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  • U.S. Military Truck Makers Looking Overseas
    Posted by Paul McLeary 3:06 PM on Aug 05, 2011

    With defense budgets in the U.S. about to go through some painful contractions, putting large-scale ground vehicle programs like the Joint Light Tactical Vehicle and the Ground Combat Vehicle at risk, military truck makers may take a harder look at the international market—a space all the big industry names have been hard at work in for years, anyway.

    The key, according to many in the industry, is to partner with local manufacturers to create a viable, long-term partnership. “You need a unique approach for each market,” says BAE Systems’ John Kelly, VP of Business Winning for Land & Armaments, “but there are some common denominators that you do see. And one of them is the desire to create jobs and economic prosperity through the defense industry” in the country. Senior VP of International Programs for Oshkosh Defense, Serge Buchakjian, said much the same thing, noting that his company’s vision to grow its international business involves “partnering with local industry, as well as exporting from the U.S.” Part of this partnership involves after-sale upgrades and overhaul, notes Rob Puhalovich, director of business development for truck maker Navistar. He says that while 25% of the revenue is generated by the initial sale of the vehicle, the other 75% “is all the parts and service business that’s associated with that vehicle.”

    There’s a consensus among the three that some of the biggest markets for new military vehicles currently are Saudi Arabia, which is constantly upgrading its fleet; Canada, which is in the middle of the selection process for three different variants numbering several thousand vehicles; and places like Brazil, Chile, India and Malaysia. All of those countries have open vehicle programs, and have partnered with U.S.-based companies to produce some vehicles and/or parts domestically. BAE’s Kelly says that as a general rule, market trends tend to favor “wheeled vehicles over tracked vehicles,” and like Puhalovich, Kelly says that after a sale, a “key part of the business is support and technical services”—a business that can continue for decades.

    Tags: vehicles, LATV, GCV, ar99

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