VBAE’s light armored vehicle research contract could encourage industry consolidation

The French army has an urgent need of a new light armored vehicle to replace its 40-year old Vehicule Blindé Léger (VBL), and has decided to develop it as an international program with Belgian companies, so sowing the seeds for the possible consolidation of the small AFV market niche. (French army photo)

PARIS — Arquus and Nexter, French vehicle builders, have signed a contract worth €15 million ($16 million) to conduct a “pre-design” study for a light armored vehicle, dubbed Véhicule Blindé d’Aide à l’Engagement (VBAE), a European procurement agency, OCCAR, said in a Dec. 6 statement.

“VBAE Program covers the preparation and definition phase anticipating further development, production and ISS (in service support) contract in the near future,” the agency said. “The overall value of this first phase is 15M€ and it will last approximately two years.”

John Cockerill Defense (JCD), a Belgian company, will be a major subcontractor.

Nexter is the French partner in KNDS, a 50/50 joint venture held by the French state and the privately held German company Krauss-Maffei Wegmann. The Bode-Wegmann family controls KMW. France holds a golden share in Nexter to protect the most sensitive assets, to maintain national sovereignty.

The Organisation for Joint Armament Cooperation (OCCAR) said it was signing for France and Belgium, the partner nations backing the VBAE project, due to deliver in 2030.

“The VBAE Program stems from the need of the French and Belgian armies for a modern, innovative light armored vehicle, fully integrated into the battlefield information system and offering a high added value in terms of reconnaissance and combat,” the agency said.

The planned vehicle will be versatile and suitable for a variety of missions, Arquus and Nexter said Dec. 6 in a joint statement.

“A strong emphasis will be placed on essential performances of mobility, stealth, protection, and fire function,” the companies said. “It will combine compactness and optimized payload capacity.”

Arquus is lead contractor, Nexter co-contractor, and they will subcontract activities to the Belgian partner, John Cockerill Defense (JCD), the French partner companies said.

“This partnership, initiated from the pre-design phase, marks the desire for Franco-Belgian industrial cooperation on a major armaments program,” the French companies said.

The new vehicle will replace the Véhicule Blindé Leger (VBL) scout car and will boost reconnaissance, and command and control capabilities for the Belgian army, the companies said.

Arquus and Nexter are partners in the Future highly mobile Augmented Armoured Systems (FAMOUS) project backed by the European Defense Industrial Development Program, and FAMOUS 2, two projects supported by the European Defense Fund, in a European Union technology drive for future vehicles, including light armored vehicles and heavy tanks.

John Cockerill Defense is a member of the FAMOUS consortium, OCCAR said, and the three companies can draw on research from the FAMOUS studies for the VBAE project.

The EU has set a total budget of €122.5 million for the FAMOUS 2 two-year project, with a maximum EU contribution of €95 million.

The launch of the VBAE project marked an “ambitious and innovative cooperation,” the French companies said.

The architecture study is “indispensable,” an industry executive said, preparing the ground for the development phase.

The study brings in John Cockerill Defense as a subcontractor, but a larger industrial role is likely later on, when the program gets under way in development and production, the executive said.

The French army has operated the VBL since 1990, after Panhard developed a light vehicle in the 1980s and beat an offer from the Renault RVI unit in a two-way competition.

The Scarabée light armored vehicle designed by France’s Arquus is one of the possible candidates for the VBAE next-generation light armored vehicle. (Arquus photo)

Talk of merger and acquisition

Two French specialist sources pointed up the possibility of a merger of the Belgian company JCD with Arquus, the French subsidiary of Volvo, the Swedish truck manufacturer. uch a merger is seen as defensive, as both John Cockerill, also known as CMI, and Arquus are seen to be struggling to win sales and boost their order books.

There is a natural fit, with John Cockerill specializing in guns and turrets, while Arquus builds chassis and platforms, a specialist source said. Both companies work on light and medium armored vehicles.

“It’s not idiotic,” the source said. A second source said JCD has factories in France, which makes it more acceptable as a merger partner.

JCD’s two French factories, Distroff – which builds cannon barrels – and Guénange, are both in the north, close to the border with Belgium. The Aubange factory in southern Belgium, builds parts and turrets, and assembles vehicles.

Although JCD’s initial stake in VBAE is subcontractor on the studies, the company is expected to win industrial work once the program contract is signed and development and production get under way.

La Lettre, a French newsletter, reported that JCD was in “advanced talks” with Volvo on an offer for Arquus, which is a rebranding and relaunch of Renault Trucks Defense (RTD) and other military vehicles.

The parent company Volvo cancelled in 2017 a sale of its Volvo Group Governmental Sales unit, which included Acmat, Mack Defense, Panhard, RTD, and Volvo Defense. That open tender had attracted rival offers from the Belgian company CMI and KNDS, reported to have been in the region of €300 million-€400 million.

Volvo had expected €500 million-€700 million, and the Swedish company took the military business off the market. Rothschild acted as adviser on that planned sale.

RTD and other company names, including Panhard, were rebranded as Arquus after Volvo relaunched the business unit, which is active in the military market, while the parent company focuses on the commercial truck sector.

The valuation of Arquus is thought to have fallen sharply since Volvo took the business off the market, with a declining order book, which drags the asking price down, the sources said.

Arquus has relied on the French army Scorpion modernization program and service support, while striving to win foreign orders. Sales to foreign clients accounted for some 25 percent of 2021 revenue, with the rest from France. Arquus has aimed to hit a 50/50 target of export and domestic sales.

Generally, sales of French-built vehicles have been slow, and commercial success has been mainly in orders for Caesar truck-mounted artillery and 155mm ammunition, an industry source said.

Industry has long waited for the French Direction Générale de l’Armement procurement office to launch a competition for a fleet of army trucks, worth some €3 billion, with a fuel truck among the support vehicles to be delivered.

But the DGA has yet to launch that tender, which is expected to attract bids from a Dutch company, DAF, German company Mercedes, Italian builder Iveco, and Rheinmetall Man of Germany.

Architecture study

The two-year VBAE contract refers to studies on the architecture and concept of the new vehicle, which will be shipped in various versions, industrial sources said.

The studies will look for the best compromise for a vehicle of seven or eight tonnes – not exceeding 10 tons – with the right level of ballistic protection, payload, and mobility, an industrial source said.

That compares to the four-ton VBL, of which Arquus offers an upgraded MK3 Ultima version. The French army has a fleet of some 1,600 VBL, which carries a three-strong crew, and accompanies the Leclerc tank.

On power source, Arquus has invested own funds in developing its Scarabée hybrid diesel-electric armored vehicle, aimed for the VBAE program.

The VBAE will go beyond just the VBL, one source said, with the project looking to deliver two key combat versions, namely a tank-killer turret armed with the medium-range Akeron MMP missile, and a fire-support model with a 25mm or 30mm cannon.

The 25mm caliber is a Nato standard and is to be found in the U.S. army and marines on the Stryker and Bradley armored vehicles, the source said. The Italian forces also use a 25mm gun, built by Leonardo Oto Melara, and the French army’s VBCI infantry fighting vehicle also uses the 25 mm gun, which was developed by Nexter on own funds.

A feature in the VBAE’s key reconnaissance mission will be an aerial drone and a small robot land vehicle.

Production targets

The French government gazette shows 180 VBAE are due to be delivered by the end of 2030, with a further 1,440 units shipped by the end of 2035. That is in an annex report to the 2024-2030 military budget law.

Those are “targets,” an executive said, with delivery depending on the government of the day respecting the annual spending set in the multi-year defense budget, which was voted in parliament in July this year.

The first delivery in the VBAE program was previously expected in 2027, slipped to 2028, and then pushed back to 2030, with the bulk of shipments now expected in the mid-2030s.

The VBAE was backed by the previous defense minister, Florence Parly, who saw the vehicle as essentially a European project, drawing on technology from the EU FAMOUS research projects, a source said.

Belgium is partner nation on the VBAE study, and is expected to order some 300 units.The VBAE is seen as an extension of Belgium’s order for vehicles in the French Scorpion program through its Capacité Motorisée (CaMo) program. Belgium has ordered the key Scorpion vehicles, namely the Jaguar combat reconnaissance vehicle and Griffon multirole troop carrier, and the SIC digital command and control network.

Those are key elements designed and built in France, which has also ordered the Serval light armored troop carrier.

The VBAE project is open to European partners, but it remains to be seen whether other nations will sign up.

Soframe, a unit of the privately owned Lohr company, said in February 2021 it was offering its Mission Observation Surveillance Acquisition Investigation Combat (MOSAIC) concept for the VBAE project. The concept came in three main versions, namely reconnaissance and intelligence gathering, direct fire, and transport vehicle for the MMP missile team, the company said. Soframe offered a diesel-electric hybrid vehicle, which could be remote controlled without a crew onboard. The MOSAIC concept took into account export potential.

The French authorities did not take up Soframe’s offer, and although the company did not build a prototype, that concept may not have been buried.

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