The company was founded in 1907 as Hatsudoki Seizo Co., Ltd., a venture influenced by Osaka University’s Engineering Department to develop gasoline-powered engines for stationary power plants. For its first two decades, the company focused on steam engines and rail carriages for Japanese National Railways, later expanding into railroad diesel engines in partnership with Niigata Engineering and Shinko Engineering. Its primary competitor during this era was Yanmar.
The name "Daihatsu" was adopted during a major restructuring on March 1, 1951. It is a portmanteau combining the first kanji of Ōsaka (大, read as dai) and the first kanji of the Japanese phrase for "engine manufacture" (hatsudōki).
Daihatsu’s shift toward automobile production was spurred by the presence of Ford and General Motors in Japan during the 1920s and 1930s. In 1930, the company proposed a prototype three-wheeler truck, a format that would become a hallmark of its early automotive years. By 1963, the company introduced the Compagno, a versatile platform supporting multiple body styles and the first vehicle to feature the brand's signature "D" logo. In 1965, the Compagno Berlina became the first Japanese car marketed in the United Kingdom.
Daihatsu began cooperating with Toyota in 1967. Toyota initially acquired a 16.8% stake, which increased to 33.4% in 1995 and 51.2% in 1998. During this period, Daihatsu produced mini-vehicles and small cars under contract for Toyota while maintaining its own brand identity in markets like Indonesia and Malaysia. In Indonesia, Astra Daihatsu Motor is the nation's largest car producer by output. In Malaysia, the company operates through the Perodua brand, for which it provides significant R&D and manufacturing resources.
In the 1980s, Daihatsu attempted to expand into the United States, selling the Hijet, Rocky, and Charade between 1987 and 1992. However, the company withdrew after failing to align its compact, fuel-efficient products with American consumer preferences. A similar withdrawal occurred in Europe by 2013, driven by a strong yen that rendered exports unprofitable.
Daihatsu has maintained an electric vehicle development program since the 1970 Osaka World Expo, where it produced "pavilion cars." This led to the 1974 release of the Hallo, an electric tilting trike, and participation in the Japanese Electric Vehicle Association's PREET rental program. In 2021, the company launched the "e-Smart Hybrid" system, a series hybrid technology utilized in the A200 series Rocky.
In April 2023, Daihatsu was found to have rigged safety tests for 88,000 cars by modifying door trims in test vehicles to minimize injury risks—a modification not present in production models. Subsequent investigations in December 2023 revealed broader misconduct dating back to 1989, involving falsified airbag control units, speed tests, and headrest impact data. This resulted in a temporary halt of all domestic manufacturing through early 2024 and affected models sold under the Toyota, Mazda, and Subaru brands.
The company’s "D" logo, modernized in 1969 and revised in 2004, is intended to resemble the da character in katakana and a rocket shape. Domestically, the brand is represented by the mascot Kakukaku Shikajika, an anthropomorphic deer created by illustrator Chiharu Sakazaki in 2008.
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