Section 4. New Business Enterprises

Item 4. Initiatives in Marine and Aerospace Businesses

In the marine business field, TMC established the Marine Business Planning Department inside its Business Development Division in February 1990, and began exploring commercialization potentials while obtaining cooperation from other group companies such as Toyoda Automatic Loom Works, Aisin Seki, and Denso. As a result, in 1991 TMC commenced R&D activities focused on pleasure craft, adopting a marine engine based on a high-performance automotive engine. In 1992, TMC produced a 27-foot (approximately 8.2 m) prototype featuring a recyclable aluminum hull. Around the same time, TMC also entered the marine resort industry by establishing Gamagori Marine Development Co., Ltd., based on a request from Aichi Prefecture.

In 1994, TMC began performance evaluation using two early 28-foot boats and took concrete steps toward commercialization by, for example, signing agreements with two companies in New Zealand for outsourcing manufacturing in 1996. A formal commercialization proposal was submitted at Top Executive Meeting that year and approval was given for the basic goal of making the marine business a key non-automotive business for generating 10 percent of TMC's total sales revenue. In January 1997, TMC established its Marine Business Division (MBD) and announced the "Ponam-28" at the Tokyo International Boat Show in February.

In 1998, MBD opened sales offices in Tokyo, Nagoya, and Osaka, and also established a sales structure by signing contracts with 16 dealers throughout Japan. MBD enhanced its product lineup, launching a 26-foot craft and a 37-foot craft in 1999,1 and set out to sell marine engines on a full scale around the same time.

Beginning in 2002, MBD changed its manufacturing subcontractors to two companies in Japan and in October 2005 announced its flagship Ponam-45, aimed to become the "Lexus of the seas", receiving orders far surpassing plans. MBD’s boat sales in fiscal 2006 (ended March 2007) reached an all-time annual high of 93, achieving a cumulative sales volume of 700 within the fiscal year 2010.2 In September 2011, MBD launched the Ponam-35, positioned between the "28" and the "45" series.

In the aerospace business, as part of voluntary efforts to increase imports, TMC set out to sell small airplanes by investing in Japan Flying Service Co., Ltd. in 1988. In 1991, TMC established its Aerospace Business Planning Department, and built the Shikabe Airport in Shikabe-cho, Hokkaido, with the expectation that pilot training and dedicated airports would become necessary as the use of small airplanes became widespread in the future, and took ownership of the airport in September 1992. In the same year, TMC and Japan Airlines jointly established AirFlite Japan Corporation to operate and manage the airport. Then in 1997, TMC acquired the shares of Aero Asahi Corporation from then Seibu Department Stores, Ltd. and participated in its management. Since that time, TMC has been outsourcing the operation of helicopters and business jets to Aero Asahi.

While expanding these aero service businesses, TMC also proceeded to develop small airplanes, including their engines. In 1993, the Higashi-Fuji Technical Center joined with a corporation in the of the United States to develop the world's first electronically controlled aero piston engine, acquiring type certification in 1995 and manufacturing certification in 1996. For the airplane body, TMC established a development center inside TMS in 1994 and began its study. With TMS taking the lead role in the joint efforts to develop a four-seat aircraft, the first successful flight occurred in 2002. Although TMC was able to demonstrate its technical capabilities in developing the small airplane, the aircraft has not achieved commercialization due to marketability issues and others.

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