New needs and opportunities emerging in the world armoured vehicle industry

The war in Ukraine showed how unprepared the world is for any war. The biggest deficiency was in armoured vehicles and tanks. So to speak, there was an official tank shortage during the war. Because overdeveloped anti-tank weapon technologies caused mass tank losses in wars and tank losses could not be completed in a short time.

The main reason for this was the rapid downsizing of almost all armies after the end of the Cold War and the decrease in the number of tanks and armoured vehicles. In parallel, the factories producing tanks and armoured vehicles either downsized by closing some of their departments or stopped production altogether.

Although Russia and the USA were still producing and using tanks in large numbers, the USA's production capacity had also declined as foreign demand had fallen. On the other hand, countries such as China, South Korea and Turkey, which started to produce tanks or armoured vehicles, were also effective in reducing the production capacity of EU countries, Russia and the USA. These countries not only produced their own tanks or armoured vehicles, but also sold them to other countries, thereby narrowing the market.

Until 2008, no one was really bothered by this situation. This year, Russia's rapid incursion into Georgia with long columns of armoured troops, as often mentioned in Cold War military scenarios, caused uneasiness. However, once Russia took the territory it was aiming for, it stopped and tensions eased.

However, this situation did not last long. The real shock came in 2014 when Russia invaded Crimea with armoured troops. In response, Eastern European states bordering or close to Russia increased their defence spending and started to purchase tanks and armoured vehicles.

Other European countries also talked about increasing their defence budgets and strengthening their armoured units, but these statements were never put into practice. This was because they did not want to give up the increased prosperity after the Cold War as their defence budgets were decreasing.

However, as the war in Ukraine dragged on, many countries started to calculate how to increase the number of tanks. For this purpose, some of them contacted tank producing countries, while others took action to produce their own tanks or to produce new, more advanced models of their existing tanks.

Of course, it was not so easy to do this. Because during the Cold War period, some tank-producing countries had stopped production or reduced capacity by closing some of their production facilities. The same situation was also valid for the USA. In the past, the USA had been a major exporter of tanks and armoured vehicles, but in recent years its market share in Europe and elsewhere had declined considerably.

This was partly due to the fact that excess tanks and armoured vehicles were being given away for free to allied countries in an effort to reduce the Excess Defence Stockpile, where the only thing the end user has to pay for is the cost of transport.

In addition, since recent wars have been fought mainly in urban warfare, armies have relied heavily on light armoured vehicles with rubber tyres. This led to a decrease in the production of tanks and caterpillar armoured vehicles.

However, as Eastern European countries close to Russia assessed the urgent need for tanks and armoured personnel carriers/armoured fighting vehicles after the Ukraine War, demand for US products increased. For example, Poland, in addition to ordering Abrams tanks from the US, also requested IFVs.

Although its share in foreign markets has decreased recently, the US, which has a large army, has a continuous tank development and production activity to meet the needs of its own army. For this reason, the USA is a candidate to become the largest supplier in terms of meeting the increasing demand for tanks and armoured vehicles. This is because there is no country in Europe that can meet the demand for tanks and armoured vehicles.

As European armies have shrunk and traditional export relations have atrophied, the industrial base that existed in Europe before the Cold War has also atrophied. In the 1960s and 1970s, France and the UK made large sales of defence equipment to their former colonies. As industrial capability declined in Europe, Russia and China became major players in most African and Asian markets.

There are other alternatives to US and European products. A good example is South Korea, which is now self-sufficient in all land systems. Next to South Korea, there is also Turkey. Turkey, which has a large army (and therefore domestic demand), has become self-sufficient thanks to the production of companies such as FNSS and Otokar. These companies are also receiving orders from the Middle East, Africa and Asia.

In Europe, on the other hand, some countries that used to be the most important tank producers are now unable to produce even their own tanks. In the UK, for example, the Royal Ordnance Factories (ROF) employed around 20,000 people during the Cold War, producing everything from small arms to the Challenger 1 tank.

Today, all that remains are munitions production facilities. Britain cannot even produce the new model Challenger-3 tank, which it plans to produce to replace the Challenger-2 tank, which has become obsolete and inadequate in the face of new developments in anti-tank weapons.

The British decided to co-produce this tank with the Germans. Thus, they formed a joint venture (RBSL), 51 per cent owned by Rheinmetall and 49 per cent by BAE Systems in Telford. Today, RBSL's main programmes are limited to the production of the Boxer Multi-Purpose Armoured Vehicle and the Challenger-3 tank.

The UK is not alone in this. Other European countries are also making agreements on joint production. Finland, for example, has a four-nation MGCS and Joint Armoured Vehicle System production programme. There are also several other new European programmes.

The only single country production programme is the Italian Army's Dardo/M113 programme, known as A2CS, with a potential requirement to operate up to about 700 vehicles.

This is said to be met by an existing design, local production and a joint effort between Italy's Leonardo and Iveco Defence Vehicle (IDV), meaning it will be a completely indigenous solution.

As is evident from all these developments, Europe has lost a large amount of production capacity. Moreover, most of the formerly state-owned R&D facilities have been privatised.

This situation has further accelerated the capacity contraction. Because private companies, whose profits decreased in the face of shrinking demand, closed many production facilities and turned to joint production with private companies of other countries. Some companies were acquired by other companies.

When, through mergers and acquisitions, a group came to own two previously competing product lines, one of them was usually sacrificed together with the plant that produced it. This downsizing of the European defence industry means less competition, which in turn leads to higher costs for the end-user.

Despite all these negatives, the war in Ukraine seems to have galvanised many states. Indeed, signs of a reversal of the decline have started to emerge in some places.

For example, Norway has announced that it will establish a new production line for Leopard 2, which can be used in tank construction. The Santa Barbara Sistemas division of GDELS in Spain has announced the reactivation of its gun barrel line for tank and artillery systems.

Military magazines such as Shephard have been publishing articles on some of these developments. There are also reports on social media and in the press that defence companies around the world are rapidly hiring new personnel. This situation shows that the defence industry will grow considerably in the coming years as it did during the Cold War.

There is no doubt that Turkey is closely following these developments. There have been significant developments in the defence industry in Turkey recently, but Turkey is still in its infancy in the defence industry, although this is exaggerated by some circles.

Expectations of new wars and the threat posed by existing wars are causing the whole world to worry and increasing the demand for weapons. If Turkey closely follows the developments and takes the necessary steps to meet this demand, the industry, which is still in its infancy, will enter the walking phase.

If Turkey can achieve this, it can become a country that sells arms even to the West, from which it has been buying arms for centuries. For this reason, the current developments should be seen as an opportunity for Turkey, not a problem.