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The Korean War, which started in June of 1950, created a severe
nickel shortage. This shortage heavily impacted on SANYO as nickel was indispensable
for the production of dynamo-powered bicycle lamps. Toshio, after overcoming that
obstacle, decided to manufacture radios to avoid similar problems that could arise
from total dependance on one product.
In those days, Japanese statistics recorded the production volume for radios at
410,000 per year. In reality, however, this figure accounted for only 40% of all
radios on the market. The remaining 60% were assembled and sold on the black market.
Due to a high commodity tax of 30%, black market radios sold much better than
the expensive brand names. In response to such circumstances, Toshio directed
his employees to develop a reasonably-priced, high-performance radio and lobbied
for tax cuts.
Brand name radios sold for about 15,000 yen which was unaffordable for most people.
To compete with both brand name and black market products, SANYO – a late starter
in the industry – had to design a radio of superior quality that could be sold
at a price less than 10,000 yen. His employees came up with a production plan
to manufacture 100,000 units a year. They figured that mass production was the
only way to keep costs down. This was quite a bold approach as manufactures at
that time would produce only three to five thousand units for one model. On approval
from Toshio, the plan went ahead. |
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