Japan's Fuji Heavy Industries Ltd (7270.T) plans to open a plant as early as next year to build wing boxes for Boeing Co's (BA.N) 777X passenger jet, the Nikkei reported.
Fuji Heavy, which makes Subaru cars, will likely spend more than 10 billion yen ($98 million) to construct the factory at the same site in Aichi Prefecture, central Japan, where it assembles wing boxes for Boeing's 777 jets and its carbon composite 787 Dreamliner, the business daily said.
Fuji Heavy is the sole maker of the component, which connects the main wings to the fuselage, for both those jetliners. By awarding the tried-and-tested supplier the contract for the 777X, the U.S. plane maker stands a better chance of having its latest plane ready for a planned rollout in 2020.
Boeing, which has so far won 300 orders for the 777X at six airlines, said no decision on supply contracts had yet been made.
"Supply chain partnerships and production system decisions will be addressed at the appropriate time," the planemaker said in a statement.
A spokesman for Fuji Heavy said it will decide on construction of any facility to build 777X wing boxes when Boeing places an order.
The new Fuji Heavy plant is expected to build 100 777X wing boxes a year, the Nikkei said.
As Boeing will build the wings for the 777X in the United States, Japanese companies including Fuji Heavy, Mitsubishi Heavy Industries (7011.T) and Kawasaki Heavy Industries (7012.T) will likely get a smaller share of the aircraft construction than the 35 percent of the 787 they build.
The companies and the Japanese government are instead aiming for a workshare of the 777X on a par with the 21 percent of the 777 airframe they make, including the wing box and parts of the fuselage.
Japan's biggest carrier, ANA Holdings Inc (9202.T), gave that effort to win work from Boeing a boost in March when it ordered 20 777X wide-body jets.
Local rival Japan Airlines (9201.T) last year opted for planes from Boeing's European rival Airbus Group (AIR.PA) to replace its older 777s, threatening the U.S. company's dominance in Japan where it holds more than 80 percent of the commercial aviation market.
($1 = 101.85 Japanese Yen)
(Reporting By Tim Kelly and Maki Shiraki in TOKYO, Sampad Patnaik in BANGALORE; Editing by Savio D'Souza and Ryan Woo)