KEIO TEITO ELECTRIC RAILWAY COMPANY History

Company History:

Keio Teito Electric Railway Company (KTR) is one of the eight private railway operators in the Kanto region of Japan, which encompasses the cities of Tokyo, Kawasaki, and Chiba, with a population of almost 40 million. KTR operates the Inokashira and Keio Lines from the center to the densely populated western suburbs of Tokyo. The company also operates 650 buses on routes around Tokyo. Like the other big private railway groups, KTR has taken advantage of Japan's postwar economic boom and has diversified into such areas as real estate development and the hotel business.

Keio Teito Electric Railway was formed in 1948 when the huge Tokyu Railway group was split up on the orders of the General Headquarters of the Allied Powers. The history of the actual railway lines concerned can, however, be traced back to two companies--Keio Electric Railway and Teito Electric Railway. Keio was founded first in 1906 under a different name, Musashi Electric Railway. The government at the time was encouraging the formation and construction of railway companies, and had designated and developed certain areas of the city as future railway stations. It then invited interested companies to apply for permission to build and operate electric railways in the city. Musashi Electric Railway applied to operate in several areas around Tokyo but received permission to run an 18-kilometer stretch between the western Tokyo districts of Chofu and Tama and central Tokyo. Due to confusion with a similarly named railway company, Musashi Electric Railway changed its name to Keio Electric Railway. Like the other railway operators at the time, Keio produced its own electricity to power the trains. Thus, before commencement of the tracks began in earnest, a 55-kilowatt thermal generating station was completed in 1910. Construction was then begun on a 12-kilometer stretch of track between Chofu and central Tokyo. In addition, an electric power company was formed to sell any excess capacity, and became a major supplier to the area. In 1913 a passenger service began on the line and following successive extensions to it during the following five years the line extended 15 kilometers between Chofu and Shinjuku. Branches were also added at the Chofu end to reach the rapidly growing residential population in the area. By 1923 the company operated 22 kilometers of track, with a further 16 kilometers planned. The Great Kanto Earthquake of 1923 put a temporary halt to these plans and the company's equipment sustained major damage. At the request of the government, Keio Electric Railway donated its power generating facilities, by now 150 kilowatts, to the relief and rebuilding effort.

The company, and Tokyo in general, recovered relatively quickly from the disaster. In 1924 all Keio's lines were reopened, with the delayed Gyakunan Railway line opening between Fuchu and Hachioji in western Tokyo. The next ten years brought rapid expansion for the company. Headquarters were moved to central Tokyo and in 1932 a new company, Takao Railway Company, was formed. This year also saw diversification with the operation of the "Blue Bus" service. Under the company's policy of aggressive expansion through takeovers, three bus companies, Fujisawa, Nakano, and Musashi, became part of the group and helped make Keio a major transportation force in the region. In 1942 the company joined forces with the Tokyu Railway Company, which had previously swallowed up the Odakyu, Keihin, and Teito companies to create a giant private railway conglomerate.

Teito Electric Railway, as part of the Tokyu group, was operating a railway line in close proximity to Keio Electric Railway and the combination of the two was an obvious choice in the dismantling of Tokyu after World War II. Teito was founded in 1927 when a railway entrepreneur, Ippei Ohta, obtained government permission to operate a railway in central Tokyo. With start-up capital of ¥3.4 million he founded the Tokyo Yamate Express Railway, which became Teito Electric Railway in 1933. In 1928 the Inokashira line between Shibuya and Inokashira Park opened to the public, and in the following year bus routes were added. In 1940 Teito Electric Railway was bought up and merged with the Tokyu group.

Following the dismantling of the Tokyu group, Keio Teito Electric Railway was left with the Keio lines, the Inokashira line, and three bus regions. An initial ¥50 million was injected into the new company, whose first president was Shiro Sannomiya. He began by recovering some of the bus routes lost after the dismantling, and also by acquiring new ones. In the second year of business, in an economically devastated Japan, KTR started a taxi firm and introduced the first Shinjuku-Chofu express on the Keio line. Like the other remaining private railway companies, KTR realized that the key to rapid growth did not lie in the relatively mature electric railway market but in diversification into related businesses that would make use of the company's real estate resources. In the next five years KTR entered the cinema, tourist, construction supply, and leisure industries. The main business, however, remained the electric railways, and in the early postwar years KTR stressed the modernization of the network. The journey between Hachioji and Shinjuku was cut down to 53 minutes and the company's own railway car manufacturer produced the first all-stainless steel so-called 3000 series cars for the Inokashira line. KTR also emphasized the expansion of the bus network, with sightseeing tours to other parts of Japan being offered and the facilities at Shinjuku station being improved. In 1959 KTR started two new ventures: Keio Shokuhin, which was involved in the food distribution and retail business, and Sakuragaoka Golf, which developed golf courses in the area. In the following year, Keio Construction and Keio Department Store were founded. The same year saw reorganization within the railway group, with the railway operations department becoming simply one of many business departments within the company structure. This reflected the growing diversification of the group. A logistics division was formed to coordinate the technical aspects of the rail operations, which were becoming more and more automated. In 1960 the Keio line began the running of one-driver trains for the first time.

The areas around the Keio line--Hachioji, Chofu, and Hashimoto--were becoming very densely populated with residents who used the line daily to commute to work in the Tokyo business districts of Shinjuku and Marunouchi. The Keio line gained a reputation as one of the most crowded lines in Tokyo during rush hour. KTR responded to this problem by increasing the number of cars on each train, improving the speed and frequency of the express services to Shinjuku, and introducing the new 20-meter-long 6000 series cars in 1972. To combat the sweltering heat of midsummer Tokyo, air conditioning was installed in all of KTR's trains on the Inokashira line by 1969. Air conditioning is now considered to be essential on all Japanese trains.

In 1969 Koshiro Kobayashi became president of KTR and the group entered the hotel business with the formation of the Keio Plaza Hotel Company. Subsequently the first luxury Keio Plaza Hotel was opened in Tokyo in Shinjuku, and regional hotels were opened in Takamatsu and Sapporo. Aside from the railway and bus concerns, the hotel business is the largest source of revenue within the KTR group of companies. KTR was one of the first Japanese companies to introduce a five-day work week for all employees from 1972, the year of Keio's 60th and Inokashira's 40th anniversaries as railway lines. By 1974 all stations within the group had automatic ticket machines, and the Keio line was extended south to Sagamihara. The company also spent money on the bus operations, with new routes added and modern air-conditioned buses put into service. Like the trains, the buses could be operated completely by the driver, cutting down on labor costs.

The first Keio restaurants were opened in KTR's many station premises. The company's management regarded these stations as lucrative development sites, and constructed shopping complexes and hotels in Shinjuku and Tama to take advantage of the spending power of the thousands of commuters passing through the stations daily. Shinjuku by then had become one of the busiest stations in the world. The length of the trains on the Keio line had risen to ten cars and the trains traveled at speeds of up to 105 kilometers per hour, reaching Shinjuku from Hachioji in 35 minutes. The year 1978 saw the 30th anniversary of KTR as a company and the continued expansion of the bus network, which now extended throughout the whole of western Tokyo as well as in Japan's provinces. A computerized tracking system was introduced to improve efficiency. KTR's safety record was excellent, and at its many railroad crossings there was not a single accident in 1980. To cope with increased demand for railway cars, the group's railway car manufacturing facilities were expanded. In 1986 the construction of KTR's stations continued with the development of an underground complex around Hachioji station, the terminus of the Keio line. Between 1979 and 1989, sales of the KTR group of companies approximately doubled to ¥510 billion, and to cope with this expansion the headquarters moved from crowded and expensive Shinjuku to Sakuragaoka, a Keio line station midway between Shinjuku and Hachioji. Along with the new headquarters building, an extensive shopping complex was constructed.

The late 1980s saw an economic boom in Japan, with consumer spending soaring and stock and real estate prices reaching dizzying heights. This meant big profits for all the large private railway companies, many of which possessed sites in the most expensive areas of central Tokyo. Increases in KTR's overall profits have been due to real estate leasing and effective fund management. In the early 1990s transportation accounted for only 26% of the group's revenues, with property 7%, leisure and services 25 %, and the remaining 42% being made up by the retail operations of its department stores and restaurants. Unlike its rival railway groups Tokyu and Seibu, KTR did not seem intent on expansion overseas. Investment plans largely centered on the core areas of transport, retail, and hotels. On the Sagamihara branch of the Keio line, a major extension project was underway, as was the construction of two Keio Plaza Hotels in Tama and Hachioji. Responding to the rapid increase in the elderly population of Japan, KTR formed the Keio Senior Club, offering the group's services at a discount to the over-60s market. KTR was a fairly mature, well-run company that looked set for slow but steady growth in the 1990s.

Principal Subsidiaries: Keio Agency K.K.; Nishi Tokyo Bus K.K.; Keio Automobile K.K.; Keio Stores K.K.; Keio Department Stores K.K.; Elite K.K.; Keio Atman K.K.; Keio Plaza Hotels K.K.; South Shinjuku Parking K.K.; Restaurant Keio K.K.; Keio Travel Agency K.K.; Keio Recreation K.K.; Keio Construction K.K.; Keio Service K.K.; Keio Diesel Industry K.K.; Keio Plaza Hotel K.K.

Further Reading:

Livingstone, J., J. Moore, F. Oldfather, Postwar Japan: 1945 to Present, London, Random House, 1973.

Source: International Directory of Company Histories, Vol. 5. St. James Press, 1992.

Directory of Sample Business Plans Directory of Company Histories Contact Us Advertise