PARIS — The outlook for German foreign arms sales has strengthened, with the government coalition led by Chancellor Angela Merkel pushing to focus on allies in Europe.
“Germany clearly in their coalition paper indicated they wanted a more European approach,” said Frank Haun, co-chairman of KNDS, the joint venture between KMW and Nexter. Haun spoke to Defense News at the Eurosatory trade show for land weapons.
“This is the right path. This means they will find a solution.” Haun is also CEO of Krauss-Maffei Wegmann. Stephane Mayer, CEO of Nexter, is the co-chairman at KNDS.
“The principle is Germany is on the move,” Haun said. “It is not a block. It is a process and it takes time.”
Arms export is a highly sensitive topic in Germany, with strong debate over the use of German weapons by client nations such as Turkey and Saudi Arabia, respectively heavily engaged in Syria and Yemen. A sought-after alignment of French and German arm export policy is key to KNDS. The partner companies, Krauss-Maffei Wegmann and Nexter, have long competed with each other, but now they seek to work cooperatively to snag opportunities in the world market.
There is little public controversy in France on arms export, on which successive governments publish an annual report to parliament, giving details of the deals won in the previous year. French media have asked the Armed Forces Ministry when this year’s report will be released. Clearance of foreign arms deals lies in political hands and once policy is set, then companies can pursue their target markets.
“We are not in charge of external policy of our two countries,” said Mayer. “However we wish that they find an agreement, to make things clear from the beginning on how to export the systems.”
If there is political clearance for sales limited to the European market, then KNDS could focus its efforts. That includes building new factories in Europe, Mayer said. The European market for main battle tanks is worth an estimated €80 billion (U.S. $93 billion) based on an estimated park of 8,000 tanks, worth €10 million per unit, Haun said.
“This is a huge market,” he said, of which KNDS aims to win more than half. “We want at least 50 percent, we want to be market leader.”
The German Leopard tank accounts for 40 percent of the European market, while the French Leclerc holds 3 percent, so KNDS already controls 43 percent. With an operational life of some 40 years, the sale of service and spares for the tanks would be extensive.
East European nations will likely seek to replace Russian tanks, or tanks built on Russian design, so the market potential is seen to be there. KNDS unveiled at Eurosatory its European Main Battle Tank, built by fitting the Leopard 2 chassis with a Leclerc turret and 120 mm gun. That display outside the KNDS outdoor chalet marked the market launch of a cooperative effort aimed solely for foreign armies.
Germany ranks among the top arms sellers, along with Britain and France. The U.S. and Russia lead the rankings. Both French and German governments insist they exercise strict control over the sale of weapons abroad.