SUMMARY OF MEMO FOR RECORD : (SCAPIN - 1715)
22 May 1947
1. Authorization annually is given to the manufacture of motor trucks, small passenger vehicles of 1500 CC piston displacement or under and the assembly of (50) large-sized passenger vehicles from parts in stock. This does not give approval for priority for raw materials, equipment or facilities to be used in the manufacture of small-sized passenger cars. Private use of these small vehicles is prohibited. A monthly report on the distribution by region and type of user will be submitted to this headquarters. Sale for official use and distribution can be made only to the following organizations or individuals: Hospitals, doctors, police, government agencies, public organizations, business firms and taxicab companies. Sale of the fifty (50) large-sized passenger cars authorized only to Boeki Cho for use as taxicabs for the transportation of representatives of the Foreign Trade Mission.
2. Concurrences: G-4 (Col. Ebel)
Transportation (Mr. Reifsnider)
Raw Materials (Mr. Overton)
Price Control and Rationing (Mr. Boner)
3. This problem as it relates to Korea has been considered.
4. This is considered an administrative matter.
J. Z. R.
MEMO FOR RECORD : (SCAPIN - 1715)
22 May 1947
1. References are the following Central Liaison Office memoranda and letter:
a. File number AG 091. 3 (25 Sept 45) ESS (SCAPIN-58) subject: Operation of Manufacturing Industries, paragraph 8, authorization is given to the manufacture of the motor trucks as described in paragraph 7, but not to the manufacture of passenger vehicles.
b. File number AG 004 (12 Apr 46) ESS/IN (SCAPIN-977A) subject: Manufacture of Passenger Cars.
c. C. L. O. letter No. 666 (ECI) dated 4 February 1947, subject: Application for Permission to Manufacture Small-Sized Passenger Cars and inclosure letter application of the Ministry of Commerce and Industry L. O. No. 6 dated January 23, 1947, same subject.
d. Memorandum C. L. O. M. Number 14, undated, received at this Headquarters 23 September 1945.
2. Paragraph 8 of SCAPIN-58 dated 25 Sept 45 subject, Operation of Manufacturing Industries, is changed to read as follows:
"8. Authorization is given to manufacture motor trucks, (300) small passenger vehicles annually of 1500 C. C. piston displacement or under and for the assembly of fifty (50) large-sized passenger vehicles. "
3. Paragraph 4 of reference 1b above is changed to read as follows:
"4. Except for the assembly of fifty (50) large-sized passenger cars, the manufacture of passenger cars with piston displacement of greater than 1500 is denied. "
4. No raw materials presently allocated for small truck manufacture are to be used for passenger car manufacture. Moreover this memorandum shall not be construed as approval for priority for raw materials, equipment or facilities to be used in the manufacture of small-sized passenger cars.
5. Private use of these small vehicles is prohibited. Sale of the fifty (50) large-sized passenger cars authorized only to Boeki Cho for use as taxicabs for the transportation of representatives of the Foreign Trade Mission. A monthly report on the distribution by region and type of user will be submitted to this headquarters. Sale for official use and distribution can be made only to the following organizations or individuals: Hospitals, doctors, police, government agencies, public organizations, business firms, and taxicab companies.
6. a. Immediately after the armistice the Japanese Government being anxious to see passenger cars produced submitted an application to this headquarters for permission to manufacture 100 passenger cars per month. Because of the shortage of buses and in order to channel all possible materials and damaged facilities for the maximum production of trucks so as to relieve the critical situation in the transportation of essential goods, this application was denied in a memorandum dated September 25 1945.
b. Several months later on 28 January 1946, the Nissan Industrial Corporation and the Toyota Automobile Company jointly applied for permission to assemble a total of 200 passenger cars. This application was denied on 12 April 1946. Reason given was that these two companies planned to use the truck engines in the passenger car assembly. At that time investigation showed that such action would adversely affect truck production which was critically low at a time when an acute shortage existed in all forms of service transportation vehicles. Therefore, in view of this situation, such production could not have been justified.
c. However since that time many new Japanese trucks have been manufactured; truck transportation capacity has been increased considerably by the recent release of about 17 000 surplus U. S. Army trucks and trailers to the Japanese Government and facilities has contributed to the increased supply of all transportation vehicles. Table #1 attached herewith gives the monthly production of automotive vehicles during the period January 1946 through February 1947. This table shows the overall output increase in all types of vehicles and clearly shows the rapid increase of small type truck production from only three in March 1946, when production was resumed, to 165 units in December 1946.
d. Since the large standard sized passenger cars in Japan use the same engines and parts that go into standard sized trucks, production of this type of passenger car should continue to be prohibited as long as the critical shortage of large trucks exists in Japan; however, investigation shows that the manufacture of small type cars would not interfere with the production of standard type trucks, as the small type car is manufactured in separate plants and does not require the same facilities nor the same type of machined material. As the piston displacement of the small sized automobile is only 1500 C.C., the amount of material required to produce this type of vehicle is only 1/4 the amount necessary to build the standard size chassis, so that it is possible to manufacture a reasonable amount of these small sized passenger cars without materially affecting standard truck production. Table #2 shows the detailed specifications of the Toyota, Datsun and Ota type of small passenger car manufactured respectively by Toyota, Nissan and Kosoku Kikan.
e. Present companies contemplating the manufacture of these cars are the Nissan Industrial Corp. Yoshiwara plant, Toyota Motor Co., and the Kosoku Kikan K. K. Before these cars can come on the market about two to three months will be required for machine set up, tooling, designing and testing. Attached table #3 shows the Estimated Annual Production Schedule of Passenger Cars for the period April 1947 through March 1948 as submitted by Japanese sources.
f. Attached table #4 shows the production capacity of Toyota, Nissan and Kosoku Kikan respectively giving:
(1) The present average monthly output of standard size trucks, replacement parts, small cars and small trucks.
(2) The present monthly capacity in each group.
(3) The future monthly capacity in each group. Present total capacity for the manufacture of small passenger cars is only 250 units monthly; however it is doubtful if over 50 units per month will be produced this year.
g. Attached table #5 shows the main raw material requirement for each make of car respectively. Indications are that production this year will not exceed 500 units. Raw material requirements on this basis would be as follows:
Steel Material 400 M. ton
Pig iron 105 M. ton
Alloy and special carbon steel 125 M. ton
Steel products 10 M. ton
Copper 12. 5 M. ton
Lead 10 M. ton
Zinc 5 M. ton
Tin 3 M. ton
Aluminum 3. 5 M. ton
h. Attached table #6 shows the total number of machines in each plant and number that is to be used in the manufacture of passenger cars.
i. Attached table #7 shows the number of employees in each of the respective plants and the number needed in this production. This manufacture would require the time of about 35 percent of the workers.
7. a. The passenger car situation in Japan has been steadily deteriorating. In 1936, 40, 000 passenger cars were registered while by June 1946 only 11, 188 such cars were in running condition.
8. Concurrences: G-4 - Col. Ebel
Transportation - Mr. Scarr
Raw Materials - Mr. Overton
Price Control and Rationing - Mr. Boner
PHW Section - Lt. Col. Mac
9. This problem as it relates to Korea has been considered.
10. This is considered an administrative matter.
11. Further questions may be directed to Mr. Wesley Melyan ESS/IN Manufacturing, Telephone Number 26-8136.
J. Z. R.