Chapter4 Development 1969~1984 Second Challenge as Corporation with Respectable Technology

Preparation for reconstruction Preparation for reconstruction

Tohatsu Headquarters relocated, outboard industry formed

It was a decade of high economic growth that began in 1965 in Japan. The entire Japanese industry, led especially by electronics manufacturers such as SONY, introduced a number of products into the U.S. and Europe with cheaper prices but high quality, and the market was filled with “Made in Japan”.

It was a part of the reorganization plan at that time that Tohatsu move its Tokyo Plant to Azusawa, Itabashi, where current headquarters are located.

As sales of motorcycles had stagnated, outboard motors had alternatively played a significant role until the reorganization plan was applied.

A group of companies in the marine industry had joined to hold a boat show in 1962, and it formed the Japan Boating Industry Association in 1970.

Fujikake, the Tohatsu’s reorganization trustee, became one of the founders of the association and was later appointed a permanent council member.

Meanwhile, delightful news had arrived from U.S. in 1969; Tohatsu had received a mass order of snowmobiles from Rupp Corp. U.S..

Bulk order by Rupp Corp., Tohatsu delivered engines for snowmobiles

It was a business negotiation of great magnitude that Tohatsu had with Rupp Corp. U.S. while still undergoing reconstruction. Then, with Mitsui & Co., Ltd., one of the biggest trading companies in Japan, Tohatsu had conducted a sales campaign by exhibiting its engines in snowmobile shows across U.S.. That campaign had tied Tohatsu to Rupp Corp. and an order agreement was signed for more than 200 thousand snowmobiles.

Tohatsu emphasized successive developments of outboards.

Tohatsu emphasized successive development of outboards


Although severe and continuous competition in the outboard industry had tired out every manufacturers, Tohatsu was quite affirmative in the development and launching of new products into the market. B13A(8-horsepower), for instance, had become Tohatsu’s longest seller of 15 years, from 1970 up until 1986. In 1971, B10A2 with 6-horsepower and B30A with 18-horsepower were launched.

As the restriction which partially limited the importation of foreign outboard motors until then had been removed, competition in the entire outboard industry had become more aggressive. Additionally, even excellent Japanese agricultural manufacturers joined in the outboard market. They would pull out from the market later on, but they were still threatening competitors for Tohatsu under reorganization.

New Products exploited

Tohatsu also pioneered a new market. “Cold Jet”, a refrigeration unit for transportation, for instance, had been incorporated into motor vehicles and carried fresh foods safely and delivered them to people in many places. This electric cooling system, with its environmental friendliness and quiet performance, was expected to be one of Tohatsu’s main products, along with outboards and fire fighting pumps, and it has continued to be manufactured to this day.

Recovery completed

1971 was the year that Tohatsu was judged by the Court to be able to cease the recovery plan under the Stock Company Reorganization and Rehabilitation Act. By that time, Tohatsu workers had been “ through the wringer” for 5 years and 7 months.

The experiences of that difficult time, however, brought meaningful lessons for future management. Fujikake, the trustee, had become president after the plan was completed.

Developing technology with keen eyes Developing technology with keen eyes

Renamed “Tohatsu”

It was in 1972 that a Winter Olympics was held for the first time in Japan. People were excited by the Japanese ski jumping team, which made a clean sweep of the first three places. On the other hand, in the industrial arena the “Textile War ” between Japan and U.S. underway since the mid-1960s, concluded with Japan conceding. This led a huge negative influence on Japanese industry. The Japanese textile industries had played a significant role in post-war time, providing thousands of jobs, including wholesalers, dealers and retailers. The concession Japan made later led to another Japan-U.S. friction in the car and semiconductor industries. This saw the entire Japanese industry began to put a great emphasis on the miniaturization of its products. In June 1972, after its recovery, Tokyo Hatsudoki was renamed to Tohatsu Corporation, and its workers took a new step with a new name.

Development of portable fire pump

the V15A with 12-horsepower and weighing 30kgthe V15A with 12-horsepower and weighing 30kg

In 1973, the Japanese government began to focus seriously on plans for the prevention of natural disasters such as earthquakes. In Tokyo, local community fire-fighting volunteer teams were organized in many places. Under this nation-wide campaign the Department of Fire Defense requested manufacturers to develop micro-mini portable fire pump, weighing less than 30 kg, which could be carried even by a woman or a child.

Tohatsu responded positively to that request, and designed and completed a portable fire pump. In 1973, approved by the Japan Fire Equipment Inspection Institute, the V15A with 12-horsepower and weighing 30kg was released. It has been praised for its light weight and excellent performance by end users up to this day.

Development of refrigerating systems for trucks

(L)New Cold Jet CJ850 (R)production of Cold Jet for 2-ton class trucks(L)New Cold Jet CJ850
(R)production of Cold Jet for 2-ton class trucks

In 1970, “New Cold Jet CJ850”, the upgraded model of previous Cold Jet, was developed. During the day, this equipment was able to reserve cold air and keep storage space cold though the night. This stable storage cooling system was highly commended among users. In the same year, production of Cold Jet for 2-ton class trucks had started.

Production and Sales took off Production and Sales took off

Sales of exported outboards exceeded domestic sales

Since this time, the number of exported Tohatsu outboards has exceeded that of outboards sold in the domestic market.

In 1974, the Japan Boating Industry Association had researched to find that the exported units was double the number of the units sold the in domestic market. Since then, new models have been tended to be introduced in the bigger markets such as U.S. and Australia, before they are released into the Japanese market.

Taking the initiative in 500cc class outboards in the domestic market, Tohatsu launched M35A which was the first Outboard model that manufactured in Tokyo Plant. It was in 1977 that M35A was first introduced into the market and it soon defeated foreign outboard motors and won championships in boat races. From then it became one of Tohatsu’s greatest models, gaining an enviable reputation in domestic and foreign market.

In the following two years, new 25-horsepower, 12 to 18-horsepower, 9.9-horsepower, and 55 to 70-horsepower were introduced.

These successive releases brought a 27.5% sales increase and an 11.8% profit increase respectively, and a dividend of 10% was paid to shareholders. The capital was increased to five hundred million yen in 1978.

Renovation of Tokyo Plant

Tokyo PlantTokyo Plant

As described, Tohatsu had expanded its operations around the world. It became necessary to have a total overhaul of the production system. Additionally, full modernization of old Tokyo Plant was needed for a larger and more efficient manufacturing capability. To meet these criteria, in November 1978, the most advanced and effective plant to date was completed.

In that year, an amendment to laws which required an emergency power unit in specific, designated buildings had brought a demand for automatic fire-fighting equipment and Tohatsu Fire Fighting Department had a 59% sales increase.

Marketing-oriented management paid off Marketing-oriented management paid off

Sales activities on demand

People are attracted to Tohatsu’s excellent technology. Needless to say, however, even when a product is manufactured by an excellent technology, it always has been individual end-users who recognize its value.

Outboard motors and fire-fighting pumps were sold to the Metropolitan Police Department, The National Police Agency, The Ministry of Justice, The Tokyo Fire Department, The Japan Coast Guard, and to local governments.

In 1974, there was a conflagration in a shipping mall and 103 lives were lost in the fire. What people discussed after the disaster was fire risk management in shopping malls and other public places. This led to a discussion about the need for quick deployment in extinguishing fires and rescue operations to protect lives from fires in large buildings. These incidents gave Tohatsu opportunities to create public awareness of fire-related products.

Utilize property for firm management operation

In 1984, Isao Matsumoto was inaugurated as president of Tohatsu. The executive team started real-estate leasing operations of the land and buildings owned by Tohatsu, in addition to the two main activities of manufacturing outboard motors and fire pumps.

Tohatsu possessed acres of land with factories and warehouses in Itabashi/Shimura area (currently Azusawa), but some of them had left unused.

(L)Shimurasakaue (R)Shimurasakashita(L)Shimurasakaue (R)Shimurasakashita

In 1984, a warehouse for rent was built in the vacant space where the motorcycle production line had previously been located.

Since then, office buildings have been constructed on those areas and real estate and rentals have become Tohatsu’s main businesses along with outboards and fire fighting pumps.

During that time, there was a serious trade dispute between Japan and U.S. due to the increasing expors of Japanese brands, and raised yen rate was about to lead Japan to bubbling economy. People had speculatively repeatedly bought and sold land in the market. Tohatsu’s real estate business, however, was not one of those speculative kinds but was for the purpose of using assets efficiently.

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