By Tim Kelly and Nobuhiro Kubo
TOKYO (Reuters) - In January, a top U.S. Marine general visited Mitsubishi Heavy Industries in Japan to look at a prototype of an amphibious assault vehicle that could one day be a key pillar in Prime Minister Shinzo Abe's push to sell weapons abroad.
Using engines adapted from the main battle tank the company makes for Japan's military and new water jet propulsion technology, the full-size prototype is undergoing pool tests, although it is in the early stages of development and production could be years off.
Nevertheless, the maker of the wartime Zero fighter plane is eyeing overseas sales after Abe lifted a decades-old ban on arms exports in April last year as part of his more muscular security agenda, two Japanese defense industry sources said.
Mitsubishi designers believe the prototype shown to U.S. Marine Corps Pacific commander Lieutenant General John Toolan will be more maneuverable and faster across the water than the 40-year-old AAV7 amphibious assault vehicle used to carry U.S. marines onto beaches from naval ships anchored offshore, the sources said.
The AAV7 is built by the U.S. unit of Britain's BAE Systems.
The prototype's engines in particular could be fitted onto other armored vehicles, the sources added.
"It's an opportunity for Mitsubishi Heavy to tap overseas markets for its engine technology," said one of the sources, who declined to be identified because he was not authorized to speak to the media.
Mitsubishi Heavy wants to build an amphibious armored vehicle that can move through water at 20 to 25 knots (37 to 46 km per hour) compared to the more than 7 knots (13 km per hour) reached by the AAV7, said the sources.
"If the Japanese can get 20 knots in the water without compromising maneuverability on land, we will be very interested," said one Marine Corps official who saw the prototype in January but declined to be identified.
"Whether that's possible remains to be seen."
A Mitsubishi Heavy spokesman said the prototype had been shown to the Japanese Ministry of Defense, but declined to give details about the vehicle. At a Paris arms show last June, a suitcase-sized model of an eight-wheeled armored troop carrier was the centerpiece display at the company's exhibition booth.
The Ministry of Defense was aware of Mitsubishi Heavy's research into amphibious vehicles but was not involved in the project, a ministry spokesman said.
Manny Pacheco, a spokesman for U.S. Marine Corps procurement, declined to comment on the prototype.
But he said the Marine Corps was "always interested in the technological advances of industry" and encouraged manufacturers to use "every opportunity to showcase their wares and get their products submitted through our competitive procurement process".
Amphibious vehicles are central to marine units around the world, allowing forces to operate on land and sea. But there has been little significant technological advancement in such vehicles in recent decades.
A tracked Expeditionary Fighting Vehicle that was being developed for the U.S. Marine Corps by U.S. weapons maker General Dynamics Corp was canceled in 2011 after big cost increases and technical issues.
The Marine Corps last year kicked off a competition for a new wheeled amphibious combat vehicle (ACV) that could operate on shorelines and shallow water.
Pacheco said the Marine Corps was reviewing proposals from five manufacturers to build a prototype. He did not identify the companies.
A feasibility study by BAE and General Dynamics had recommended against using current technology to build a vehicle in line with Marine Corps requirements, a U.S.-based BAE spokeswoman told Reuters.
"The study concluded that although the technology existed, it would not be fielded at an affordable price," she said.
BAE was talking to Mitsubishi Heavy about being a potential partner on the body design of the new Japanese vehicle, the BAE spokeswoman added.
General Dynamics was in similar talks with Mitsubishi Heavy, said sources in Japan. General Dynamics said it did "not have any information to provide at this time".
NEED FOR SPEED
Mitsubishi Heavy has been making armored vehicles for Japan's military for around 80 years, beginning with the Imperial forces in the 1930s. It also builds fighter aircraft, naval vessels, submarines and missiles.
The company also makes high-speed marine engines and water jet propulsion systems, according to its website.
"Japan's technology is good enough that we have to look at it," said a U.S. military industrial source familiar with the amphibious vehicle plans.
Although a coastal nation, post-war Japan only formed an amphibious military unit in 2012. The 3,000-strong unit will be equipped with more than 50 AAV7s.
It was disappointment at the speed of those vehicles over water that spurred Japan to build a new one, Japanese defense officials told Reuters.
Japan's military is also concerned about the ability of the caterpillar-tracked vehicles to ride over coral reefs, a common feature in the East China Sea, where Tokyo is embroiled in a territorial dispute with China.
The BAE spokeswoman acknowledged the desire of the U.S. Marine Corps to increase water speed, adding there should be "no operational concern" with coral reefs.
(Editing by Dean Yates)