100 Years of Service

Building on a century of success in Hawaii, including a 61-year partnership with Toyota, Servco looks ahead as a testing ground for the future of mobility

September 24, 2019
Hawaiian Beachead -- Here's a bird's eye view of the first Toyota dealership to set up shop on the islands in 1958.

When Peter Fukunaga purchased a two-car auto garage on the North Shore of Oahu in 1919, he knew serving his customers would be the key to growing his fledging enterprise. So when he looked to expand his business, he did so under the name Service Motor Company — the winning entry submitted by an Army Air Corps sergeant in a contest Fukunaga ran in a local newspaper.

One hundred years later, that core value of service continues to guide what is now known as Servco Pacific Inc., or more simply Servco. That includes the past 61 years as the exclusive distributor of Toyota vehicles in Hawaii.

A customer-centered approach to business is a big advantage at a time when the auto industry is undergoing a fundamental shift from selling vehicles to providing mobility solutions. But, truth be told, it’s largely because of this commitment that Servco has grown into a diversified business that employs more than 2,000 team members in Hawaii, California and Australia.

Humble Beginnings -- Servco got its start when founder Peter Fukunaga bought this two-car garage on the North Shore of Oahu in 1919.

From Horses to Cars

This is a success story with a very humble beginning. Fukunaga emigrated from Japan to Hawaii as a 17-year-old with only three years of formal schooling and little to no knowledge of English. He started working as a laborer in the sugar cane fields of the Island of Hawaii, but later found himself in the hospital with two broken legs after falling off a horse.

During his recuperation, it occurred to him that cars — not horses — were the future. So, when he was able, he depleted his $25 in savings to secure a $1,600 loan, used crutches to board a train bound for the North Shore and purchased that garage. Seven years later, the company obtained its first Chevrolet franchise from General Motors, which today is the oldest continuously operating Chevrolet dealership West of the Rockies.

During World War II, Fukunaga coped with declining auto sales and supply shortages, selling whatever he could to keep the business afloat.

In the post-war boom, he put the Japanese (and Toyota) concept of genchi genbutsu into practice and went to Japan to conduct some hands-on research on the country’s top two automakers: Toyota and Datsun (now Nissan). Japanese taxi drivers convinced him Toyota was the better make, with a more reliable clutch.

In March 1958 (just a month after it established Toyota Motor Sales, USA, in Hollywood, California), Toyota Motor Corporation granted Servco an exclusive import and distribution agreement for Hawaii. As on the mainland, the islands’ first Toyota vehicles were the Toyopet and Crown. Neither proved well-suited to American roads, vibrating badly at speeds over 60 mph and overheating on long uphill climbs — especially when traversing Oahu’s Pali Highway through the Koolau mountain range.

“In one particularly bad year, we only sold two Toyopet vehicles, and one was to my mother,” says Mark Fukunaga, Servco’s current chairman and CEO.

It wasn’t until a few years later with the arrival of the Corona, designed specifically for the American market, that Toyota’s fortunes began to rise. Servco played a role in their mutual success, helping to test prototype vehicles and provide feedback to Japan. Through the years, Servco would contribute in other ways to product development, including corrosion tests in Hawaii’s salty air.
Community Outreach -- In 2015, Servco celebrated the sale of its 500,000th vehicle by making generous donations to several local charities.

Dominating the Market

In 1961, Servco sold just one Toyota vehicle. In 2015, it celebrated the sale of its 500,000th. Today it holds a market share in excess of 30 percent in Hawaii.

Its best-seller, by far? Tacoma, which is the best-selling vehicle of any kind by a wide margin (followed by 4Runner).

“Local owners here use it as their outdoor truck but also as a family car,” says Rick Ching, president and COO. “Its smaller size, compared with the Tundra, makes it a great vehicle for our roads and parking spaces. The double cab is especially popular and often used to go surfing or go to the movies.”
Pilot Program -- Servco and Toyota Connected have been collaborating on a car share service called Hui, which means a "club" or "group" in the Hawaiian language.

Focus on the Future

As Servco moves into its next 100 years, the company continues to redefine itself to meet the mobility needs of their customers.

Over the past year, Servco has been collaborating with Toyota Connected to conduct the first pilot of the company’s Mobility Service Platform with its car share service called Hui (which means “club” or “group” in the Hawaiian language). The program launched with 20 stations and about 50 vehicles and has since grown to 40 stations and 100 vehicles.

“We’re on track to achieve close to 200 vehicles, expanding the service across Honolulu’s urban core,” says Mark Fukunaga. “And we’re also planning to implement Hui on the neighbor islands in the future. It’s been appealing to both tourists and residents. We’ve had people who try a Toyota through Hui, fall in love with it and end up buying one. And we’ve had people who’ve tried Hui and ended up selling their personal cars. This is just the start of how we’re re-envisioning mobility for Hawaii and beyond.”
Hydrogen Society -- Hawaii Gov. David Ige (second from left) fills up a fuel-cell-powered Mirai's tank at the grand opening of Hawaii's first publicly-accessible hydrogen station at Servco's Mapunappuna Plaza in 2018.

Last year, Servco established Hawaii’s first publicly accessible hydrogen fueling station. As a result, it became the second state after California to offer the fuel-cell-powered Mirai.

No matter which way the road ahead twists and turns going forward, rest assured Servco’s commitment to service will remain steadfast.

“That’s been our model for 100 years,” says Ching. “At Servco, we’re defined by service and motivated by gratitude. We need to be where our customers are, which we will continue to do into the next century.”

Want to learn even more about Servco’s history in Hawaii? Check out this multimedia timeline on the company’s website.

By Dan Miller

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