Orix Capital Trading Comments on Japan Looking to Produce for International Arms Market

    LONDON, ENGLAND, September 10, 2016 /24-7PressRelease/ -- Mitsubishi Heavy Industries (MHI) has entered into preliminary discussions with an as yet unidentified United States firm concerning a possible agreement to develop an armoured military vehicle.

After a 10 year old ban on foreign arms sales expired two years ago, the country had hoped that a submarine deal with Australia involving MHI would be their first major arms export agreement, but talks broke down and the $50 billion contract went to China.

For a country that is inexperienced with global arms sales, an agreement with the U.S. may be a significantly easier entry point and would show proof of concept to the world's arms buyers.

"For Japan, America would be the easiest market to break into," said Steve Rogers, Director of Asset Allocation at Orix Capital Trading in a note to clients.

"MHI are the leading defence contractor in the country and are desperate to move forward into the world market now that their restrictions have been lifted," he added.

Mitsubishi make arms for the nation's Self Defence Forces (SDF) and are famous for their production of the Zero fighter which saw action in WW2. The firm will be hoping their move into the world market might give it more control over the intellectual property rights of its technology, which are currently under the remit of the SDF.

MHI's Defence and Space Systems chief Hisakazu Mizutani said the talks with the U.S. firm are "in early stages but ongoing" and the deal would be overseen by the Japanese MoD. He also hinted that MHI were approached by the U.S. firm regarding the possible partnership to design and build a new armoured personnel carrier containing state of the art technology.

MHI have had a close relationship with several American defence contractors for many years and has previously partnered with firms like Boeing and Lockheed Martin for development of the SDF's modern military aircraft.

The development of an armoured vehicle would create brand new opportunities for MHI to enter the global stage in an exciting new area. Tanks have long been seen as a dated military vehicle and smaller, lighter and more versatile armoured cars and trucks are considered to be the future of ground warfare.

New foreign business could attract buyers to other MHI products such as their gear technology and amphibious lines.

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