Japan's Toyota Motor, which is widely expected to overtake General Motors this year as the world's top-selling automaker, is considering entering the aircraft industry, a spokeswoman said Wednesday.

Toyota may put up funds to a company to be set up by Mitsubishi Heavy Industries for its passenger jet project, Toyota spokeswoman Kayo Doi said.

"Mitsubishi Heavy has invited us to invest (in the venture) and we are considering it," she said, while adding nothing has been decided yet.

The comment came after a report Wednesday in the Asahi Shimbun daily which says Toyota plans to put up 10 billion yen (97 million dollars) in the venture to be set up in April.

Mitsubishi has been developing small passenger airplanes under its Mitsubishi Regional Jet project.

Toyota Considers Investing in Mitsubishi Heavy Jet

By Naoko Fujimura and Masumi Suga

March 5 (Bloomberg) -- Toyota Motor Corp. may invest in Mitsubishi Heavy Industries Ltd.'s passenger jet, giving support to a Japanese project that will compete against Bombardier Inc. and Empresa Brasileira de Aeronautica SA.

Toyota, the world's biggest carmaker by value, received a request from Tokyo-based Mitsubishi Heavy to get involved, Toyota spokeswoman Hiromi Hirooka said today, responding to an Asahi newspaper report. ``Nothing has been decided yet,'' she said.

Mitsubishi Heavy, Asia's largest aerospace company, is seeking investors and airline customers to start commercial production of Japan's first passenger jet in a market dominated by Canada's Bombardier and Brazil's Empresa Brasileira, or Embraer. The Japanese manufacturer will make a decision by the end of this month on whether it will launch the program.

``Toyota's investment would be a selling point to get sponsors for the project,'' said Yuichi Ishida, an analyst at Mizuho Investors Securities Co. in Tokyo. ``Still, the size of the investment is not big, given the huge development cost is estimated at about 150 billion ($1.5 billion) yen.''

He rates Mitsubishi Heavy ``neutral plus.''

Mitsubishi Heavy is ``seeking cooperation'' to build the 70- to-90 seat regional jet, said Hideo Ikuno, an outside spokesman for Mitsubishi Heavy, without providing details.

Toyota may invest 10 billion yen in a new company Mitsubishi Heavy plans to set up in April, the Asahi reported today, without saying where it obtained the information. The new company will raise funds and make the jet, the newspaper said.

Shares of Aichi prefecture-based Toyota fell 0.6 percent to 5,470 yen at the 11 a.m. break on the Tokyo Stock Exchange. Mitsubishi Heavy's stock dropped 1.5 percent to 457 yen.

Orders Needed

Mitsubishi Heavy would need at least orders for 100 planes to absorb development costs, Mizuho Investors' Ishida said. All Nippon Airways Co., Japan's largest domestic carrier, said in September it's considering the aircraft, becoming the first airline to publicly express interest. Japan Airlines Corp. said in December it may buy the plane.

``Toyota's possible investment would provide solid support for Mitsubishi Heavy's project,'' said Hitoshi Yamamoto, who manages the equivalent of $5.5 billion in Japanese equities, including carmakers, as chief executive officer of Fortis Asset Management in Tokyo. ``Toyota has a strong brand.''

The Mitsubishi Regional Jet, or MRJ, would be the first domestically built passenger aircraft since production of the YS- 11 propeller plane ended in 1973.

The MRJ would use United Technologies Corp.'s Pratt & Whitney engines that have fans that spin independently of the main turbine, a design Pratt & Whitney says will cut fuel and maintenance costs.

Boeing Wings

Mitsubishi Heavy, which makes carbon-fiber wings for Boeing Co.'s new 787 Dreamliner, plans to use the technology of the lightweight material on the new jet, designed to be as much as 30 percent more fuel efficient than existing models.

Mitsubishi Heavy has also named Parker Aerospace, Hamilton Sundstrand Corp., Rockwell Collins Inc., Nabtesco Corp. and Sumitomo Precision Products Co. to help build the plane.

Shanghai-based China Aviation Industry Corp. I, known as AVIC I, last month said it will join China Eastern Airlines Corp. to start a new carrier to support sales of its own regional jet.