IRIA News

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Italian defense giant Leonardo and German firm Rheinmetall have officially established a joint venture to develop and produce cutting-edge military combat vehicles in Europe. The two companies would have an equal share of 50% each in Leonardo Rheinmetall Military Vehicles, with corporate headquarters in Rome and operational headquarters in La Spezia.

Named Leonardo Rheinmetall Military Vehicles (LRMV), the venture aims to bolster the Italian Army’s modernization program, starting with the development of a new Main Battle Tank (MBT) and advanced Armored Infantry Combat Systems (AICS).

The partnership between the two defense giants was announced during a formal initiation ceremony in Rome. It will be split evenly, with each company holding a 50% share. LRMV’s legal headquarters will be in Rome, while operational activities will be in La Spezia. Pending regulatory approvals, expected by early 2025, this partnership marks a pivotal step in shaping the future of European land defense systems.

The primary objective of LRMV is to modernize Italy’s land forces by creating a new battle tank based on Rheinmetall’s Panther KF51 platform, along with over 1,000 armored vehicles in 16 different variants under the AICS program.

These vehicles include infantry fighting vehicles, anti-aircraft systems (Skyranger), reconnaissance units, and anti-tank models. With a modular design and advanced technological base, the Lynx infantry fighting vehicle will form the backbone of these variants.

New era for European defense collaboration

Speaking on the partnership Armin Papperger, the CEO of Rheinmetall, stated, “We are creating a new heavyweight in European tank production. Leonardo and Rheinmetall, two leading European suppliers of defense technology, are joining forces to carry out ambitious projects. We are primarily addressing the Italian market, but we will also be targeting other partner nations that need to modernize their combat systems in the future.”

Leonardo’s CEO Roberto Cingolani highlighted the significance of the venture in a broader European context: “This is a significant step towards the creation of a European defense system based on specialized shared platforms. Rheinmetall and Leonardo aim to develop state-of-the-art technologies that can compete at the international level.”

The collaboration will see a 50:50 sharing of labor, with 60% of the work conducted in Italy, including final assembly, testing, and logistics. Leonardo will spearhead the development of mission systems, electronics, and weapons integration, while Rheinmetall will focus on providing its advanced vehicle platforms.

This venture represents a major milestone in the modernization of Italy’s defense capabilities. With a strong emphasis on the Italian Army’s modernization, both partners also anticipate substantial international interest. European nations, particularly those bordering NATO’s eastern flank, are eager to upgrade their land-based combat vehicles amid the backdrop of rising security concerns, including the ongoing Russia-Ukraine war.

Rheinmetall already operates an active business in Italy, with five sites employing around 1,500 people and generating sales of approximately $1.06 billion. This strong foundation gives the new venture a powerful starting point in Europe’s competitive defense industry.

Growing need for tanks and land warfare equipment

The importance of armored vehicles, particularly tanks, has taken on renewed significance since Russia invaded Ukraine in 2022. The war has highlighted the critical role that modern, mobile, and well-armored ground forces play in defending territory and countering both conventional and hybrid threats. Ukraine’s success in halting Russian advances has underscored the enduring importance of tanks and infantry vehicles on the battlefield, despite advancements in drone warfare and cyber capabilities.

European nations have responded to the shifting security landscape by investing in tank production and upgrading their military hardware. Countries such as Poland, Germany, and Finland have expanded their tank fleets or modernized their existing ones, spurred by the need for enhanced mobility, firepower, and protection in land-based warfare. The creation of LRMV will allow Italy to join this trend, offering a fresh range of highly capable armored vehicles designed to meet the complex challenges of modern warfare.

The Lynx platform offers a high degree of adaptability, allowing operators to configure the vehicles for different missions easily. The new Italian MBT, based on the Panther KF51, is expected to replace the aging Ariete tank, a model that has served in the Italian Army since the 1990s. The introduction of these modernized combat systems will significantly enhance Italy’s military capabilities and provide opportunities for export to other European countries seeking to bolster their defense.

As NATO and EU member states continue to place a renewed focus on territorial defense, this joint venture sets the stage for Italy to play a more prominent role in the production and export of advanced military technologies. The new vehicles will be highly sought after, particularly in countries looking to upgrade their land forces considering the lessons learned from the Russia-Ukraine conflict.