Arquus: 2018 results and perspectives for 2019 onward.

On 5 February, in Paris, Emmanuel Levacher, CEO of Arquus (successor of Renault Trucks Defense), presented the worldwide achievements of his company for 2018, as well as the perspectives for 2019 onward. 2018 was definitely an excellent year: the 2018 turnover progressed by 25% in comparison with the 2017 one. An important development deserving to be underlined resides in boosting the use of digital tools, including several social networks.

Arquus Dagger (Picture source: Arquus)

Creating a new brand name in May 2018 that would relevantly combine Renault Trucks Defense, ACMAT and Panhard, three famous brands to which each personnel was attached, constituted a big challenge. The name "Arquus" (archer) was chosen to evoke cavalry, referring to mobility and protection, two concepts corresponding to the wheeled armored vehicles designed and marketed by the French manufacturer. Redefining ad refreshing the products' image, and explain to present and potential customers the relevant reasons of buying Arquus were assigned as priorities tasks.

What was the envisaged strategy? Certainly to keep in the perfectly-mastered segment of the wheeled vehicles, thus excluding tracked ones. For a while, at least. But to expand the company's activity, two additional sectors have been assigned new or stronger development lines: systems (designed like technological "bricks" to assemble at will) and support (with three package levels placed in the framework of the "Trust" program: Classic, Premium and Ultimate. This is a novelty in the military sector in MCO (maintien en condition opérationnelle).

It took 12 months of development for a team of twenty people, four test phases and 260 uses cases to set up the "Trust" support program. Declined in "Classic", "Premium" and "Ultimate", this new service line has already attracted two major customers: the NATO agency NSPA and RAID (French police), the first for its fleet of Sherpa and the second for his PVP. The current 12 vehicles of RAID will be "soon" joined by four new PVP.

The 2018 turnover should have reached about 500 million euros, with signed contracts amounting to 1.269 billion euros (46% for export). Firm contracts amounting to 700 million euros were signed in 2018, which represents a 10% increase from 2017. The present total of orders amounts to around 6 billion euros, among which 1.2 billion in firm contracts.

An important customer, Kuwait ordered 300 Sherpa Light armored vehicles for 270 million euros. France, home country of Arquus, signed two amendments regarding the EBMR amendment 4) and VTCFS amendment 1) (PLFS and VLFS, special forces vehicles) contracts amounting to 900 million euros. 25 PLFS that had to be modified at the factory have already been requalified for reassignment in the army. No further delivery is foreseen in 2019.

Historic markets for Arquus (and other French manufacturers) led and lead Arquus to target some African countries and the Middle-East, the latter having represented 27% of the contracts signed in 2018. Egypt and the United Arab Emirates are privileged "targets". The Asian market is unevenly successful: excellent relations are already established in Singapore and Indonesia. Other markets are inaccessible, due to priority - if not exclusivity - given to indigenous manufacturers. Arquus, like other manufacturers, is partisan of more European integration on certain programs.

Another major customer is Belgium that, on 9 November 2018, officially signed the acquisition contract of 482 vehicles - 382 VBMR Griffons and 60 EBRC Jaguars - for the CaMo (Capacité Motorisée) program to be implemented in close cooperation with the French army (these vehicles will replace the Piranha IIICs and Dingo 2s currently in service in the Belgian army). However, this latter contract remains to be finally approved according to the French procedure. If so (but there is no serious doubt), this contract will bring 250 million euros to Arquus for the mobility component; the two other major partners for these vehicles are Nexter and Thales.

Concerning the Belgian contract, all the remote control weapon stations that will equip the vehicles will be manufactured by FN Herstal in the framework of the economic return demanded by Belgium. These RCWS will be integrated on the vehicles by CMI Defence, another Belgian manufacturer also located near Liège. The program is designed to ensure Arquus with a long duration activity, thanks to the maintenance organized with CMI from the impressive logistical hub located in Fourchambault (France). Beside the CaMO, program, Arquus enjoys an excellent relationship with CMI for other export projects and the integration of their turrets on some Arquus vehicles (a live fire demonstration of a CMI turret mounted on a Sherpa took place at the end of Eurosatory 2018).

1,900 Griffon APCs and 300 Jaguar recce vehicles have been purchased for the French Army. The first 92 Griffons are planned to be delivered in 2019. Half of the total order is planned to be delivered by late 2025.

The first two Arquus VT4 light tactical vehicles - a heavily modified version of the Ford Everest and called Trapper for the export market - were delivered on 11 October 2018 to the French Army. The 500th one was delivered on 17 December. The VT4 is progressively replacing the ageing Peugeot P4.

Arquus, namely with its Bastion armored personnel carrier, is more and more successful in Africa. The Bastion has already been sold to African countries in the G5 Sahel region (Niger already a client) and central Africa (Senegal), as well as for UN operations, this with different financing modes. Arquus is also more and more successful in the Middle East and in Europe.

The partnership with AM General for the production of the Bastion deserves a special mention. AG General wanted a heavier armored vehicle than its Humvee to compete on U.S. Foreign Military Sales FMS) tenders. Hence a deal cut with Arquus for a single and well defined version of its Bastion APC based on the ACMAT chassis, a success story in Africa thanks to its formidable robustness. These Bastions would be manufactured in South Bend, Indiana. Each year, the US buy for billions of dollars of various foreign-made vehicles, weapons, equipment, etc. which it offers to Allies or partners already using these items. Where the U.S. deliver these foreign-made equipments, home manufacturers might not have been in a position of winning contracts. So, it's a win-win operation. Competitions between AM General and Arquus should be very scarce. And even then, Arquus has a joker in its game: maintenance and support packages. Usually, the US like the Chinese and other suppliers) don't go further than offering equipment. So, the road is open to support providers.

While spare parts represented only 2% of the 2018 turnover, the support sector represented 30%. The MCO (maintenance in operational condition) activity is boosted; hence, this figure is expected to increase in the future. Arquus has developed - and goes on in this line - digital tools, namely Virtual Reality. This is already implemented for the VAB Mk III APC. Also for VABs, "health" sensors are installed on twenty-like VABs to enable the calculation of algorithms for maintenance operations before breakdowns occur, a precious requested component of the Griffons.

There are embarrassing uncertainties concerning the purchase of some German components. For example, MTU engines are widely used, and Allison is the nearly-only alternative to the German ZF. Germany has blocked the export of even civilian components if they are to be inserted in military vehicles destined to customers banned by the German government, Saudi Arabia and Egypt for instance. India and Indonesia are recent add-on to the list. It already happened that a single, little seal blocked the manufacture of ordered vehicles. Finding alternate supplies appears sometimes (very) difficult. The engine of the VAB Mk. III is a civilian one but as it is destined to a military vehicle, Germany blocks its export if the vehicle is ordered by Saudi Arabia, one of the banned clients. Same problem that forced to shift from ZF to Allison for the automatic gearbox.

As a result, the engine of VAB Mk.III for Lebanon (ODAS contract) is today a model "ITAR-free" from the American Caterpilllar. The continuation of programs will require the revision of existing bilateral agreements to avoid any future hindrance to exports. In the immediate future, Arquus will continue to favor the integration of native technologies "capable of offering an elegant way out of these export concerns with Germany". Nevertheless, Sherpa and VAB Mk. IIIs will be exported in 2019.

With its Sherpa Light, Arquus is still competing for the Dutch DVOW 12 kN special forces vehicle programme which foresees the purchase of around 1,000 4x4 vehicles. The amazing 4x4 and 4-wheel steering Defenture vehicles have a strong competitor.

As mentioned before, thanks to its 500 engineers, Arquus is boosting the development of "technological bricks" to assemble on new vehicles. In this line, the Scarabe demonstrator, confidentially unveiled at Eurosatory 2018, might replace the Panhard VBL one day. Robotisation is another line of intensive research: various off-road tests have already been successfully achieved with a kit (now commercially available) adapted to the PVP Dagger, which allows the use of a vehicle for reconnaissance on a dangerous itinerary. Driving in convoy is one more robotisation test line: an armored truck heads the convoy, followed at a fixed distance by several other trucks; the driver may be in the first of the second truck; on road, the system works but off-road or on narrow roads, not yet, as the trucks move sideways with a somewhat 1 or 1.5-meter gap. Last but not least, more and more efficient remote control weapon stations are surveyed, the T1 prototype being already competed.

Among the new developments, motorization is a growing concern, as oil might no longer be available in sufficient quantities by the time a new generation of armored vehicles is designed, manufactured and delivered after all what is currently in service. Optimob aims at optimizing the vehicle's energy efficiency; so far, a 27% reduction in diesel consumption has been achieved in a 3-day simulated combat situation. Successful tests carried on with Nexter on the diesel-elecric "hybridation" (ETO Faction) of the VBCI (Véhicule Blindé de Combat d'Infanterie) of the French army. This dual motorisation allows both energy savings and tactical advantages.

Arquus wants to be involved in the future main German-French MGCS (Main Ground Combat System) project, as it has major contribution to bring in terms of mobility. But will the future MBT be... a tank? Emmanuel Levacher asks the question. In a several versions? Wheeled or tracked? Will it be "something" else? It's too early to state an answer? To work on the development of an existing concept is not necessarily a good way to follow. Autonomy will certainly be part of the development. A balanced point between French and German conceptions will certainly be difficult to reach.

Emmanuel Levacher (second from right), CEO of Arquus, during the presentation in Paris, on 6 February 2018 (Picture source: Army Recognition)