Italy’s Leonardo, Germany’s Rheinmetall forge joint venture

Leonardo and Rheinmetall are set to transform Italy's armored capabilities with a new joint venture aimed at delivering advanced Panther tanks and Lynx tracked fighting vehicles.

Italian army generals can look forward to receiving new tanks and tracked fighting vehicles within three years, following an anticipated contract signing with Leonardo and Rheinmetall by the end of the year, according to Leonardo’s CEO, Roberto Cingolani, Caliber.Az reports citing the foreign media.

In an interview with Defense News, Cingolani hinted that the tanks’ guns might be produced in Italy and noted that the final product could potentially be part of Europe’s future Main Ground Combat System (MGCS) program. He also did not rule out the possibility of Leonardo collaborating with the Franco-German consortium KNDS in the future to form a European-wide land defense group, despite the recent collapse of collaboration talks.

Drawing inspiration from the success of the European missile manufacturer MBDA, Cingolani expressed optimism about a collaborative effort involving France, Germany, and Italy to develop a world-class tank capable of competing in global markets.

Leonardo and Rheinmetall have agreed to initiate talks on establishing a joint venture to produce Rheinmetall’s Panther tanks and Lynx tracked fighting vehicles for the Italian army, following the breakdown of negotiations with KNDS regarding Leopard tanks.

Roberto Cingolani, Leonardo's CEO, stated that the new joint venture is expected to be operational by September, with contracts anticipated to be finalized with the Italian Ministry of Defense by the end of the year. The first Lynx vehicles are projected to be delivered within 2-3 years, while the Panthers will follow in three years.

“We will expedite the process as much as possible because the Italian defense sector is eager to receive the first vehicles,” Cingolani said.

Approximately 40 per cent of the assembly will occur in Germany, with 60 per cent taking place in Italy—50 per cent of which will be handled by Leonardo and 10 per cent by Rheinmetall’s Italian subsidiary.

Cingolani outlined that the workshare involves Rheinmetall providing the chassis, transmission, power systems, and wheels, while Leonardo will focus on the turret and upper part of the vehicles. Weaponization may be contributed by both partners, depending on the specific version.

When asked whether the tank's gun could be manufactured in Italy, Cingolani mentioned, “I expect some components could be produced by both partners. It’s under discussion.”

Reflecting on the unsuccessful negotiations with KNDS, which fell apart due to Italian demands for integrating Leonardo systems into the Leopard tanks, Cingolani commented, “We tried very hard with KNDS, but it didn’t work.” He explained that negotiations, which spanned from December 2023 to June, were stymied by Leonardo’s need for a 50-50 workshare. “We wanted a substantial role, and with the current version of the Leopard, there was no room for Leonardo to contribute. Altering everything would have been too lengthy and complex.”

Additionally, Cingolani noted that a significant aspect of the failed Leonardo-KNDS partnership was the intention to involve Italy in the MGCS program, which aims to develop a pan-European tank as negotiated by KNDS.

KNDS, a consortium comprising Germany's Krauss-Maffei Wegmann and France's Nexter, was previously in talks with Leonardo to develop Leopard tanks for Italy. However, these discussions fell through due to disagreements over Leonardo's desired role and system integration.

Looking forward, Cingolani sees potential for Leonardo's new partnership with Rheinmetall to pave the way for involvement in the MGCS program, which aims to develop a future main battle tank. He noted that if the joint venture produces a state-of-the-art and highly competitive Panther tank, it could become a strong contender for the MGCS program. “We need to be open and flexible, and the joint venture could invite other contributions,” Cingolani said.

Regarding whether the Italo-German Panther might compete with or collaborate with KNDS offerings for the MGCS, he commented, “We will see in the future whether it is competition or collaboration.” He also suggested that there might be room for synergy, given the limited market for advanced, complex, and costly military machines.