Toyota nears entry into MHI's jet project
Toyota Motor Corp. has entered the final stage of talks to invest about 10 billion yen in a small passenger jet project led by Mitsubishi Heavy Industries Ltd., sources said.
If Toyota joins the Mitsubishi Regional Jet (MRJ) project, it would be the automaker's first entry into the aircraft industry.
Mitsubishi Heavy plans to set up an operating company for the project as early as April to finance Japan's first domestically developed passenger jet, according to the sources.
The participation by a big-name company with ample funds like Toyota would provide a tremendous boost to the MRJ project.
The operating company for the project would be capitalized at about 100 billion yen, with Mitsubishi Heavy covering 60 percent and Mitsubishi Corp. also chipping in.
The heavy machinery maker has been calling on a range of companies, including domestic manufacturers associated with the airline industry, trading houses and banks, to participate.
Mitsubishi Heavy has said it will start implementing the project if it receives advance orders for 100 jets. A decision is expected at the end of this month.
Japan Airlines Corp., All Nippon Airways Co. as well as U.S. and European carriers have shown interest, according to the sources.
The project is designed to create two models of a next-generation passenger jet--one that seats around 70 and the other around 90.
The MRJ is expected to be lighter and far more fuel-efficient than existing jets because it will use a carbon fiber composite material for 30 percent of its fuselage. Japan has advanced production technologies for this material.
The heavy machinery maker has been conducting research for the planned MRJ since 2003. The inauguration of the jet is set for 2012.
The government has promoted domestic development of a passenger jet, but the estimated cost of 150 billion yen has been a sticking point.
Toyota Motor has shown interest in the robotics and aircraft industries.
In fact, documents show that Kiichiro Toyoda, founder of what is now the world's largest automaker in terms of production, pushed for aircraft research in the 1930s, when the company was a start-up.
In 1991, Toyota set up a department to prepare for entry into the aircraft business, but it later abandoned the attempt.
Mitsubishi Heavy in autumn last year announced that U.S.-based Pratt & Whitney will supply engines for the project.
In February, Mitsubishi Heavy picked five companies to supply major components of the MRJ.
If completed, the MRJ would be Japan's second domestically produced passenger plane in the postwar years after the propeller-driven YS-11.(IHT/Asahi: March 6,2008)