PARIS ― Emmanuel Levacher is chairman and CEO of Arquus, a company that has undergone a rebranding that included a clutch of French and U.S. military vehicle names including Renault Trucks Defense and Mack.

That relaunch carries Levacher’s hopes to tackle client confusion over a profusion of names, sharpen strategy and bring the 1,200 staff together in a time of stiff competition at home and in the export market.

The effort follows a rethink by the parent company, Swedish truck-maker Volvo, to sell off the governmental sales division and to hold onto the military business with a new name. After all, Arquus is a Latin term for warhorse.

That corporate renewal comes ahead of the Eurosatory trade show, which runs June 11-15.

The company last month changed its name to Arquus. Why rename from Volvo Group Governmental Sales?

One of the reasons is to simplify, make our company more visible. We work with several brands, with the three main brands — Renault Trucks Defense, Panhard and Acmat. And there is Volvo Group and Mack. It’s complicated to explain to clients. It is about putting them all under the same flag.

The second reason is internal and just as important. The aim is to unite the staff, get them all on the same team, wear the same colors. This is important, as the company is the result of various acquisitions. There is also need to refresh the visual identity. There will be a new website, a more digital look. Some brand names were under license, but there was no payment for those.

What does the new name say about the corporate strategy?

There is a new positioning in defense. Along with the logo and brand name, the tagline is “ ” We want to spell out our position in the defense market. “Mobility” is at the heart of our business. “System” spells out we want to be a systems integrator, developer and supplier of certain systems such as remote weapon stations.

Arquus Chairman and CEO Emmanuel Levacher has held his position since June 2015. (Courtesy of Arquus)

We are determined to anchor ourselves in the market segment for light and medium armored vehicles — generally tactical vehicles. That is the heart of our business, that is where we want to stay European leader and develop our offer for the world market. We could have a partner in components or drivelines. The core of our business is light or medium tactical wheeled vehicles.

What were the lessons learned from the failed bid for the contract for the Light VBMR troop carrier, one of the key vehicles in the Army’s Scorpion modernization program?

We are not happy we lost. We think our offer was very good on technology, but we did not win because it was not the lowest price. We did not want to win at any price. We made a reasonable offer, a very good technological offer at a reasonable price. We did not want to win at the price set by our competitor.

We can ask: What can we do to continue to be even more competitive? This segment is our core business, so we have to counterattack, make foreign bids. We cannot depend on the French market. We have a strong product with Fortress, formerly the Bastion High Mobility. This is a highly competitive offering in this segment. There will be a relaunch of the company, vehicles, innovation and service at Eurosatory.

How important is vehicle service for the business?

Service accounts for about a third of annual sales. It is important in terms of client relations. Our aim — in France and abroad — is not just to sell products but to manage the relationship through service throughout the life of the product.

The target is to increase service in the export market. We are highly integrated in service in France but less developed abroad. The target is service to make up a good third of sales. France accounts for more than a third; export less than a third. There will be an Arquus driveline on the Griffon (troop carrier) and Jaguar (reconnaissance and combat vehicle). We will adapt Volvo motors and drivelines to military specifications. There will be about 50 percent commonality of parts on Jaguar and Griffon.

Arquus has three parts on Scorpion: complete driveline on Griffon and Jaguar; three remote weapon stations turrets — T1, T2 and T3; and spares. We are setting up a new logistics platform at Fourchambault, France. Overall, that is about a third of the value of Scorpion. There will be more value on Griffon — which will be lighter armed — and less on Griffon, which is more heavily armed.

What is important about innovation?

We will integrate technology that we develop in a pragmatic way. In electric mobility, there is hybrid electric drivelines, energy management and storage. These are significant research areas we will present at Eurosatory.

Another area is robotization, which includes remote control of vehicles. We have a research project on a remote controlled PVP (light protected vehicle), which allows soldiers to drive the vehicle by remote control.

There is “platooning,” with a convoy of logistics vehicles led a manned vehicle. We are studying civil experiments. We are also working on “trafficability“ — how to read in real time, irregular terrain in combat conditions.

We take civilian off-the-shelf equipment from Volvo and adapt for military use.

What we are aiming to do one day is to put all that together and propose a new architecture. When we manage to put electric power in vehicles, that cuts weight and size of mechanical parts like engines and gearboxes, and frees up space and weight for more protection, weapons and equipment.

There are prototypes or research projects with entry into service is 2025.

Is there support from government funds?

This is company-funded. What the land systems industry would like to see is more access to government research funding. The minister has announced €1 billion (U.S. $1.2 billion) from an innovation fund — why not €100 million for the land systems? And we would get our share. We have some ideas. It is important the industrial sector pitches some ideas to get more government funding.

Perhaps we have to work with small startups. We spend millions of euros. For a company of our size, that is a significant amount.

The European Defence Fund is a good idea, but these are still early days. It is difficult to manage joint programs, but we would like to see a more international, European approach.

How are you applying innovation in services?

At Eurosatory, we will show tele-diagnostic, with connected “smart glasses.” We have clients who use that already. Virtual reality is being used to develop training courses for clients, without the need of real products. There will demonstrations of innovation for service, not just product.

Service allows us to offer support, which we had not planned. We can take on fleet management and service, which allows operator to focus on operations.

Staff recruitment has grown massively. In 2016 and 2017 we recruited about 100 a year. This year, we will recruit 150. That will be about 10 percent of 1,500 total staff. These will mainly be engineers and technicians. It is not easy; the labor market is tight, especially in Paris.

Is France’s 2019-2022 military budget law positive?

The timetable is very positive overall. The effort is significant in a tight budgetary climate. There is a faster delivery and a 50 percent order increase by 2020 on Scorpion. That is more production for us. Also, service was not forgotten, which is good for us.

And there are future programs. There is one program toward the end of the budget law — the renewal of tactical trucks, on which we are well-positioned. We shall see. There is one program not in this budget law but which we expect in the next one — replacement of the VBL reconnaissance vehicle. That is important for us, a core product. We are looking into it. What could be the VBL replacement?

There have been problems on certification of the heavy vehicle for French special forces. Have these been resolved? How about delivery of the light unprotected vehicle based on a Ford four-wheel drive vehicle? That was due to be delivered last year.

There is progress on the special forces vehicle. We are confident. The Mk1 will be delivered by the end of the year. The VT4 light vehicle will be delivered this year.

What is the business outlook? The company previously forecast €700 million in annual sales in 2015.

Today we are around €500 million, a good level. We will continue to grow. There was not enormous growth in 2017. We are aiming to hit sales of €800 million by 2020/2021. This is not just an ambition — this is based on execution of the order book and prospective deals.

In exports, we will offer light trucks but not in very light or low-cost segments. We will have technology to stay attractive, but we will not pitch a very premium, very specific product.

We aim to stay in the midmarket with the Sherpa, VAB Mk3 and Bastion, developed on our own funds. We will be fairly competitive in price, but also offer technology for high-end missions. But there is competition in that market segment, for instance from Turkish companies.

The light-medium segment is one of the most competitive. We have to be able to integrate systems and service, deliver over time, and innovate in mobility. That is how to stay ahead, not just put on some armor on a vehicle. There are South African, Korean, Chinese, Russian, Italian, United Arab Emirates competitors, and perhaps one day from Saudi Arabia.

There are competitors in central Europe and perhaps a future partner. You have to find a local partner, as there are more requests for technology transfer.

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