Germany’s Rheinmetall is making the transformation into a pure arms company, and the focus is on business abroad.
According to Jane’s, the integrated technology giant announced an organizational restructuring as part of the company’s strategic realignment on 5 February, in a move that will see the firm reduce its exposure to the automotive market and target greater defense sales.
Under the new ONE Rheinmetall strategy, the company will merge the existing Automotive and Defence units and replace them with five business divisions: Weapon & Ammunition, Electronic Solutions, Vehicle Systems, Sensors & Actuators, and Materials & Trade.
The company’s Pistons business unit will be run as a non-core business, and ultimately divested. The intermediate holding company Rheinmetall AG will be dissolved and integrated into the Group structure, that will be run directly by the company’s executive board.
As Armin Papperger, chief executive of Rheinmetall AG, explains: “We’re giving Rheinmetall a clear and uniform profile. Merging Automotive and Defence opens up a new and important chapter in the history of our company.
“The revamped corporate structure gives all of a chance to widen our technological spectrum and expand our position in global markets. As we see it, we’re thus well positioned to meet our ambitious medium-term goals for sustained growth and high profitability.”
Rheinmetall also revealed some ambitious targets for 2025, including a 10% operating margin on profits across all its business units.
The company is also pursuing sales growth from an estimated €5.8 billion (US$6.9 billion) in 2020 to €8.5 billion by 2025, with a free operating cash flow of 3-5% of sales anticipated.
In an investor presentation on 4 February, the company revealed that revenue splits by 2025 are anticipated to have grown from 63% for defence to 70%.
As part of this growth, the company is pinning its plans on substantial growth in the military vehicles market, with the Puma and Lynx platforms offering a potential €15-40 billion in orders over the next decade, and military trucks also offering a potential €7-8 billion.
The company’s success in Hungary with the Lynx is being set as a benchmark for other potential markets, such as the Australia, the Czech Republic, Slovakia, Slovenia, and the United States.
In September 2020, Rheinmetall announced that the Hungarian Ministry of Defence awarded an order to supply tracked KF41 armored vehicles and related products and services with a total value of more than €2 billion. Hungary is the first export customer of the KF41 IFV.
Hungary plans to purchase 218 KF41 tracked armored IFVs (Infantry Fighting Vehicles) as well as simulators, training and instruction, plus an initial supply of spare parts as well as maintenance support.
The Hungarian KF41 in IFV configuration will be fitted with a manned 30mm cannon Lance turret, also developed and manufactured by Rheinmetall.
Meanwhile, Rheinmetall has unveiled the first of three Lynx KF41 infantry fighting vehicles (IFVs) that will compete in test and evaluation trials with an equal number of Hanwha Defense Redback IFVs for the US$10-$15 billion Australian Army’s Project Land 400 Phase 3, also known as the Mounted Close Combat Capability requirement.
The company said that it is delivering the tracked vehicles as part of a Risk Mitigation Activity (RMA) set to be conducted in Australia over a 12-month period.
The RMA trials will incorporate a range of tests including lethality, mobility, and protection the company stated, adding that the vehicle will also be the focus of blast testing at a dedicated facility in the coming months.
The company said that, if selected, the Lynx fleet will be manufactured in Queensland at Rheinmetall’s new Military Vehicle Centre of Excellence at Redbank, southwest of Brisbane, where the first Lynx vehicle competing for the program was unveiled.
Rheinmetall Defence Australia Managing Director, Gary Stewart, said: “We welcome the Commonwealth’s decision to select Lynx KF41 for the RMA trials and look forward to demonstrating the capability of our next generation infantry fighting vehicle.”
“We believe Lynx is the best vehicle in its class for Australian needs and it sets new standards in protection, mobility, lethality and knowledge needed to survive and defeat any adversary,” Stewart said.
“Rheinmetall has developed this vehicle so it is positioned at an ideal level of maturity when Australia needs it to enter service in 2026 – and it has the inherent growth capacity and a growth path to extend these capabilities through its 40+ year life.”
Project Land 400 Phase 3 will deliver and support up to 450 IFVs and 17 manoeuvre support vehicles to replace the army’s obsolescent M113AS4 armoured personnel carriers, which, although upgraded in recent years, date from the mid-1960s.
The KF41 is a new generation of light tracked armored vehicles fully developed, designed, and manufactured in Germany. The vehicle was unveiled in June 2018 during the defense exhibition Eurosatory in Paris, France.
The KF41 is protected with the latest generation of armor providing ballistic protection against medium caliber weapons and artillery shell splinters and mine protection against mine blast, IEDs (Improvised Explosive Devices), and bomblets.
The armor of the vehicle has been also optimized to protect the vehicle against RPGs (Rocket Propelled Grenades) and anti-tank guided missiles (ATGM). In option, the vehicle can be fitted with APS (Active Protection System).
The design of the KF41 consists of three main parts with the driver position and powerpack at the front, turret in the middle, and troops’ compartment at the rear. The vehicle has a crew of three including a driver, commander, gunner, and can accommodate 8 fully gear infantrymen.
The Lance Turret mounted on the KF41 is armed with one 30mm automatic cannon MK30-2/ABM and one 7.62mm coaxial machine gun. The MK30-2/ABM has a double belt ammunition feed system.
Sources: Jane’s, Army Recognition, EDRonline, Wikipedia, DefPost.com