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Toyota 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.
http://afp.google.com/article/ALeqM5j9SwVpptSeOHFSz6ztk-NqUATiKA

Those billions they have in cash have to be used up somewhere.

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Whatever happened to "HondaJet"??

Maybe they'll build a hybrid aircraft lol. How much energy does it need to cruise at altitude? Maybe they can use some other renewable fuel for cruising.
 

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Perhaps this is Watanabe-san's preferred method to implement his "around the world on one tank of fuel" goal: today, Tokyo to Osaka (regional jet distance), tomorrow, Tokyo around the world back to Tokyo!
 

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Toyota really is following GM's footsteps.

GM bought Hughes Aircraft in 1985, bought a number of other side enterprises like Delco (which later became Delphi), plus the heavy truck division, and the company became so top-heavy that it all came crashing down by the early 1990s when GM nearly went bankrupt. Ford was the same way; both companies have sold off these assets because they only detract attention from the core car business.

I realize many Japanese companies such as Mitsubishi are conglomerates with many companies rolled into one (I can't remember the Japanese name for it), but if Toyota has no history with the aircraft industry, it's best they stay out of it. Considering how fast they have grown in the car business, this would be a huge gamble. Does Toyota really want to spend billions setting up an aircraft division when they are seeing rising operating costs and have to oversee a much larger sector of the world auto market? We've already seen what stretching resources thin did to GM and Ford...does Toyota want to take that risk?
 

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Why does Toyota want to enter the aerospace market? Because the car market is nearly saturated, becoming increasingly competitive, and thus there's less return on the investment to increase market share. Japan, NA and Europe are stagnant markets leaving only Asia and S.America as expanding markets. But that won't last forever...

With another vision for the future in new markets, it'll give the company time to ramp up and expand elsewhere. Besides, Toyota makes more than just cars today....homes, robotics, etc are just a few.

It all started with a loom machine so I'm not surprised Toyota's looking at opportunities in new ideas and markets.

As for following GM and Ford's footsteps, I doubt that Toyota will have the same bloat issues they experienced. It's amazing what you can do for a company and employee job satisfaction when the union's get out of the way of progress.
 

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Discussion Starter #6 (Edited)
Toyota really is following GM's footsteps.

GM bought Hughes Aircraft in 1985, bought a number of other side enterprises like Delco (which later became Delphi), plus the heavy truck division, and the company became so top-heavy that it all came crashing down by the early 1990s when GM nearly went bankrupt. Ford was the same way; both companies have sold off these assets because they only detract attention from the core car business.

I realize many Japanese companies such as Mitsubishi are conglomerates with many companies rolled into one (I can't remember the Japanese name for it), but if Toyota has no history with the aircraft industry, it's best they stay out of it. Considering how fast they have grown in the car business, this would be a huge gamble. Does Toyota really want to spend billions setting up an aircraft division when they are seeing rising operating costs and have to oversee a much larger sector of the world auto market? We've already seen what stretching resources thin did to GM and Ford...does Toyota want to take that risk?
Comparing Japanese management to Domestic management of the 80's is a fallacy.

Any company that has massive cash reserves like Toyota, must invest them. You can only spend so much on building cars.

GM drove all it's companies into the ground just like its own business. It wasn't the purchase of these companies, it's how they were managed.

It happens all the time that companies enter new ventures. Some work some don't. Trying to equate this with Hughes aircraft is a weak comparison at best.

By the way, Toyota invested about 100 million. The same amount Ford just gave it's employees.

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Why does Toyota want to enter the aerospace market? Because the car market is nearly saturated, becoming increasingly competitive, and thus there's less return on the investment to increase market share. Japan, NA and Europe are stagnant markets leaving only Asia and S.America as expanding markets. But that won't last forever...

With another vision for the future in new markets, it'll give the company time to ramp up and expand elsewhere. Besides, Toyota makes more than just cars today....homes, robotics, etc are just a few.

It all started with a loom machine so I'm not surprised Toyota's looking at opportunities in new ideas and markets.

As for following GM and Ford's footsteps, I doubt that Toyota will have the same bloat issues they experienced. It's amazing what you can do for a company and employee job satisfaction when the union's get out of the way of progress.
Comparing Japanese management to Domestic management of the 80's is a fallacy.

Any company that has massive cash reserves like Toyota, must invest them. You can only spend so much on building cars.

GM drove all it's companies into the ground just like its own business. It wasn't the purchase of these companies, it's how they were managed.

It happens all the time that companies enter new ventures. Some work some don't. Trying to equate this with Hughes aircraft is a weak comparison at best.

By the way, Toyota invested about 100 million. The same amount Ford just gave it's employees.

Fan
rolla-XRS and Fan make some excellent points that I happen to agree with. Profitable -- and responsible -- companies will not just sit on their profits, but will find responsible ways to put them to good use; in other words, to invest them wisely in new ventures and new products. Toyota has been profitable because it has been responsible, investing its profits wisely in new product.

As the automobile industry is coming to a saturation point, it is wise to look at new ventures and new products outside of cars and trucks. The regional jet (comfortable, small jet aircraft, as opposed to rough-flying propeller aircraft, flying short-range, small city to small city, or small city to nearest major hub, such as Toronto, Canada to New York City) is the growing sector in aviation, especially if it has new-generation, fuel efficient engines. And, as with any new product development these days -- either automotive or aviation -- it costs a lot of up-front capital, so it is only wise to share the costs, either by sharing the platform (as with new cars) or by having different companies invest in different parts of the aircraft, and then share in the profits.

Mitsubishi Heavy Industries is already active in aviation and aerospace. It builds parts for the Boeing 777 and 787 aircraft; it builds fighter aircraft for the Japanese self-defence forces; it builds helicopters. As it tries to diversify its aviation offerings, it needs investment from other companies. From the article quoted above, it seems that Toyota is considering investing a mere 10% in this new venture.

What is surprising to me is that Mitsubishi is going outside of its core group of other Mitsubishi-branded companies (keiretsu) for investment in this new venture. Perhaps the only way it can raise the necessary investment capital and reduce risks is by going outside of its core group. Perhaps it is looking for technology that is not available from its core group.

And trying to compare Toyota of the 21st century with GM or Ford of the greedy, late 20th century is completely erroneous. North American (American and large Canadian) companies of the late-1980s and 1990s were greedy enterprises run by accountants with an eye only on the bottom line, to the detriment of product development; with no new product to sell, inevitably, the bottom line is going to suffer. Their preferred method of product development was to purchase other companies that were investing in development of new, innovative product; but then the purchased company would be stripped of its assets. That is not the way to manage a business. Witness what happened with GM, Ford and Canada's Nortel. Companies outside of North America, on the other hand, invested wisely in product, and they have done well. Witness Porsche (now ready to buy Volkswagen) and Toyota, two of the most profitable automobile companies.
 

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don't GM still owns some of GE aircraft engine company and Allison-Royce Rolls which build some Helicopter engine... toyota's friend subaru builds stuff for A380..
 

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don't GM still owns some of GE aircraft engine company and Allison-Royce Rolls which build some Helicopter engine... toyota's friend subaru builds stuff for A380..
I don't know if GM owned or still owns shares in GE Aviation or Rolls-Royce, which bought out GM-owned Allison Engine. There was once a company called Hughes Helicopter, but that was sold off to McDonnell-Douglas in 1984, a year before Hughes Aircraft was sold off to GM, so GM was not in the helicopter business through Hughes Aircraft.

Toyota does own 8.4% of Fuji Heavy Industries, owner of Subaru, which it bought from GM in 2005. Fuji Heavy Industries does have an aerospace division, and so the question is if FHI will get involved in this Mitsubishi aircraft, either on its own or through Toyota (i.e. Toyota calling upon Fuji for some expertise).
 

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My celica loves twistys.
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I think the Jetson way of travel is soon to come. Get your 2050Toyota i-Fly 0% APR!
I LOLed :lol:

The new 2050 Toyota Celica GTS now with more LIFT
if you dont know what this is a pun of
i lol at you
 

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the celica is back!

lol finally!
and i hear you can hit the traction control off if you wanna get twisty lmao
 
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