http://afp.google.com/article/ALeqM5j9SwVpptSeOHFSz6ztk-NqUATiKAToyota considers entering aircraft industry: official
1 day ago
TOKYO (AFP) — Fast-growing Toyota Motor Corp., widely expected to become the world's top-selling automaker this year, said Wednesday it is considering branching out into the aircraft industry.
Toyota may put up funds for a company to be set up by Mitsubishi Heavy Industries Ltd. to design a next-generation, fuel-efficient passenger jet, Toyota spokeswoman Kayo Doi said.
"Mitsubishi Heavy has invited us to invest and we are considering it," she said, while adding that nothing has been decided yet.
The comment came after a report Wednesday in the Asahi Shimbun that Toyota plans to put up 10 billion yen (97 million dollars) into the venture to be set up in April.
The new company would be capitalised at about 100 billion yen, of which Mitsubishi Heavy plans to shoulder 60 percent, the daily said without identifying its sources.
If the plan goes ahead, Toyota would join Japan's second-ranked automaker, Honda Motor Co., in expanding its business interests into aviation. Toyota is widely seen as overtaking General Motors this year as the world's top-selling car company.
A Mitsubishi Heavy spokesman said the company "has been calling on various firms for cooperation in the domestic jet project" but declined to elaborate further.
Mitsubishi Heavy has been developing two types of a fuel-efficient passenger aircraft with some 70 or 90 seats under its Mitsubishi Regional Jet project, aiming to launch them in 2013.
The plane aims to improve fuel efficiency drastically by using light-weight carbon-fibre materials for 30 percent of its body, according to the company.
It would be Japan's first home-grown commercial aircraft since the YS-11 turboprop regional plane, which made its debut flight in 1962. Production ended in 1974.
Mitsubishi Heavy is to decide by the end of March whether to go ahead with the project based on expressions of interest.
All Nippon Airways, Japan's second largest airline, said in January it was considering the new jet but was also examining existing rival small aircraft built by Canada's Bombardier and Brazil's Embraer.
The Asahi said the bottleneck in the project has been the development cost, said to be some 150 billion yen.
Mitsubishi Heavy has also invited trading houses, banks and other companies in Japan to invest in the venture, it said.
Auto manufacturers such as Ford Motor Co., General Motors and Chrysler Corp. all dabbled in the aircraft and aerospace business but sold off their ventures by the 1960s.
Toyota meanwhile succeeded in a test flight of a four-seat, single-engine airplane in California in 2002.
Its spokeswoman said Toyota was still involved in that research but declined comment on whether it had decided not to manufacture aircraft by itself.
"We have been exploring the possibility of using an automobile engine in aircraft," she said.
Honda Motor started taking orders in the United States in October 2006 for its Honda Jet, a lean-burn, single-engine plane with seven to eight seats that has attracted interest amid rising fuel costs.
After receiving more than 100 orders for the Honda Jet, the company said just this week that it will also start taking orders from Canada and Mexico for the plane, which is priced at 3.9 million dollars.
The news about Toyota failed to lift its shares, which fell 0.73 percent to close at 5,460 yen amid worries about the impact of slowing US economic growth and a stronger yen, which is bad for exports, dealers said.
"It is unclear at the moment how much the new business will contribute to Toyota's earnings," said Kazuhiro Takahashi, head of the equity department at Daiwa Securities SMBC.
Mitsubishi Heavy shares fell 0.22 percent to 463 yen as the benchmark Nikkei-225 index ended 0.16 percent lower.
Those billions they have in cash have to be used up somewhere.