Following the news that Rheinmetall has opened its Military Vehicle Centre of Excellence (MILVEHCOE) in Australia;

Stelios Kanavakis, Defense Analyst at GlobalData, a leading data and analytics company, offers his view on the inauguration:

“The announcement is a major milestone for Rheinmetall as it establishes an industrial, technological, maintenance and research center in Australia, which will also serve the rest of the Asia-Pacific (APAC) market. MILVEHCOE strengthens the company’s position in the APAC market ahead of the selection of a new tracked infantry fighting vehicle.

“MILVEHCOE is the site where CRV Boxer and high mobility logistics trucks will be produced. It will also support the manufacturing of vehicle turrets such as the Lance, of armor, electronics, EO/IR, weapons and others. As a hub, it will be used to export armored vehicles, trucks and systems to regional and global customers. A first export contract includes the Lance turret for Hungary’s KF41 IFVs.

“Rheinmetall will benefit from the opening of the factory, as it will be able to penetrate new markets in the region and provide growth to the group. According to the company’s half year results, the overall group sales dropped by 7.7% to US$3.09bn due to the decline of the automotive market. However, defense sales rose by 19% to US$1.95bn. That is attributed to the recent contracts from Bundeswehr for trucks with a total value of US$2.8bn; ammunition exports and the Marder upgrade among others.

“Moreover, its portfolio includes a variety of wheeled and tracked platforms, such as the HX-trucks, Fuchs APC, Lynx IFV, as well as the participation in the Leopard 2 and Puma programs. These solutions cover a wide set of customer requirements, from light expeditionary to heavy armored forces.

“However, competition in the Australian market for the new IFV will be intense. The other bidder, Hanwha Defense, has recently won the contract for the new self-propelled howitzers, which will be locally produced. Albeit local production is a requirement, the established production line and cooperation with the local suppliers will support Hanwha’s bid by making it competitive against Rheinmetall.”