Kawasaki to Transfer Subsidiary Stock

 Tokyo, November 6, 2006 — Kawasaki Heavy industries, Ltd. today announced that it has reached an agreement with Aero Asahi Corporation to transfer stock of Kawasaki Helicopter System Ltd. (KHS), a wholly owned subsidiary of Kawasaki, to Aero Asahi.

 Established in 1967, KHS focuses on commissioned operations of helicopters for prefectural disaster prevention activities and for medical services, maintenance of helicopters on commission, and training of pilots and mechanics. By becoming a core member of the Aero Asahi Group, the deal enables KHS to offer enhanced services to Kawasaki BK 117 helicopter customers.

 Kawasaki will continue to provide technical and other support to KHS aimed at improving customer services. At the same time, Kawasaki plans to allocate management resources to enhance the manufacture, maintenance, sale, and logistics of the aircraft.

 The deal will be closed in March, 2007. There will be no material impact on Kawasaki’s consolidated financial results.

Company Profile:

Kawasaki Helicopter System Ltd.
  Location: 1 Kawasaki-cho, Kakamigahara-shi, Gifu Prefecture
  Representative: Hiroshi Hiraki, President
  Established: March, 1967
  Capital: 200 million yen
  Ownership: Kawasaki Heavy Industries 100%
  Businesses: Operation and maintenance of helicopters, training of pilots and mechanics
  Number of employees: 70 (As of October 1, 2006)
  Net sales: 1,644 million yen （Fiscal year ended March 31, 2006）

Aero Asahi Corporation
  Location: 49-4 Minami-Ikebukuro 2-chome, Toshima-ku, Tokyo
  Representative: Kenichi Asano, President
  Established: July, 1955
  Capital: 3,192.5 million yen
  Ownership: Toyota Motor Corporation 97.44%
  Businesses: Cargo and passenger transfer, operation of helicopters for medical service and media reports, aerial surveys
  Number of employees: 1,189 (As of October 1, 2006)
  Net sales: 23,203 million yen (Fiscal year ended March 31, 2006)