ROME — Germany’s Rheinmetall has signed an agreement with Italy’s Leonardo to discuss the development and construction of hundreds of new tanks and tracked vehicles for Italy, weeks after European giant KNDS canceled a similar deal with Leonardo.
Rheinmetall and Leonardo signed a Memorandum of Understanding on Wednesday to establish a new 50:50 joint venture that will act as design authority and prime contractor for new platforms, the companies said in a statement.
Rheinmetall will offer its prototype Panther KF51 tank as the basis for the replacement of the aging Italian Ariete tanks, and its Lynx tracked vehicle as the basis for the replacement of the Italian Dardo vehicles.
The statement said that for both the tank and tracked vehicle programs, “mission systems, electronics packages and weapons integration are developed and produced by Leonardo according to the requirements of the Italian customer.”
“The final assembly lines, homologation tests, delivery activities and logistics support are carried out in Italy with an Italian work share of 60 percent,” it added.
The collaboration will also be used as a springboard to include Italy in the pan-European Main Ground Combat System (MGCS) tank programme.
“The technologies will form the basis for the development of the future European Main Battle Tank (MGCS),” the statement said.
The deal follows the scrapping last month of an agreement between KNDS and Leonardo under which Italy would purchase 270 Leopard tanks and hold talks on joint work on a new tracked vehicle to meet Italy’s need for around 1,000 vehicles.
Italy had predicted that the Leopard procurement programs would be worth €8 billion ($8.6 billion) and the combat vehicle program would total €15 billion.
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Last year, the Italian parliament approved the purchase of the Leopard, seen as a swift response to NATO demands, as the war in Ukraine puts land warfare back on the map.
KNDS broke off negotiations after Leonardo wanted to add its own systems to the Leopard. Frank Haun, CEO of KNDS, argued that this would damage the company’s reputation for selling a standardized version of the tank to 18 customers.
KNDS is a consortium of the German Krauss-Maffei Wegmann and the French Nexter.
The new deal with Rheinmetall will see the company enter into discussions with Leonardo about an Italian version of the Panther KF51, which is still in the early stages of development and therefore more open to Italian input.
An industry source told Defense News that the ability to integrate Italian systems into the Panther would delay the final procurement, however.
“The Italian tank program was intended to give the Italian army a quick tank to fill in for the arrival of the MGCS. But if Italy switches to the Panther, it could take 10 years to complete the program, and by then the MGCS could already be there,” said the source, who asked not to be named because he was not authorized to speak on the record.
A second source, however, predicted that the Panther will be a base for the MGCS. “That gives Italy an edge over the MGCS,” said the source, who also asked not to be named because he was not authorized to speak on the record.
The talks with Rheinmetall about adopting its Lynx as baseline for the Italian tracked vehicle program will bring to an end the ongoing studies by Leonardo and its Italian partner Iveco Defense Vehicles to choose a European partner for the program. KNDS and BAE Systems were other candidates.
Italy plans to produce 20 prototypes of a new tracked vehicle by 2027 or 2028, with deliveries scheduled to take place between 2029 and 2041.
Hungary has currently signed a contract to purchase the Lynx and last year became a development partner of Rheinmetall for the Panther.
Tom Kington is the Italian correspondent for Defense News.