Toyota Grew Out of a Loom Maker and a £100,000 Patent Sale

Sakichi Toyoda was born on February 14, 1867, the son of a carpenter and part-time farmer in what is now Kosai, in Shizuoka prefecture. He became an inventor of looms. He built his first, a wooden hand loom, in 1890 and received a patent for it in 1891.

For more than 30 years he and his engineers improved them. In 1924 the company completed the Type G, a fully automatic loom that could change shuttles without stopping. It also stopped itself when a thread broke. To make it, Sakichi founded Toyoda Automatic Loom Works in 1926. His son Kiichiro, an engineer, did much of the inventing; Toyota’s own history credits him with the shuttle-change mechanism.

1929: The English buyer

The Type G sold well beyond Japan. Toyota’s history notes that 205 of them were installed in weaving plants in India. That worried Platt Brothers of Oldham, England, one of the big loom makers of the day. Platt decided to buy the patents to protect its key markets.

A Platt officer met Sakichi and Kiichiro in Nagoya on June 7, 1929. The negotiations ran through the trading house Mitsui. Kiichiro then traveled to England, by way of the United States, and on December 21 he signed the patent assignment at Platt.

The agreed price was £100,000, payable in four yearly installments of £25,000, each worth about ¥250,000 at the time. The deal did not go smoothly. According to AllAboutLean, Platt later complained that the data it received was not good enough and asked to pay less, while the Toyodas blamed Platt’s manufacturing. In July 1934 the unpaid balance of £61,500 was cut to £45,000. Platt paid £83,500 in all.

The money and the story

The trip mattered as much as the money. Two men who traveled with Kiichiro later said he spent much of it looking at Ford’s car plants and researching machine tools.

Toyota’s British website tells the simple version: Sakichi gave the proceeds of the Platt deal to Kiichiro to develop cars. The record is less tidy. Toyota’s own detailed account of the deal, in its 75-year history, does not say how the payments were used. AllAboutLean, which has written about the Toyodas at length, says the popular deathbed version, in which Sakichi begged his son to start a car company and handed him the Platt money, is mostly not true. Sakichi died in 1930. What is clear is that the loom company had cash, patents, machine shops and engineers, and that the car business started inside it.

1933: Cars in a loom factory

In 1933 Kiichiro set up a car department within Toyoda Automatic Loom Works. Its first Type A engine was completed in 1934. A prototype passenger car, the A1, followed in May 1935, and the G1 truck in August 1935. Mass production of the Model AA passenger car began in 1936.

Toyota’s museum dates the change of product name from Toyoda to Toyota to 1936. Toyota UK says the new name came out of a public contest that drew thousands of entries. Written in Japanese katakana, Toyota takes eight strokes, and eight is considered a lucky number. On August 28, 1937, the car department became a separate company: Toyota Motor Co., Ltd.

¥50 trillion

In the fiscal year to March 31, 2026, Toyota Motor reported sales revenues of ¥50.68 trillion, up 5.5% and the highest in its history. It sold about 9.6 million vehicles on a consolidated basis, and Toyota and Lexus sales together came to nearly 10.5 million. Profit was another matter. Operating income fell 21.5% to ¥3.77 trillion, with US tariffs costing about ¥1.38 trillion, Just Auto reported.

The original loom company still exists, now as Toyota Industries.

What the record shows

• The first product built the skills for the second. Precise looms gave the Toyodas engineers, machine shops and a habit of patenting.
• Licensing turned an invention into cash. Platt paid for the right to sell the loom outside Japan, China and the United States.
• A contract is not a payment. Platt agreed to £100,000 and paid £83,500.
• Founding stories get simpler over time. The neat version says the loom money paid for the cars. The detailed record is less certain.

Toyota’s founder studied the man who made cars cheap. Henry Ford’s first company failed before he got it right. Another Japanese giant in this archive, Nintendo, also started with a product that had nothing to do with what made it famous.