Rheinmetall has announced it has secured a contract worth €2 billion to supply a NATO member with its newly developed infantry fighting vehicles, with part of the production to take place in Australia.
Hungary has become the first NATO and EU member to procure Germany-based technology firm Rheinmetall’s newly developed Lynx KF41 infantry fighting vehicles, ordering 218 units as part of contractual agreement worth €2 billion (approximately $3.2 billion).
The contract, awarded by the Hungarian Ministry of Defence and signed in Budapest, also includes the provision of nine Buffalo armoured recovery vehicles, and additional products and services such as simulators, training and instruction, an initial supply of spare parts, and maintenance support.
The Lynx infantry fighting vehicles (IFV) will be equipped with a manned 30mm Lance turret, also developed by Rheinmetall.
Rheinmetall has stated that it expects further potential orders to stem from the contract, with the Lynx vehicles requiring spare parts and regular maintenance to “remain operationally ready” over a service life of “several decades”.
Hungary is set to receive 46 Lynx IFVs as well as nine Buffalo armoured recovery vehicles during the first phase of production in Germany, projected to be complete by the start of 2023.
According to Rheinmetall, a majority of the Lance turrets for the first phase of production will be produced and supplied from the Rheinmetall Military Vehicle Centre of Excellence in Brisbane, Australia.
Rheinmetall will then supply an additional 172 Lynx vehicles in the second phase of production in Hungary.
This follows an agreement between the Hungarian government and Rheinmetall in August 2020, to establish a joint venture responsible for creating a Lynx production facility in Hungary, financed by a local company.
Armin Papperger, chairman of the executive board of Rheinmetall AG, commented, “The Lynx’s market breakthrough is a major success for us. And the fact that we were able to convince Hungary – an important EU and NATO partner – to choose this innovative vehicle makes this success all the greater.
“In making this forward-looking procurement decision, Hungary’s top political and military officials have demonstrated real leadership.
“Not only does the move place Hungary at the forefront of European army technology, it reaffirms the Hungarian government’s commitment to being a reliable, more militarily effective partner of its NATO allies, a policy which it is pursuing with systematic energy.”
As part of the agreement with the Hungarian Ministry of Defence, Rheinmetall will hold a majority stake and take the lead in establishing the joint venture company that will produce the Lynx in Hungary as part of the second phase of production.
Accordingly, the Hungarian government will develop a new production facility to cater for the operation.
Rheinmetall stated that the joint venture for the production of the units would ensure that a “substantial share” of the added value deriving from the procurement project takes place in the customer country.
“We greatly appreciate the Hungarian government’s trust in us, which this order implies,” Papperger added.
“Rheinmetall is very proud to be able to make an important contribution to the sustained expansion of Hungary’s defence technology capabilities in co-operation with local industry.
“We look forward to working together with our Hungarian friends and partners, and will do everything in our power to assure the long-term success of this venture.”
The Lynx is currently competing in similar procurement programs in the Czech Republic and in Australia.