The History of Daihatsu: From Osaka Engines to Toyota's Kei Cars

Daihatsu key facts

Hatsudoki Seizo and the first three-wheelers

The company was founded in 1907 in Osaka by a group that included professors from the city's engineering school. Its first president was Kurokawa Iyokuma. The first product, finished in December 1907, was a 4.5 kW (6 hp) gas engine for small stationary power plants. A 15 kW (20 hp) engine followed in 1914, and the firm also worked on steam engines for Japan's state railways.

Vehicles came much later. In 1930 the company built its first motor vehicle, the Type HA, a petrol three-wheeled utility truck. Japan's small traders needed cheap, narrow trucks for crowded streets, and three-wheelers suited them well. In April 1937 the company built its first four-wheeled vehicle, a small van called the Type FA. The Ikeda Plant 1, still the oldest Daihatsu factory, opened in 1939.

The name Daihatsu arrived in 1951. It combines the first character of Osaka (大, read "dai") with the first character of hatsudōki seizō, "engine manufacture". In 1951 the company built 12,000 vehicles. Its first export followed in 1953.

Daihatsu timeline from 1907 to 2024

The Midget, the Compagno and the first exports

The Midget of 1957 was a small three-wheeler for shopkeepers and delivery work, and it stayed in production until 1972. It also travelled: in Trinidad and Tobago, Daihatsu has been present since 1958, when the Midget Mk I became a favourite of market traders. That same year the company began its four-wheeler range.

The Compagno of 1963 was Daihatsu's first real passenger-car family. It started as a van, and the Berlina saloon followed in February 1964. The "D" emblem first appeared on the Compagno in September 1963 and became the corporate logo in December 1969. In 1965 the Compagno Berlina went on sale in Britain, one of the first Japanese cars marketed there.

Output grew fast in those years. Daihatsu built 38,000 vehicles in 1958 and 170,000 in 1964. By 1970 the figure was 327,000. By our calculation, output grew more than 27 times between 1951 and 1970.

Kei cars and the Toyota partnership

In November 1967 Daihatsu signed a cooperation agreement with Toyota. The two companies kept separate brands, but Toyota became a shareholder and Daihatsu gained access to a far bigger organisation. For the parent company's own story, see the history of Toyota and the profile of its founder Kiichiro Toyoda.

The company's speciality became the kei car, Japan's smallest legal class with tax and parking advantages. Kei rules limit engines to 660 cc today and set maximum dimensions of 3,400 mm in length and 1,480 mm in width. Most of its models sold in Japan fit those rules. That makes a kei car about 1,000 mm shorter than a typical 4.4-metre family saloon. About 70 % of Daihatsu drivers in Japan are women, a share unusual for a car brand. To see how a 3.4-metre kei car compares with a normal family car, use the 1cars size comparison tool.

The Mira, sold abroad as the Cuore, arrived in 1980 and became one of the company's core models. Yearly output kept rising, from 446,000 vehicles in 1977 to 729,000 in 1985 and 834,000 in 1988.

Charade, Rocky and the export years

The Charade, launched in November 1977, made the brand known outside Japan. It was a compact hatchback, and a 993 cc turbocharged version was later developed. Off-road models followed: the Fourtrak, also known as the Rocky, in 1985, and the smaller Sportrak, called Feroza in many markets, in 1990. According to the old 1cars text, the Feroza was in especially high demand in Chile.

The company opened a European head office in Brussels in 1979, and imports to Europe began the same year. It also began building cars in Indonesia in 1979. In the United States, sales of the Charade, the Rocky and the Hijet microvan ran from 1987 to 1992.

The 1990s brought the Terios, a compact four-wheel-drive SUV launched in 1997, and the Sirion supermini. The Copen, a tiny roadster with a folding metal roof, reached Europe in 2004. On 1cars you can read about the second-generation Daihatsu Terios.

Landmark Daihatsu models

Toyota control and the retreat from Western markets

Toyota raised its stake from 16.8 % to 33.4 % in 1995 and to 51.2 % in 1998, which brought the company into the Toyota Group. In August 2016 Toyota bought the rest, and the Osaka firm became a wholly owned subsidiary. Within the group, it became the specialist for small cars for emerging markets. In January 2017 the two companies set up the Emerging-market Compact Car Company.

The same years saw a long retreat from distant markets. After the Asian financial crisis, the company left Thailand in March 1998. It ended operations in Australia in March 2006 after almost 40 years there. In January 2011 it announced its exit from Europe, where registrations had fallen from 57,700 in 2008 to 19,300 in 2010. New-car sales in Europe ended on 31 January 2013, and South Africa followed in April 2015.

By our calculation, European registrations fell by about two-thirds in two years. Each car sold in Europe also carried the cost of shipping from Japan, so a small range of kei-based models could not support a dealer network.

Astra Daihatsu, Perodua and Asian growth

As Europe faded, South-East Asia grew. Astra Daihatsu Motor, founded in Indonesia in 1992, is 61.75 % owned by Daihatsu, and Daihatsu is the second best-selling brand in that country. In Malaysia, the company holds 25 % of Perodua, which sells Daihatsu designs under its own badge, such as the Axia, Myvi and Ativa. Perodua and Toyota also sell Daihatsu-built vehicles as their own models in several markets.

The old 1cars text noted that Daihatsu supplied engines and gearboxes to Perodua. It also recorded that Daihatsu kept selling light commercial vehicles such as the Gran Max and Delta. Those trucks and vans remain a core part of the business in Asia.

The 2023 safety-test scandal

In April 2023 Daihatsu admitted that it had rigged side-impact tests for about 88,000 cars. A wider investigation found much more. Some test cars had door trims cut in a way that production cars did not have, some had different airbag control units, and some results were falsified. The misconduct dated back to 1989 and became more common after 2014.

In December 2023 Daihatsu halted shipments of 64 models, and all four Japanese plants were shut. Cars sold in Japan, Indonesia, Malaysia, Thailand and Mexico were affected. Production resumed between February and April 2024, and by May 2024 all Japanese plants were running again. Masahiro Inoue became president in 2024.

Daihatsu models on sale today

In November 2021 the company introduced its first mass-produced full hybrid, called e-Smart Hybrid, in the Rocky. Most models now use the DNGA platform, the company's own small-car architecture. All Daihatsu models in the catalogue are listed on the Daihatsu brand page, and more small cars from the country are on the Japanese cars page.

Our verdict for buyers today

The brand makes sense for buyers who want a very small, cheap-to-run car or light commercial vehicle. Before buying, the 1cars car finder helps narrow down small models by size and budget, and the comparison tool sets two of them side by side. A used Terios, Sirion or Cuore can still be a sound buy in Europe, but parts supply is thinner since 2013. Check that recall work has been done on any model affected by the 2023 investigation. In Asia, the brand and its Perodua and Toyota twins remain an everyday choice.