The company was established in 1898 in Nagoya as Aichi Tokei Denki Seizo Co., Ltd. (Aichi Watch and Electric Manufacturing Company). Aircraft production started in 1920, and the company relied initially on technical assistance from Heinkel, which influenced some of their designs. Later, with the prodding and support of the Imperial Japanese Navy, the company started making seaplanes using technology imported from Short Brothers in the UK.
During the inter-war period, Aichi was the beneficiary of technology transferred from Heinkel, Germany. At the time, a team from the League of Nations occasionally visited German aircraft manufacturers to monitor the ban on military aircraft research and production. A Japanese military attache who was a member of the monitoring team, let Heinkel know, confidentially and in advance, of the planned visits. Heinkel thus succeeded in continuing its design on the aircraft ordered by Aichi Aircraft without being spotted.
In 1943 the aircraft division was spun off as Aichi Kokuki Co., Ltd. (Aichi Aircraft Company). After the war, the company was dissolved. Its current descendant, Aichi Machine Industry Co., Ltd., manufactures automotive parts and light trucks for Nissan.