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THE PRESENT ENVIRONMENT 52 could support a significant, aggressive light aircraft industry without access to the U.S. market. Emerging Competition from Japan The Japanese represent the latest potential foreign competitor. The Ministry of International Trade and Industry (MITI) has identified aerospace as one of the targeted industries of the future.8 Furthermore, MITI has identified the building of capability to develop new aerospace technology independently as one of the two most important things for the industry's future. Japan has been acquiring modern technological and production capability through coproduction of military aircraft. It has ventured, with some success, into the business turbojet and turboprop aircraft markets with the Diamond-1 and Mitsubishi MU-2 aircraft. Japan itself is not a significant user of its own business aircraft. Almost all of its production is exported. Of the first 600 MU-2 aircraft produced, 450 were sold in the United States, 120 in other countries, and 30 in Japan. After an earlier commercially unsuccessful effort to introduce a commuter aircraft, Japan has become a subcontractor and venture partner with Boeing on the 767. In addition, Japan is participating in an international consortium with Rolls Royce, Pratt and Whitney, and German and Italian partners to develop and produce a new engine for the prospective ''150-passenger" aircraft (described in Chapter 5). Part of the motivation for this venture appears to be to gain access to large-scale test and development facilities currently lacking. Another is the need to learn how to establish credibility in the marketplace. As noted earlier, Japan is also developing a civil helicopter with a West German firm. The nature of Japan's long-term thrust is not fully clearâprime, partner, or subcontractor. The MITI position is that the magnitude of the technological and financial risks dictates the use of international joint ventures. Gaining access to foreign markets will also require joint ventures, and furthermore, creating market acceptance for Japanese products may well require international partners with long experience and established positions. Were the Japanese to join forces with the Europeans, the competitive threat, both technologically and in terms of access to markets and capital, would be formidable. However, achieving a major role as an independent designer and manufacturer of large transport aircraft almost certainly will require a much more substantial investment by the Japanese government and/or industry in aeronautics R&D than currently is planned. For the next 10 to 15 years Japan probably represents a larger threat to major U.S. producers of large aircraft parts and components than to the
