In April 1936, Toyota's first passenger car, the Model AA, was completed.
An all steel body was introduced in the Model AA along with an engine mounted on the front axle to ensure larger interior space. The design of the front section was changed from the Model A1, and the price was set at 3,350 yen when delivered within Nagoya, which was approximately 400 yen lower than Ford and GM at the time. The production of the Model AA began at Kariya Prototype Factory and was transferred to Kariya Assembly Plant and then to the Komoro Plant. By December 1942, 1,404 Model AA passenger cars were produced.