The Australian Department of Defence has called Land 400 one of its 'most significant capability programmes' in terms of acquisition costs and impact on the Army's fighting capability. Its aim is to replace the Army's ageing fleet of M113, ASLAV and Bushmaster PMV vehicles with over 1,000 highly capable new armoured vehicles.

Yet despite the massive investment and a decision that could influence the Australian Army's role in future conflicts, the project has received little attention outside Australia except in defence circles. Other recent high-profile projects like the F-35 Joint Strike Fighter and replacing the Collins-Class submarines have garnered much more scrutiny, despite the fact that the Australian government is planning to spend the same on Land 400 as it is on the F-35 and new submarines.

Who wins and who loses?

The stakes are particularly high for Australia's domestic motor industry, which could play a crucial role in the manufacture of the new vehicles. The announcement in February that Toyota would be joining Ford and General Motors (Holden) in closing its Australian car production operation effectively ended the country's motor industry. When Toyota finally ends production in 2017, it will be the first time Australia has had no domestic carmaker since 1925.

Geelong, historically the centre of manufacturing in Australia's most densely-populated state, Victoria, will be affected and other areas in neighbouring South Australia will feel the pain from job losses.

For many Australians, the loss of the car industry represents a hollowing-out of traditional manufacturing in Australia. The manufacturing sector now accounts for around 6-7% of total economic output and employment as a whole in Australia is lower than it was during the global financial crisis. It is then no wonder that support among the general public for domestic manufacturing is "extremely strong", according to industry sources.

Australia’s LAND 400 project to revolutionise combat vehicles Worth around AUD 10 billion, LAND 400 will be the Australian Army’s largest to date..

With unemployment rising and the threat of recession now looming over areas like Geelong, there is a concerted effort to revive a flagging commercial manufacturing sector with defence projects like LAND 400. This would work along similar lines to the Techport naval shipbuilding precinct in South Australia. One group leading the charge to keep LAND 400 production in Australia is the Geelong Region Alliance (G21), representing a number of government, business and community organisations in the area.

"The diverse skills, high technology components and manufacturing innovation required for Land 400 make it the perfect fit for Geelong and Victoria, consolidating our transformation into a global, high technology, design, engineering and manufacturing city," the G21 website explains.

Favouring domestic production

With these considerations in mind, the Australian government will inevitably favour domestic production for Land 400 over foreign imports. But which company in contention for Land 400 is in the best position to use the domestic production capacity which has been left by the three big car manufacturers, and which has the most suitable vehicle for LAND 400 requirements?

As Australia's largest defence contractor and one of the biggest manufacturers of armoured vehicles in the world, BAE Systems is a top contender for winning the LAND 400 contract. The company has several existing vehicles which could fulfil the role required, including:

Bradley Fighting Vehicle - used extensively by the US Army in Iraq

Combat Vehicle 90 - used by the Swedish Armed Forces

RG41 - an 8x8 wheeled armoured vehicle used by the South African military

Warrior Fighting Vehicle - also used by the British Army in Iraq

GCV - a next-generation combat vehicle which is being considered by the US Army

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While BAE Systems does not have a long history of manufacturing land based-systems in Australia, industry experts has the company tagged as a front-runner.

Another major candidate is US defence giant General Dynamics. Despite having a smaller footprint in Australia compared with BAE Systems, it has already set up operations in the country with the primary aim of providing through life support for the ASLAV armoured vehicle. This suggests a mature capabilities base which could be beneficial for the Land 400 programme. General Dynamics also has what could be considered the strongest line-up of light, wheeled armoured vehicles, which includes:

Stryker - used by US Army in Iraq and Afghanistan

Piranha AV - Australia's existing ASLAV is a derivative of this

ASCOD - tracked vehicle in service with Spain and Austria

LAV High Capacity - In service with New Zealand and Canada

While BAE Systems and General Dynamics have a strong portfolio of armoured vehicles, other challengers include French company Thales and German technology group Rheinmetall. Both companies have been heavily involved in the Australian Army's acquisition of vehicles over recent years. Thales likely has the most extensive armoured vehicle design and manufacturing capabilities in Australia at the moment, given their current work on the army's Land 121 Phase 4 Hawkei programme.

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Rheinmetall has equally had success with the Army's Land 121 project, winning a contract worth US$1.5 billion in 2013 to supply 2,500 trucks to the Australian Defence Force. The company also has a strong selection of armoured vehicles including the AMPV, Boxer, Marder and Puma, all of which were initially developed for the German Army. The Puma was offered for the US Army's GCV programme but was rejected in favour of the bids from BAE Systems and General Dynamics.

Aerospace giant Boeing has also put forward its credentials as a systems integrator for the Land 400 program, potentially opening the door for a joint bid with another manufacturer.

Australia is not the only country on the look-out

The Australian military is certainly not alone when it comes to wanting to replace its armoured vehicles. Several countries are exploring options to get rid of their ageing fleets, with the US Ground Combat Vehicle being the most ambitious programme so far. Earlier this year, that project was effectively cancelled by the Pentagon because of budgetary concerns. Canada also cancelled a similar multi-billion dollar programme to buy new armoured vehicles in December 2013.

Current trends from North America indicate armoured vehicles are a lower priority in defence spending terms, especially now that wars in Afghanistan and Iraq have come to an end and a pivot to Asia concentrates on maritime operations. This could affect the future of LAND 400 and the proposed 1,100 vehicle purchase. Recent reports also indicate the Abbott government's support for expensive defence projects - like the submarine replacement programme - may be faltering.

LAND 400 is not just a case of where the vehicles will be built and by whom, but, if recent trends are to be believed, it's also a question of whether they will be built at all. That should be a crucial concern for those in the Australian defence industry. At the moment at least, LAND 400 still has the green light. The next step will be Government First Pass Consideration scheduled for 'mid-2014' which will signal if the Australian government still wants to proceed. After that a request for tender will be released to industry.

Only then will we know for sure who is in the running for the AUD10 billion programme.

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