After World War I, many European countries attempted to mechanize their cavalry. In parallel, Japanese cavalry also experimented with a variety of armored cars with limited success. These wheeled armored cars were not suitable for most operations in Manchuria, due to the poor road conditions and severe winter climate. Japan's army (like the US, French, British and Russian armies) tried various methods to integrate modern armor into their traditional horse cavalry formations.
From the early 1920s, the Imperial Japanese Army Cavalry School based in Chiba prefecture tested a variety of European light tanks, including six Carden Loyd tankettes and several Renault FTs, and a decision was reached in 1929 to proceed with the domestic development of a new vehicle, based largely on the Carden Loyd design and intended to address the deficiencies of wheeled armored cars.
The development of the Type 92 began with a hybrid amphibious car; this had both tracks and wheels and was able to drive in forward and reverse, both in the water and on land. The experiment was not entirely successful, and the Japanese cavalry was not impressed with the performance. After this, the amphibious car concept was abandoned, and the design was changed to a tracked vehicle for land use only.
Production was initiated by Ishikawajima Motorcar Manufacturing Company in 1932. Production was plagued by technical problems and in total only 167 units were built between 1932 and 1939. After some initial problems with the running gear, the Type 92 proved well suited for the rough terrain and poor roads of Manchuria and China, and was able to attain a speed of 40 km/h (25 mph). Some vehicles were equipped with two searchlights for night operations and Type 94 Mk 4 Otsu radios (this 1934 model had a range of 0.6 mile and weighed 88 lb; it used a 23 ft (7.0 m) long antenna of "reverse L" shape).
The Type 92 was eventually replaced by the Type 94 Te Ke during the Second Sino-Japanese War, although both British and American sources often confused the two models.