Opportunities for European collaboration in armoured vehicles

13 Pages·2017·0.97 MB·English

Opportunities for
European collaboration
in armoured vehicles
Marta Kepe, Julia Muravska, Richard Flint,
Lucia Retter, Antonia Ward, Nathan Ryan
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Cover image: NATO North Atlantic Treaty Organization (CC BY-NC-ND 2.0)
11
Project objectives and approach vehicles as well as mine-resistant and
ambush-protected armoured vehicles
RAND Europe was commissioned by the (MRAPs).
European Defence Agency (EDA) in October
In order to identify the potential collaboration
2017 to conduct a study on collaborative
opportunities, RAND Europe performed a
opportunities relating to armoured vehicles
high-level overview of supply and demand
among participating Member States (pMS)
elements related to current and future trends
of the EDA and partner countries.1 The
in armoured vehicle servicing, research and
overarching goal was to support the EDA’s work
development (R&D) and procurement (see
in identifying new collaboration opportunities
Figure 1), while respecting the fact that
throughout the full life-cycle of armoured
armoured vehicle choice is impacted by such
vehicles (excluding main battle tanks – MBTs).
factors as the potential adversary profile,
This study constitutes part of a wider EDA
intended mission set, deployability and terrain,
effort to develop European defence capabilities
as well as other political and strategic factors.
and promote armaments cooperation.
The study considered three categories of
Overview of the
armoured vehicles:
methodologies used
• Armoured tracked vehicles: Tracked
vehicles (excluding MBTs) configured for During the study, RAND Europe employed
any mission module. a selection of methodologies that included
literature review, questionnaire design, an
• Armoured wheeled vehicles: Wheeled
expert workshop with the participation of the
6x6 and 8x8 vehicles configured for any
EDA pMS representatives and the development
mission module.
of cost models, as shown in Figure 2.
• Protected transport vehicles: A
combination of lighter 4x4 armoured
Figure 1: Key supply and demand factors
Current European fleets
European equipment programmes
European equipment plans
SUPPLY
DEMAND
Key manufacturers
Key system suppliers
Key defence industry consolidation trends
Key technology developments
SOURCE: RAND Europe
1 The study considered EDA partner countries Norway, Serbia and Switzerland, following the EDA’s recommendation.
2 Opportunities for European collaboration in armoured vehicles
Figure 2: Overview of methodologies used during the study
Overview of European armoured
vehicles landscape
Overview of Overview of key demand trends and fleets
non-European Cost model
armoured vehicles development
Overview of key industrial suppliers
landscape
Literature review
Literature Cost model
Collaborative Database update
review design
Government questionnaire design
Industry questionnaire design
METHODOLOGY
SOURCE: RAND Europe
Study context security guarantees and assistance, along
with concerns about the political cohesiveness
Europe is experiencing an increase in of the EU and NATO, incentivise investing in
investment in land capabilities after more national capabilities. Lastly the change in
than a decade of limited spending in this defence-budget trends comes at a time when
area. The overall growth in defence spending the military capabilities of many European
in Europe has been influenced by economic countries have been reduced. This resulted
and security factors. The economic situation from force posture trends in post-Cold War
in Europe and globally has been improving Europe that predominantly focused on out-of-
since the 2008 Eurozone crisis. At the same area operations rather than territorial defence.
time, the rise of immediate security threats Force readiness and the number of personnel
to the east and south of Europe, involvement was reduced and capabilities downscaled
in conflicts in the Middle East, the increasing due to the perception of peace dividend, while
blurring of the divide between internal and reallocating some of the defence funding to
external security threats – which have been other areas of the economy was inspired by the
exacerbated by terrorist attacks and migration potentially resulting economic benefits.
– as well as a decrease in global stability
The EU Global Strategy stipulates the
has resulted in the perception that there
continued need to develop full-spectrum land
is a need to strengthen European security.
capabilities, reiterating the importance of
Furthermore, increasing uncertainty about
defence collaboration through the development
the ability to rely on non-European allies for
of the Permanent Structured Cooperation
3
Figure 3: Comparison of EDA pMS and partner countries’ armoured vehicle fleets with top ten glob-
al armoured vehicle fleet holders (# of vehicles)
76,740
38,266
31,052
28,960
10,354
6,375 5,560
3,997 3,596 3,092 3,067
EDA pMS Russia US India China Egypt Saudi Republic Singapore Democratic United
and partner Arabia of Korea People’s Arab
countries Republic Emirates
of Korea
SOURCE: RAND Europe analysis of IISS data
on security and defence (PESCO).2 PESCO Main findings
provides a mechanism for the EU member
states to develop and deploy defence The EDA member states and partner
capabilities jointly. On 6 March 2018, the countries hold a significant part of global
armoured vehicle fleets
European Council approved the first set
of 17 projects under PESCO, with Italy-led
The EDA participating member states (pMS)
collaborative development of an armoured
and partner countries’ combined fleet of
vehicle family amongst them.3 Although the
armoured vehicles is second in quantity only
results of this endeavour remain to be seen,
to that of Russia and slightly exceeds the
this development provides an encouraging
combined US fleet (see Figure 3). At the same
indication of member states’ intent and interest
time, the EDA pMS and partner countries
to cooperate in the area of land capabilities.
form a substantial region in terms of the
overall defence expenditure, accounting
for approximately 16 per cent of the overall
defence spending in 2017.4
2 Council of the EU. 2018. Council Decision Establishing the List of Projects to be Developed under PESCO. 1 March. As
of 6 May 2018: http://data.consilium.europa.eu/doc/document/ST-6393-2018-INIT/en/pdf
3 This project has been joined by Greece and Slovakia.
4 IISS. 2018. The Military Balance. International Institute for Strategic Studies.
4 Opportunities for European collaboration in armoured vehicles
Figure 4: EDA pMS and partner countries’ armoured vehicle fleet, by vehicle type
31%
Armoured tracked vehicles
45%
Armoured wheeled vehicles
Protected transport vehicles
24%
SOURCE: RAND Europe analysis of open-source data
The current landscape of European countries that own the same vehicle families
armoured vehicle fleets reveals a large in all three vehicle categories. These broad
number of vehicle families, while also parameters coincide with an overcapacity
illustrating considerable degree of overlap within the European defence industry relative
to the size of the European market and the lack
Against the background of increasing defence
of industrial cooperation, consolidation and
spending in Europe (3.6 per cent in real terms
supply-chain integration.
in 20175), the last five years have seen a
number of EDA pMS focus on enhancing their
The European armoured vehicle
land capabilities, investing in armoured vehicle
supply landscape is characterised by
procurement, upgrade, and, to a lesser extent,
fragmentation and overcapacity
development. According to the open-source
analysis performed as part of this study, the The study team has identified a total of
timelines and requirements of a number of 18 armoured vehicle manufacturers in the
these initiatives are broadly aligned. reviewed European countries (see Table
1), although only 16 have vehicles in serial
Despite this, there is a considerable degree of
production or have preserved serial production
fragmentation in the armoured vehicle holdings
capabilities.7 Among these, eight companies
of EDA pMS – of approximately 37,000 vehicles
export to international markets (outside of the
in total, there are up to 47 different families of
EDA pMS and partner countries), meaning that
tracked vehicles6 and over 35 different families
the majority of the manufacturers are focused
of wheeled vehicles. At the same time, there is
on domestic and to a lesser extent, regional,
also a considerable degree of overlap among
5 IISS. 2018. The Military Balance. International Institute for Strategic Studies.
6 Includes tracked vehicles in roles that include bridge-laying, engineering and other specialist roles.
7 Despite their merger, Krauss-Maffei Wegmann and Nexter are presented separately for greater granularity.
5
Table 1: Examples of armoured vehicle manufacturers in EDA pMS and partner countries
Manufacturer Category of vehicles Manufacturer Category of vehicles
AMZ Kutno Wheeled, protected Nexter (KNDS) Tracked, wheeled,
protected
BAE Systems Tracked, wheeled, Rheinmetall Defence Tracked, wheeled
protected
Bumar Labedy Tracked Patria Wheeled
Gamma Tech. Corp Wheeled, protected Romarm Tracked, wheeled,
protected
GDELS Tracked, wheeled, Rosomak SA Wheeled, protected
protected
Huta Stalowa Wola Tracked, wheeled Supacat Wheeled, protected
Iveco Tracked, wheeled, VGGS (ACMAT, Panhard, Wheeled, protected
protected Renault Trucks)
KMW (KNDS) Tracked, wheeled, Yugoimport-SDPR Tracked, wheeled,
protected protected
MSM Group Wheeled Zetor Engineering Tracked, wheeled,
protected
SOURCE: RAND Europe analysis
markets. It is also important to highlight the which is a difficult undertaking considering
transatlantic industrial links of the European Europe’s relatively limited defence budget
armoured vehicle suppliers. Specifically, while size. This saturation has already led to a
General Dynamics European Land Systems major step towards industrial consolidation
(GDELS) has its production in Europe, it is (e.g. the merger of KMW and Nexter in 2016).
in fact the result of the US-based General Although the planned divestiture of the Volvo
Dynamics acquisition of a series of European Governmental Sales was aborted in late 2017,
armoured vehicle manufacturers. Similarly, it illustrated the existence of a rationale and
while BAE Systems is a UK-headquartered an appetite for further consolidation among
original equipment manufacturer (OEM), its manufacturers. European manufacturers
production line for the M113 is in the United already cooperate on the design and
States, and it was created as a result of BAE’s manufacture of vehicles, although cooperation
acquisition of the US-based FMC Corporation in between national players remains more
2005, which designed and originally produced widespread. At the same time, while nationally
the vehicle. based supplier links are dominant, there is
some cross-border supply-chain integration.
Thus, EDA pMS have twice the number of
armoured vehicle manufacturers than the
US, and face the need to focus on export
markets in order to sustain their revenue,
6 Opportunities for European collaboration in armoured vehicles
There is a balanced interest in all three have current plans for the procurement of
vehicle types, with slightly higher level of armoured tracked personnel carriers, six
interest in tracked armoured vehicles countries are to procure armoured recovery
vehicles and five countries have plans to buy
The overview of European demand-and-
infantry fighting vehicles (IFVs) and armoured
supply programmes and plans shows that
engineering vehicles.8
there is currently a balanced interest in the
procurement of the three vehicle categories Notable development activity may be observed
considered in the study, with 19 current in this vehicle category aimed at both the
procurement programmes and future European and the export market. Examples
procurement plans identified for wheeled include the development of the ASCOD 2 by
armoured vehicles and 17 each for the GDELS in 2013, the Puma IFV by the German-
categories of tracked armoured vehicles and based PSM Group in 2014, the Lynx IFV by
protected transport vehicles. The trend of Rheinmetall in 2016, the Borsuk amphibious
replacing tracked vehicle fleets with wheeled tracked vehicle by Poland’s Huta Stalowa Wola
vehicles, which started in the late 1990s, is no and the DCL Renove armoured recovery vehicle
longer clear-cut, as the change in the strategic by Nexter (initial operational capability planned
environment in Europe has heightened in 2020).
governments’ demand for the superior level
Armoured wheeled vehicles: This is the
of protection combined with firepower that
second-largest category of vehicles present
tracked vehicles offer in comparison to
in Europe (see Figure 4) and the focus of
wheeled vehicles. Industry has reacted to this
the most activity with regard to current and
demand signal.
planned procurement plans. Fifteen countries
Significant modernisation, upgrade and have programmes or plans to buy armoured
procurement activities may be observed in the personnel carriers (APCs), six to buy IFVs, five
tracked and wheeled vehicle categories, while to buy armoured recovery vehicles and four to
the ongoing and planned activities in protected buy armoured engineering vehicles. Although
transport vehicles are focused on procurement. some R&D activities have also been identified,
In particular: this category shows fewer modernisation
and upgrade plans and programmes, possibly
Armoured tracked vehicles: Considering the
because some of the most widely used
large European holdings of armoured tracked
vehicles in this category are either relatively
vehicles (42 per cent of the total European
new or belong to the Russian/Soviet-made
armoured vehicle fleet), and the fact that this
BTR vehicle family that may be up for
category of vehicles has the highest number
replacement with Western platforms, or whose
of different vehicle families (approx. 47) and
modernisation and upgrade by the original
a large number of aged vehicles (e.g. BMP
manufacturer would not be feasible due to
and M113), a number of European countries
political concerns.
are implementing programmes aimed at
modernising and upgrading older platforms While there has been notable export activity in
(e.g. BV-206, CV-90, M113 and BMP-1). this vehicle category, both within and beyond
Furthermore, at least eight European countries Europe, some R&D activity has also been
highlighted. Examples include the development
8 Here and elsewhere in the document: RAND Europe analysis of CODABA and open-source information.
7
of the Rosomak 2 (Poland’s version of the owner – France. Furthermore, the vehicles in
Patria) and GDELS’ recently completed this category are comparatively newer than
development of the Piranha V as the future those in the other categories.10 At the same
8x8 AIFV9 of the Spanish Army. Although this time, there appears to be increasing interest in
vehicle segment is characterised by a relatively the procurement of these vehicles. Seventeen
higher level of industrial fragmentation, some European countries have current programmes
industrial integration is occurring. For example, or future plans for the procurement of
Rheinmetall is collaborating with the Romanian protected transport vehicles: eight countries
ROMARM in order to jointly develop and have programmes or plans to buy armoured
produce an 8x8 wheeled vehicle, which will utility vehicles, and seven are interested in the
incorporate elements of both the Rheinmetall- procurement of protected patrol vehicles and
KMW Boxer and the Romanian Saur. reconnaissance vehicles. Although overlapping
R&D programmes were not identified, it
Protected transport vehicles: This category
was observed that both the UK and Italy are
is smaller in terms of share of the overall
interested in vehicle development in this
European fleet (24 per cent), and has fewer
category.
identified current and planned activities in
upgrade, modernisation, procurement and Table 2 shows a summary of the identified
development. In addition, this category is indicative levels of current and planned activity
characterised by one very dominant fleet in each vehicle category.
Table 2: Summary of European armoured vehicle landscape
Tracked armoured Wheeled armoured Protected transport
Factors
vehicles vehicles vehicles
Modernisation and Significant current and Some current and
N/A
upgrade planned activity planned activity
Significant current and Significant current and Significant current and
Procurement
planned activity planned activity planned activity
Significant R&D activity Some R&D activities Low level of R&D
R&D
present identified activities
Additional collaboration Potential for cooperation Potential for cooperation Potential for cooperation
possibilities (to those in divestment of aged/ in divestment of aged/ in storage of unused
identified in the study) obsolete platforms obsolete platforms mine-resistant vehicles
Heightened government
Continued government Continued government
interest in last five
Overall trend in Europe interest, significant interest, competitive
years, future investment
expert activity expected supplier landscape
expected
SOURCE: RAND Europe analysis
9 Armoured infantry fighting vehicle.
10 However, vehicles in this family – particularly mine-resistant vehicles – generally have a shorter lifespan.
8 Opportunities for European collaboration in armoured vehicles
A number of demand and supply factors country on factors shaping the armoured
may lead to increased collaboration in vehicle requirement, such as the potential
armoured vehicles in Europe adversary, mission set, deployability and
terrain, as well as any political and economic
European tracked, armoured and protected
considerations. Collaborative approaches
transport vehicle fleets are fragmented, with
to maintenance, repair and overhaul (MRO)
numerous vehicle families observable for
would need to take account of differences
each vehicle category. However, EDA pMS and
in maintenance and repair philosophies and
partner nations also have a number of vehicle
timelines.
types in common, including ageing platforms
that are being, or are soon to be, replaced. The project team identified a non-exhaustive
list of factors that may be relevant to the
Notwithstanding these observations, any future
potential for future collaboration in armoured
collaborative activities on joint procurement,
vehicle maintenance, repair, overhaul and
R&D and upgrade would need to consider the
upgrades, as well as R&D and procurement.
potentially differing views of each participating
They are listed in Table 3.
Table 3: High-level summary of key factors that may influence potential collaboration in armoured
vehicles
Demand factors Supply factors
Shared overall defence and security threats that 18 armoured vehicle manufacturers currently exist
fall into two groups: concern about conventional in Europe, with 16 of them having vehicles in serial
conflict and concern about hybrid and domestic production, indicating over-capacity in the supplier
security threats base
Most of the armoured vehicle families are Some industrial consolidation has occurred, paving
currently present in the fleets of two or more the way for further industrial integration, although
European countries cross-border mergers remain challenging
Groups of countries with broadly aligned vehicle European armoured vehicle manufacturers have
procurement plans and programmes have experience in collaboration and cross-border
emerged supply-chain integration, although nationally-based
suppliers links remain dominant
A number of European countries own large European original equipment manufacturers (OEMs)
fleets of older generation vehicles that will need have shown flexibility in responding to the evolving
upgrade/replacement requirements of European (and global) armed forces
Some collaboration formats (e.g. via the EDA,
NATO and OCCAR (Organisation for Joint
Armament Cooperation), as well as bilateral
cooperation) are in place
SOURCE: RAND Europe analysis