A sun gear 6 is concentrically, rotatably disposed inside an internal gear 4. Plural planet gears 8, carried by a planetary carrier 10, are disposed between and in meshing engagement with the internal gear 4 and the sun gear 6. The planetary carrier 10 is connected to a shaft extending from an engine while the internal gear 4 and the sun gear 6 are connected to output shafts. The internal gear 4 is molded by a plastic working, followed by a thermal treatment including soft-nitriding, a nitriding and a carburizing hardening step. The inner surface of the internal gear 4 is formed with internal gear teeth 4b, except for an axial portion 4d, while a spline groove 4a is formed on the outer surface of the internal gear 4 at a location corresponding to the portion 4d where no internal teeth 4b are formed for engagement with a spline 2a on a housing 2. The internal gear 4 is reduced in size while improving the mechanical strength thereof.