Jan 7 (Reuters) -

A Toyota ( TM ) research unit will invest in Japanese

startup Interstellar Technologies (IST) to support mass

production of its rockets, the world's biggest carmaker group

said on Tuesday, expanding its foray into the space sector.

IST said that Woven by Toyota ( TM ), a Toyota ( TM ) subsidiary that

is building a "

city of the future

" in Japan with autonomous driving technology, will invest

about 7 billion yen ($44.4 million) in IST by the first close of

its Series F funding.

As part of the capital and business tie-up, Woven will

appoint a director to IST's board and support rocket production

by strengthening supply chains and corporate governance, IST

said in a

statement.

The announcement came after Toyota ( TM ) Chairman Akio

Toyoda's

speech

at the CES trade show in Las Vegas on Monday, where he gave

updates to the company's experimental Woven City project, which

was announced in 2020.

"The future of mobility shouldn't be limited to just

Earth, or just one car company," Toyoda said. "Speaking of the

sky, we're exploring rockets, too."

Apart from launchers, Toyota ( TM ) is building a

lunar rover

with Japan's space agency that can carry astronauts on the

moon's surface for the NASA-led Artemis programme.

The commercial race for space has accelerated over the

past decade, led by Elon Musk's rocket and satellite company

SpaceX.

The Hokkaido-based IST in 2019 became the first Japanese

company to send a commercially developed rocket into space, but

its orbital launcher, Zero, remains under development.

IST's rival Space One last month attempted a second flight

of its orbital rocket Kairos, but the launch failed.

The Japanese government

aims

to launch 30 rockets annually by the early 2030s and make

Japan Asia's space hub, with an 8 trillion yen space industry,

granting subsidies to startups such as IST and Space One.

($1 = 157.6000 yen)