The exercise at the Puckapunyal Army Base in Victoria saw the LAND 400 Phase 2 contenders test their weapons.
BAE Systems have put forward the Patria AMV35 and Rheinmetall has proposed the Boxer CRV.
Minister for Defence Industry Christopher Pyne observed the live firing and said the vehicles demonstrated hugely improved capabilities compared to the current Australian Light Armoured Vehicles (ASLAV) fleet.
"Projects like LAND 400 Phase 2 give us the opportunity to modernise our defence capability while creating hundreds of jobs in Australia and boosting domestic manufacturing," Minister Pyne said.
"Both vehicles represent a significant advancement in the protection and capability levels we will provide to our diggers.
"The Rheinmetall Boxer CRV and the BAE Systems Australia Patria AMV35 are armoured fighting vehicles with vastly improved firepower, protection and mobility than our current fleet."
The vehicles are currently undergoing test and evaluation as part of the 12-month risk mitigation activity to help pick a winner.
Minister Pyne said the risk mitigation activity is also looking at ways to maximise Australian industry involvement in LAND 400.
“There has been significant effort put in to increase the opportunities for Australian companies to be a part of LAND 400,” Minister Pyne said
“Defence completed a nationwide series of workshops late last year to provide Australian companies with an opportunity to showcase their capabilities to the shortlisted LAND 400 tenderers.”
LAND 400 Phase 2 is a $4-5 billion project to purchase 225 Combat Reconnaissance Vehicles to replace the Australian Light Armoured Vehicles currently in service with the Australian Army.
The overall cost of the project is expected to be between $14-20 billion for acquisition, making it the biggest ever in the Australian Army's history.