By Tim Kelly and Nobuhiro Kubo
TOKYO (Reuters) - Mitsubishi Heavy Industries (MHI) <7011.T> has designed a new suspension for the U.S. Army's Bradley Fighting Vehicle, said two sources with direct knowledge of the matter, potentially the first Japanese defense hardware built for export in decades.
The design is for an upgrade of the mainstay infantry carrier proposed by Britain's BAE Systems <BAES.L>. If adopted, it would be the first Japanese component designed specifically for a foreign military to be exported in seven decades.
MHI and other Japanese defense companies are seeking overseas sales after Prime Minister Shinzo Abe lifted a ban on arms exports two-and-a-half years ago. However, no significant export deals have been secured yet.
"It could be a pretty good deal for Mitsubishi Heavy," said one of the sources who know about the partnership with BAE, asking not to be identified because he is not authorized to talk to the media.
The U.S. Army currently has around 6,000 Bradley Fighting Vehicles, and has asked BAE and rival General Dynamics Corp <GD.N> to submit proposals for new or upgraded vehicles to improve mobility, fire power and survivability.
The sources did not say how much the Japanese suspension will cost. Twelve of the suspension components would be needed for the twelve road or "bogie" wheels per vehicle to cushion its tracks.
BAE displayed a prototype upgraded Bradley for the first time at the Association of the United States Army exposition in Washington in October, where it also displayed a mock up of MHI's suspension.
“It was simply displayed alongside the vehicle and at this time remains an early prototype, not a part of the vehicle,” said a spokesman for BAE Systems.
MHI did not immediately respond to a request for comment.
MHI, the maker of Japan's main battle tank, will gain new overseas avenues for its armored vehicle technology through the partnership with BAE. Since the end of World War Two, it has developed kit exclusively for the nation's Self Defense Forces.
However, that limited market for battle tanks and armored vehicles has shrunk over the past several years as Japan pivots to reinforcing islands along the southern edge of the East China Sea instead of preparing for an invasion by Russian forces on Japan's northern Hokkaido island.
MHI, the maker of the World War Two-era Zero fighter, has been making armored vehicles for Japan's military for eight decades.
In April, MHI missed out on a chance to land a major foreign military contract after Australia rejected a variant of its Soryu submarine in favor of a French design for a planned new fleet of submarines.
However, foreign companies have shown interest in MHI's gear technology and water jet propulsion systems to drive armored amphibious vehicles, industry sources earlier told Reuters.
(Reporting by Tim Kelly and Nobuhiro Kubo; Editing by Christian Schmollinger)