TTE was started in London in 1972 when Toyota representatives and Ove Andersson, who won the Monte Carlo Rally in 1971, decided that he should drive a Toyota Celica in the RAC Rally in the autumn of that year. Andersson came 9th, beating other Japanese top teams who mostly worked with the Datsun 240Z.
The Toyota Celica had to travel from Japan to the European events all the time, which was not good for the car, so Andersson set up a workshop of his own, Andersson Motorsport, which became Toyota's first European team. It was founded in 1973 with its workshop in Uppsala, Sweden. Shortly thereafter it moved to Brussels, Belgium. It ran Corollas and Celicas from this location, with some help from Japan for major events.
Toyota Team Europe began in February 1975. In August of that year, Hannu Mikkola won TTE's first rally, the 1000 Lakes Rally in a Corolla 1600, where the competition used 2.0 L engines.
In 1979 TTE moved 11 of the 20 employees from Brussels to Cologne, where the Toyota Allee was created. This was also the first time it used a Celica Turbo, and TTE won the next two Safaris.
In September 1987, TTE moved to a larger premises, in which they still reside. It was also the time they revealed their first four wheel drive car, the Toyota Celica GT-Four, driven by Juha Kankkunen and Kenneth Eriksson. Carlos Sainz won the 1990 FIA World Rally Championship Title for Drivers with ST165. The newer GT-Four, ST185, made its debut at the 1992 Rallye Monte Carlo, culminating in Sainz again winning the title in this year. The ST185 also won the WRC Driver's and Manufacturer's Titles in 1993 with Juha Kankkunen, and in 1994 with Didier Auriol.
In 1993 Toyota Motor Corporation bought TTE which then renamed Toyota Motorsport GmbH (TMG). At this time, as a fully owned part of Toyota Motor Corporation, Toyota Motorsport were employing 300 staff from 17 nations.
In 1995 TTE was famously banned for 12 months from the WRC for cheating by designing a illegal air restrictor on the ST205 that included both a bypass mechanism and spring-loaded devices to conceal it from scrutineers. In the 1996 and 1997, despite lack of works team appearance in 1996 due to the ban, TTE supported the Celica ST205 rallied by Italian HF Grifone Team, Toyota Team Sweden, Marlboro Toyota Team Belgium, and Tein Sport in the selected WRC events, before introduced the Corolla WRC in the 1997 Rally of Finland. When they returned to the WRC for 1998, they did so with a Corolla WRC driven by the crews of Carlos Sainz/Luis Moya and Didier Auriol/Denis Giraudet. They finished the season in second overall in both the Drivers' and Constructors' Championships.
In 1999, however, the manufacturers championship was taken, the third in TTE's existence.
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