Toyota has decided to assist with the finance of a flying car project in Japan, according to a Nikkei report.

The news agency said that some of Toyota's young employees have been voluntarily working on the project led by a start-up group called 'Cartivator'.

The report said the project began in 2012 and project members have hitherto donated free time to the goal of developing a 'flying car' or drone capable of carrying a person (the 'Skydrive' prototype has three wheels and four rotors).

Nikkei said Toyota has agreed, in principle, to provide some 40 million yen to Cartivator, which has so far relied on online crowdfunding and other means for financing.

It added that the group plans to develop a prototype for a manned test flight by the end of 2018 and hopes to commercialise a flying car in 2020, when Tokyo hosts the Olympics.

Toyota's seed fund investment follows recent media buzz around 'flying car' start-ups. However, analysts caution that there are a number of considerable hurdles – regulatory as well technological – before such aircraft could become ready for practical applications. One scenario sees such craft flying at low altitude on special city corridors and autonomously controlled from special landing and take-off stations.