Profitable Toy

Its competitors insist that it is not even a part of Japan's auto industry, and one Japanese automaker sneers that it is "in the toy business." Some toy. Hiroshima's thriving Toyo Kogyo Co. Ltd. outproduced all other Japanese automakers last year and had the industry's fattest profit margin on sales of $231,500,000. This month it turned out its millionth vehicle.

What irritates Japanese automen is that Toyo Kogyo owes its success to a tiny and unconventional vehicle: a three-wheeled truck that is easy to operate over Japan's narrow roads, easy to park on its crowded streets, and so simple to drive that only a motorcycle operator's license is needed.

Irritating Switch. Toyo Kogyo was only a small machine shop when Owner Jujiro Matsuda, inspired by the sight of delivery boys' three-wheeled bikes, decided in the early 1930s to make a three-wheeled truck. His inexpensive Mazda truck was a boon to small businessmen who had neither the money nor the volume to afford bigger, four-wheeled trucks. Toyo Kogyo switched to making rifles and airplane parts in World War II, escaped serious damage from Hiroshima's Abomb, which fell only three miles from its plant, because of freakish blast waves. The firm was too small to attract the attention of U.S. trustbusters at war's end, and quickly resumed production.

Toyo Kogyo still makes 56-c- of Japan's popular three-wheelers, but they now account for only 20% of its production--a switch that irritates Japan's automakers even more than the three-wheeler did.

The company has expanded its line to concentrate on small four-wheeled trucks and four-wheeled midget autos, which now dominate Japan's small-car market. Says President Tsuneji Matsuda. 67, son of the founder: "Times are changing. I won't be sorry to see the three-wheeler disappear, because it will be a sign of increased prosperity."

Coded Lights. Toyo Kogyo's plant now sprawls over 204 acres, and Matsuda is planning to reclaim 1,000 acres of land from the Inland Sea near Hiroshima and invest at least $60 million in new plant and equipment over the next three years. Additional millions will go into welfare projects for his employees, many of whom already live in below-cost company housing; all employees also receive free care in the company's hospital. Though a benevolent employer. President Matsuda also demands unflagging performance. He has installed in his office an intricate system of coded lights that tells him where every key employee is and whether he is alone or has visitors in his office.

Japanese automakers fear that their government, in an attempt to win textile trade concessions from the U.S., will allow U.S. automakers for the first time to as semble and sell cars in Japan. But Matsuda is unconcerned; he figures that his cars are so small that American makes would not compete with them.

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