240,143 cars in the United States, and even Jaguar sold 4,442 cars.

Soon thereafter, however, Nissan accomplished its goal of creating and marketing what was, to all intents and purposes, a small American car. Datsun dealerships sprouted throughout the country, numbering 640 by the end of the 1970’s. From consumers’ perspective, the Datsun seemed to combine aspects of the Beetle and the Chevrolet, and in so doing it obtained an increasing share of the market.

Nissan displayed a sensitivity to the American market that European companies, Volkswagen included, lacked. The company produced a wide range of cars for Japanese customers, from minis to luxurious limousines, but in the 1970’s it sent to the United States only a handful of low-priced and intermediate models, finding a niche and not moving out of it until its position was solid. In the mid-1960’s, the midrange Bluebird, priced between comparable models made by Chevrolet and Volkswagen, was a major seller. As American tastes shifted to compact cars, Nissan sent the lower-priced PL600 series, which proved even more popular. Flexibility in planning, integrity in manufacturing, excellence in service, and shrewdness in marketing were hallmarks at Nissan.

Almost 19,000 Datsuns were sold in 1965, placing the company sixth in terms of American imports, ahead of Simca and Renault but behind Volkswagen and Volvo. A veritable Japanese car mania then developed among American buyers. In 1970, 703,672 Japanese cars were sold in the United States. Toyota provided 184,898 of them, second in import sales behind Volkswagen. Nissan was in third place, selling 100,541 Datsuns.

At this point, it appeared that Datsun sales had reached a plateau. This was a result of several factors, one of the more important being the growing strength of the yen, which caused prices of Japanese imports to rise. By 1972, the Datsun 1200 sold for $1,976, against $1,960 for the Ford Pinto. Then, in 1973, the world was struck by the soaring price of oil. Gasoline rose sharply in price and for a while was hard to come by. Large American “gas guzzlers” lost popularity, whereas fuel-efficient Japanese cars were in demand. This situation ended with the easing of the gasoline supply. Datsun sold 319,000 cars in the United States in 1973; the 1974 figure was 245,000.

As Americans became accustomed to paying more for Japanese cars than for American cars, Datsun’s sales rose again, hitting 488,217 in 1977. American customers gave Japanese cars high marks for reliability, justifying the higher prices. By then, Nissan was the world’s third-largest car manufacturer, behind General Motors General Motors and Toyota but ahead of Ford and Chrysler. Toyota was ahead of Volkswagen in the American market, while Nissan was neck and neck with the fading German company.

In the late 1970’s, Nissan successfully entered the higher end of the American automobile market. In 1978, it exported the 810, soon to be renamed the Maxima. The Maxima and Toyota’s similarly targeted Cressida did poorly at first, as Americans accustomed to seeing Japanese cars compete with Chevrolets and Fords had to be convinced that these models were the equals of Buicks and Chryslers. In the 1980’s, however, the cars proved to be successful, and more luxury models appeared.

In 1982, Nissan made two significant announcements. First, to harmonize its world strategies, it would phase out the Datsun nameplate and market its cars in the United States as Nissans. Second, it intended to build a new manufacturing plant in Smyrna, Tennessee. This $490 million facility was opened in 1991, along with an $80 million Research and Development Technical Center in Farmington Hills Michigan. The first Nissan midsized sedan, the Altima, was manufactured in 1992 at the Smyrna facility and became the best-selling new nameplate in the United States in the following year. In addition to the Altima, the Smyrna plant began producing the new 200SX line and the fourth-generation Sentra.

In 1998, Nissan Motor Corporation in the U.S.A. and Nissan North America, Inc., merged into a single company called Nissan North America, Inc., and in the following year Nissan entered into a global partnership with Renault of France, a move following earlier efforts by Nissan to obtain a European foothold through the purchase of an equity interest in Motor Iberica, a Spanish manufacturer of trucks, vans, and buses. Nissan also formed an alliance with Alfa Romeo, an Italian specialty car manufacturer, to build small cars at an Alfa Romeo plant and conducted negotiations for a similar arrangement with Volkswagen. Pursuant to these global strategies, Nissan announced in 1999 a joint project with Renault in the unveiling of a new line of sport-utility vehicles.

In nearly a century of doing business, Nissan clearly established itself as a major and highly adaptable competitor in the world automotive marketplace. Nissan Motor Company Automobiles;Japanese manufacturers Manufacturing;automobiles Datsun automobiles

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Chang, C. S. The Japanese Auto Industry and the U.S. Market. New York: Praeger, 1981. Brief work offers interesting information on the early history of Nissan.
  • citation-type="booksimple"

    xlink:type="simple">Cole, Robert E., ed. The Japanese Automotive Industry: Model and Challenge for the Future? Ann Arbor: University of Michigan, Center for Japanese Studies, 1981. Collection of essays includes several that deal with Nissan’s history.
  • citation-type="booksimple"

    xlink:type="simple">Duncan, William. U.S.-Japan Automobile Diplomacy: A Study in Economic Confrontation. Cambridge, Mass.: Ballinger, 1973. Describes attempts on the part of American manufacturers to limit Japanese access to the U.S. domestic market.
  • citation-type="booksimple"

    xlink:type="simple">Odagiri, Hiroyuki, and Akira Goto. Technology and Industrial Development in Japan: Building Capabilities by Learning, Innovation, and Public Policy. New York: Oxford University Press, 1996. History of the development of industry in Japan examines the adaptation of Western technologies as well as Japanese innovation. Chapter 9 is devoted to discussion of the Japanese automobile industry. Includes bibliography and index.
  • citation-type="booksimple"

    xlink:type="simple">Rae, John. Nissan/Datsun: A History of Nissan Motor Corporation in U.S.A., 1960-1980. New York: McGraw-Hill, 1982. Written with company cooperation, this work contains a short history of the parent company but concentrates on Nissan in the American market.
  • citation-type="booksimple"

    xlink:type="simple">Sobel, Robert. Car Wars: The Untold Story. New York: Dutton, 1984. Focuses on Japanese success in the American market but includes several chapters on Japanese automotive history.
  • citation-type="booksimple"

    xlink:type="simple">U.S. Strategic Bombing Survey. Military Supplies Division. Japanese Motor Vehicle Industry. Washington, D.C.: Government Printing Office, 1946. An excellent study of the Japanese automobile industry before World War II.

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