Mitsubishi Heavy Industries Ltd (7011.T) should have pushed harder to market its defense technology to win a $40 billion submarine sale to Australia, and is open to partnerships with U.S. defense companies, Chief Executive Shunichi Miyanaga said on Friday.

The logo of Mitsubishi Heavy Industries is seen at the company's news conference in Tokyo, Japan May 9, 2016. REUTERS/Issei Kato
The logo of Mitsubishi Heavy Industries. REUTERS/Issei Kato

In a wide-ranging interview with Reuters journalists, Miyanaga said the industrial conglomerate, known as MHI, likely will continue investing in the United States whatever the outcome of the U.S. presidential election on Nov. 8, and expressed frustration about overstated automobile mileage readings on vehicles made by Mitsubishi Motors Corp (7211.T), which it has a 12.6 percent stake in but does not control.

He also expressed little concern about Britain’s upcoming referendum on European Union membership, because MHI has relatively small exposure to Europe.

The Japanese yen is within the company’s comfort zone of 105-115 yen to the dollar, he said, despite recent strengthening. The dollar was quoted Friday at 104.17 yen.

In the submarine contest, “we were a little bit not aggressive in explaining our advantages because we felt it was kind of a defense secret,” Miyanaga said, noting Japan continues to see the possibility of exporting defense systems.

“We will have to change our approach. In this kind of market we need to be more clear and persuasive,” he said, adding: “We would like to pursue more opportunities with American partners.”

France in April won the Australian submarine contract, a come-from-behind victory on one of the world’s most lucrative defense deals, leaving Tokyo’s dream of fast-tracking a revival of its arms export industry in disarray.

Separately, MHI is “frustrated” by the Mitsubishi Motors mileage scandal, Miyanaga said, because some people confused it with the car company even though the two are independent.

MHI has does not see Mitsubishi Motors as a strategic business but has no plans at present to sell its stake, he said.

Earlier Friday, Mitsubishi Motors said it would give owners of four minivehicles close to $1,000 in compensation for its overstating of mileage readings, part of reimbursement costs that will total at least $600 million.

(Reporting by Alwyn Scott; Editing by Tom Brown)

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