ROME — Rheinmetall and Leonardo have announced that they will deliver a new infantry fighting vehicle to the Italian army within two years and a new main battle tank within three years. This announcement marks the establishment of a joint venture between the two companies.

The venture, called Leonardo Rheinmetall Military Vehicles (LRMV), will be a 50-50 partnership, with its headquarters in Rome and operational offices located in La Spezia, Italy’s hub for ground vehicle manufacturing.

This joint venture aims to meet the Italian army’s needs for modern combat vehicles, with Leonardo handling 50% of the work, Rheinmetall in Germany taking 40%, and the remaining 10% coming from Rheinmetall’s Italian facilities.

Described as a “new European nucleus for the development and production of military combat vehicles,” this collaboration stems from a memorandum of understanding signed in July. It follows the breakdown of previous plans involving Leonardo and KNDS, as the Franco-German consortium hesitated to accommodate Leonardo’s workshare requests.

At a press conference in Rome, Leonardo CEO Roberto Cingolani emphasized the necessity for European companies to unite and lead governments toward industrial integration, even if it means sacrificing a bit of their domestic market. “We hope this partnership will be a stepping stone for a safer Europe,” he stated.

Rheinmetall CEO Armin Papperger added that the negotiations were completed in just 3-4 months, reflecting a rapid agreement.

The deal entails the production of 1,050 new infantry fighting vehicles for the Italian army, based on the Rheinmetall Lynx, set to replace the aging Dardo vehicles. With plans for 16 different versions, the first vehicle is expected to be delivered in two years. This ambitious program is projected to cost €15 billion ($16.4 billion) and run until 2040.

Additionally, Rheinmetall’s upcoming Panther KF51 will be the foundation for a new main battle tank, which will replace Italy’s Ariete tanks. The agreement includes supplying 132 tanks as part of an €8 billion program running until 2035, with the first tank anticipated in about two to three years. Papperger mentioned that a 130mm gun could be available within three years if the Italian government requests it.

When asked why Leonardo ended discussions with KNDS about supplying the Italian army with the Leopard, Cingolani explained that KNDS could only commit to delivering the first tank in five years.

In their statement, the companies noted that Leonardo will be responsible for the mission systems, electronic suites, and weapons for the vehicles destined for the Italian army.

Papperger shared that a brief discussion with Cingolani about combining Rheinmetall’s platforms with Leonardo’s digital capabilities quickly led to the partnership. “The compatibility with Rheinmetall was immediately apparent,” Cingolani remarked.

Cingolani believes that these new vehicles will likely be among the most advanced in the world, noting their export potential. “While we primarily focus on the Italian market, we also aim to assist partner nations looking to modernize their combat systems,” he said, highlighting that many of the world’s 5,000 main battle tanks are over 35 years old.

He further predicted that the joint venture could generate annual revenues between €2 billion and €4 billion, with a profitability margin around 15%.

Cingolani indicated that networking these new vehicles will open up further business opportunities. “These machines will communicate with satellites, supercomputers, and other platforms, allowing us to develop and integrate new technologies,” he added.

Papperger confirmed that this partnership with Leonardo will not affect Rheinmetall’s commitment to developing a new European tank with KNDS, which is expected to be ready by 2040. “Given the current global conflicts, there is an urgent need for infantry fighting vehicles and tanks in the next decade,” he stated. He reassured that the European tank program “is a separate initiative and remains very much alive.”

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