Cash in hand for armored vehicles, Italy weighs its clout in Europe

Cash in hand for armored vehicles, Italy weighs its clout in Europe

ROME — Italy is expected to come up with a design for a new €5 billion ($5.4 billion) armored fighting vehicle program by the end of the year after it picks European partners for the job.

To meet the target, work is now picking up pace on Italy’s A2CS program to build 1,050 tracked vehicles to replace its aging Dardo vehicles, making it Europe’s biggest current land warfare program.

“This year is going to require a lot of work to make that deadline,” said a source knowledgeable of the program who declined to be named because he was not allowed to speak on the record.

Earlier this year the Italian army handed local defense giant Leonardo and Italy’s Iveco Defence Vehicles the task of recruiting European partners who can bring expertise and platforms to the table, in the knowledge that Italy cannot afford the time or expense involved in starting a program from scratch.

The industry grouping is expected to have a design ready for the Army by Christmas.

Given the size of the program, A2CS, formerly named AICS, could be both a catalyst for long awaited integration in Europe’s ground warfare industry and shape further consolidation in the sector.

So attention will be paid to the European team-up picked by Leonardo and Iveco Defence Vehicles, which already operate their own joint venture known as CIO.

Current candidates include French-German alliance KNDS, which would propose its tracked Boxer vehicle as a baseline for the design, while Germany’s Rheinmetall has offered its Lynx. BAE Systems Hägglunds would have an outside shot with its CV90.

Planners intend to order the vehicle in 16 configurations, including combat, anti-tank, reconnaissance, 120mm light tank, anti-air, mortar carrier, ammunition carrier, command post and ambulance. The aim is to produce twenty prototypes by 2027 or 2028, with deliveries to follow between 2029 and 2041.

The A2CS program is one of two ongoing vehicle procurement programs in Italy, the second being the purchase of Leopard tanks from KNDS, which will be assembled in Italy.

Italy’s Leonardo meanwhile signed a cooperation deal with KNDS in December which covered eventual cooperation on the French-German Main Ground Combat System battle tank program being worked on by KNDS.

Italy has also signed recent bilateral defense cooperation deals with Germany and France which laid the groundwork for Italian involvement in the MGCS program.

But earlier this month the French branch of KNDS told Defense News that a planned project company between KNDS, Germany’s Rheinmetall and France’s Thales to work on the tank will remain closed to other shareholders for now.

The French and German divisions of KNDS, Rheinmetall and Thales will each hold a 25% stake in the project company, with work on different parts of the tank now divided up between France and Germany.

Alessandro Marrone, who heads the defense program at Rome think tank IAI, said the announcement suggested Italy risked being left behind.

“Italy plans to acquire the platform and be involved in the design – that was the sense of the deal between Italy and France. If it is just about sub-contracting it is not much different to Italy’s role on Leopard, which will be customized and assembled in Italy but will still be a Leopard. Italy’s ambition on MGCS is different,” he said.

“Italy did not do enough to link its Leopard purchase to involvement in MGCS, and the more structured the MGCS program becomes the more difficult it will be to change it,” he added.

One way for Italy to get a better foothold in MGCS would be if it becomes a participant in the KNDS venture.

Late last year, Leonardo bid to buy IDV from Iveco, its parent company.

Adding the firm to its own ground vehicles activity, Leonardo would have created an entity with a potentially sufficient mass to become a partner in KNDS, turning KNDS into a land version of European missile house MDBA in which nations have grouped their domestic firms.

MBDA has been offered as a model for European defense industry integration by Leonardo CEO Roberto Cingolani. Leonardo’s bid to buy IDV has however been turned down by Iveco, an industry source told Defense News.

Tom Kington is the Italy correspondent for Defense News.

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