Wednesday June 12, 6:13 pm Eastern Time
Reuters Business Report
Toyota Tests Plane, Considers New Market
By Michael Ellis
DETROIT (Reuters) - A single-engine prototype airplane designed by Toyota Motor Corp. (Tokyo:7203.T - News) took flight for the first time last month in California, signaling that the Japanese automaker is considering expanding from cars into aviation, officials said on Wednesday.
The four-seat, propeller-driven aircraft was flown at a Mojave, California airport north of Los Angeles on May 31 to test the components and construction of the plane, called the Toyota Advanced Aircraft.
Toyota has about 40 people, including aeronautical engineers, working out of its Torrance, California, office on the plane and possible business ventures in aviation, part of the company's efforts to expand beyond the automotive industry.
"There's a potential for a business opportunity here, and that's why we're studying it," said Toyota spokesman Mike Michels. "The current aircraft out there are really getting old. There's going to be some demand for new planes to replace these."
Sales of privately owned airplanes in the United States, the world's largest market, are expected to climb over the next few years as older models are scrapped, Michels said.
Toyota could apply its manufacturing expertise, which has made it the benchmark in vehicle quality, to the aircraft industry, Michels said. The Toyota plane is made from composite plastics, rather than aluminum that is popular on older aircraft, which could bring down the price and improve the strength.
NO VISIONS OF FLYING CARS
Despite Toyota's immense size and strength in the automotive industry, Michels played down any talk that the automaker is out to revolutionize the small aircraft industry, now dominated by Textron Inc.'s (NYSE:TXT - News) Cessna and New Piper Aircraft.
"We hold no illusions of sort of Tom Swift kinds of visions of flying cars," Michels said. "We think there is a market, but in terms of pricing, we would be competitive with similar types of aircraft."
A Boeing Co. (NYSE:BA - News) executive said on Wednesday that Toyota was "innovative," and its airplane efforts were worth watching.
"They certainly understand how to manufacture," said Jim Albaugh, president and CEO of Boeing Space & Communications, speaking at a luncheon in Los Angeles. "They certainly understand how a supply system works. We'll see."
In the early 1990s, Toyota worked with aerospace components manufacturer Hamilton Standard to converted V8 car engine used by its Lexus luxury cars for use in a multi-engine airplanes. The engine was certified for use, but Toyota shelved any production plans after deciding that the business case was not viable.
Toyota may decide to build another prototype airplane that could be certified by the U.S. Federal Aviation Administration, Michels said. But he stressed that the project could be abandoned if it is decided that the market is not viable.
Toyota declined to release any photos of the airplane, but Aviation Week and Space Technology last week published a picture of the aircraft as it flew above a landing strip.
Scaled Composites, headed by legendary aircraft designer Burt Rutan, assembled the Toyota prototype. Rutan is best known for designing the long-winged Voyager, the first airplane to fly around the world without refueling