Negotiations have ceased between the Franco-German tank manufacturer KNDS and Italian defence prime Leonardo to define a main battle tank (MBT) configuration for the Italian Army.
Leonardo announced the hiatus in a press release on 11 June 2024, that stipulated the company would continue to pursue Italy’s MBT programme, even if that involves “cooperation with other qualified international partners.”
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A strategic alliance was originally established with KNDS in December 2023, to select the Leopard 2A8 to replace Italy’s rapidly ageing MBT fleets, which include more than 700 Leopard 1 and 200 C1 Ariete tanks.
At the time, GlobalData estimated the contract valuation would be worth nearly $1.2bn (€1bn) over the next decade.
What’s the problem?
Leonardo provides a sparing account of the reason for the fall out, citing a need to satisfy Italy’s “present [national] requirements” while “remaining well-positioned for future developments toward the Main Ground Combat System [MGCS].”
MGCS was a Franco-German initiative that launched in 2017. The agreement laid out a standard concept for a series of systems conceived around one single combat vehicle.
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By GlobalDataAn impasse was reached over Leonardo’s attempt to add more of its components to the Italian configuration than the Franco-German prime was prepared to concede.
“Other international partners”
Around the same time as the breakdown in talks, KNDS Germany agreed to expand production responsibilities to a new Norwegian subcontractor named RITEK.
The company will begin to deliver the remaining 37 of the 54 Leopard 2A8 units that the Norwegian Government ordered from the German contractor worth $1.8bn (Nkr19.7bn) at the end of February 2023.
Meanwhile, global suppliers from South Korea may be watching intently as the latest negotiations lay in tatters. Open once again to other ‘international partners’, Leonardo may follow in the footsteps of Poland’s industrial decision to select Hyundai Rotem’s K2 Black Panther.
Norway faced a similar dilemma in early 2023 between the Leopard 2 and the Korean Panther.
Hyundai Rotem may be eager to consolidate its European presence beyond its Polish customer, which purchased 180 Panthers in July 2022.
