Italy and Germany join forces to develop next-gen battle tanks

The Italian army currently possesses 200 C1 Ariete tanks and an equal number of VCC-80 Dardo infantry fighting vehicles (IFVs). These vehicles are relatively young, having served for less than 30 years, but have been considered unsuccessful initially. The Ariete, in particular, inherited many flaws from the older Leopard 1, produced in Italy under licence, and despite modernisation, it remains poorly armoured. The Dardo, on the other hand, was designed with limited modernisation potential, and both are relatively few, making their operation uneconomical.

The Italian army decided some time ago to introduce changes in its armament. While the Ariete was to be modernised, the Dardo was to be replaced by a new vehicle. The Dardo replacement programme (as well as replacing some old American M113 vehicles and related vehicles) was named the Nuovo Veicolo Corazzato da Combattimento (NVCC, Eng. New Armoured Combat Vehicle), aiming to acquire 679 new cars, including 350 infantry fighting vehicles (IFVs).

Over time, the programme was scaled down to 570 vehicles, which were to be acquired in two phases, valued at €6 billion. On the other hand, the plan was to keep 125 Ariete tanks (potentially 138 in the future) and eventually (after 2030) replace them with a completely new tank. Initially, the Italians intended to join the German-French MGCS programme, but having been excluded, they unsuccessfully tried to collaborate on a new tank with Spain and Poland. After the outbreak of the war in Ukraine, they returned to talks with Germany, selecting the French-German joint venture KNDS (founded by KMW and Nexter) as a partner.

Negotiations between KNDS and the Italian company Leonardo began in December 2023, with ambitious plans. Rome intended to purchase 132 Leopard 2A8IT main battle tanks (i.e., more than Germany has ordered so far!) and 140 support vehicles (technical support vehicles, engineering vehicles, assault bridges).

The negotiations were broken off in early June. Unofficially, it is said that KNDS did not meet the high expectations of the Italian side regarding the involvement of the Italian defence industry in joint projects.

Perhaps Leonardo foresaw that the negotiations would lead nowhere, as during the Eurosatory exhibition in Paris, Rheinmetall presented a medium tank assembled from the chassis of the Rheinmetall KF41 Lynx infantry fighting vehicle and a light Leonardo HITFACT Mk II tank turret (used for example, on the Centauro II wheeled tank destroyers). Even if the demonstrator was assembled hastily, work must have begun before the negotiations with KNDS were broken.

The official cooperation between Leonardo and Rheinmetall had to wait until July 3, when the presidents and CEOs of both companies signed an agreement to establish a joint venture for developing and producing new combat vehicles. Both parties will contribute equally to the joint venture designated as Lead System Integrator, with approximately 60% of the work done on Italian soil.

The future entity, based in Italy, will primarily focus on the two mentioned programmes, specifically developing and selling the Italian army a new main battle tank and a new infantry fighting vehicle. For the first programme, the starting point will be the KF51 Panther tank, and for the second (currently named Army Armoured Combat System or A2CS), it will be the KF41 Lynx.

Both vehicles will undergo substantial "Italianisation," making them potentially unrecognisable from the original versions. This will involve mission systems, electronic equipment, and weapon integration, which will be supplied by Leonardo according to the client's requirements. Rheinmetall also has three subsidiaries in Italy, which will employ their approximately 1,400 workers in the armoured projects.

It's unknown how many vehicles the Italians will purchase. If the online edition of the German newspaper "Handelsblatt" is to be believed, in 15 years, Rome plans to buy over 200 main battle tanks and at least 350 infantry fighting vehicles, worth even €20 billion. However, these reports seem incomplete. Suppose the tank is a more prospective product than the standard Leopard 2 (including a potentially more giant calibre gun and loitering ammunition, an optional crew member controlling unmanned vehicles). In that case, it will likely also replace the Ariete over time.

This number probably doesn't include support vehicles (possibly around 140). As for the infantry fighting vehicle, the A2CS programme assumed the purchase of around 1,000 vehicles worth approximately €20 billion. Thus, 350 vehicles could mean the first phase of acquisitions. Rheinmetall and Leonardo could expect orders for 1,500 vehicles of all types and variants. Will Rome approach the programme so ambitiously and have the funds to do so? Time will tell, especially since Hungary is already involved in the development of the Panthers.

Returning to Italy, KNDS CEO Frank Haun commented on the broken negotiations, emphasizing that the company remains committed to supporting the Italian army, which could mean that KNDS will try to find another way to sell Leopard 2A8 to Italy.

It is worth recalling that the Leopard 2A8IT programme was supposed to be a ticket for Italy to participate in the European new-generation combat system programme, the Main Ground Combat System (MGCS). Meanwhile, according to Leonardo's press release, the company, together with Rheinmetall, will participate in the European land combat system programme, that is, MGCS, in which Rheinmetall is already cooperating with KNDS.

At the same time, it should be remembered that the company both collaborates and competes with the German-French consortium. It is possible, therefore, that with Leonardo, it will gradually move to a purely competitive position, trying to oust the poorer competition, which has governmental support. It is not out of the question that the Atlas project itself was an attempt to create a competitive solution. If the German-Italian negotiations result in the programme's implementation this time, the consolidation of the European defence industry could take an entirely unexpected turn.