Iveco’s Defence Arm IDV in Line for a Slice of Italy’s Massive Combat Vehicles Contract

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Rome: Italian vehicle builder Iveco has signed up for a slice of the massive contract run by Italy’s Leonardo and Germany’s Rheinmetall to build fighting vehicles and tanks for the Italian army.

After signing a preliminary agreement with Leonardo, Iveco said its defence arm IDV would be in line for between 12% and 15% of the development and production work on the deal, which has been valued at €23 billion, or $24 billion.

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In a statement Iveco said it would be looking to offer its capabilities in “advanced propulsion and drivetrain systems to highly specialised protection technologies.” Leonardo and Rheinmetall said last month they were forming a 50-50 joint venture to build 1,050 new infantry fighting vehicles for the Italian army based on the Rheinmetall Lynx with the first vehicle delivered in two years.

Rheinmetall’s under-development Panther KF51 will be the basis of a new main battle tank to replace Italy’s Ariete tanks, with 132 to be supplied and the first tank to be delivered in two and a half to three years.

Leonardo has said it will be responsible for mission systems, electronics suites and weapons on the vehicles.

The Leonardo-Rheinmetall tie-up was hatched after Leonardo’s talks to team with KNDS to build Leopard tanks for the Italian army broke down, with the French-German group citing design disagreements and Leonardo claiming KNDS’s delivery schedule was too slow.

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The inclusion of IDV in the Italian contract comes after the firm appeared to be left out of proceedings, even though Iveco has long worked on military vehicles with Leonardo through a joint venture known as CIO. Before the Rheinmetall alliance was announced this year, the Italian army had asked CIO to draw up proposals for the new fighting vehicle, but the initiative became redundant when Rheinmetall’s Lynx was picked as the baseline.

Leonardo has reportedly been in talks to buy IDV, but the new deal to bring it on board as a supplier to its JV with Rheinmetall may have ruled that out.

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