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GM Canada drives to dominate armoured vehicle sales.

With the August announcement that its Diesel Division has bought the Swiss company that developed the Piranha light armoured vehicle (LAV), General Motors of Canada has positioned itself to dominate the global wheeled armoured vehicle market. Armed forces worldwide are planning major purchases of wheeled light armoured vehicles in the next few years and the buyout has effectively merged two of the largest suppliers.

GM Canada's Diesel Division purchased Motorwagenfabrik AG (Mowag) of Kreuzlingen, Switzerland for an undisclosed sum in July, although the sale was not announced until a month later. Mowag, designer of the Piranha LAV that Diesel Division builds under licence in Canada, has estimated annual sales of $250 million. Mowag has supplied LAVs to Denmark and Sweden in Europe, Saudi Arabia, Oman, and Qatar in the Middle East, and has bid on sales to Malaysia in Asia. Mowag also has licenced production of the Piranha to companies in Chile, Saudi Arabia, and the United Kingdom in addition to Canada. Estimated income for the Diesel Division of GM Canada from 1998 military sales was $366 million. In September the company received a follow-on order from the Canadian Department of National Defence for 120 armoured personnel carriers (APCs) worth $247 million. Combined with two earlier orders for 360 APC vehicles, this latest Canadian army contract is worth more than $1 billion. Earlier DND contracts with the company -- which began in the late 1970s and included 6-wheeled LAVs (as Cougar, Husky, and Grizzly variants), 8-wheeled vehicles (Bison LAVs for the militia), and sophisticated reconnaissance vehicles (Coyotes) -- have also totaled more than $1 billion. Export orders to the US Marines in the 1980s and the Saudi Arabian National Guard and Australian Army in the 1990s have exceeded $2 billion.

GM Canada is hoping the buyout will result in an increased share of the international armoured vehicle market. In addition to pursuing known military competitions, bidding on upcoming contracts in New Zealand, the UK, Thailand, and Indonesia, for example, the Canadian-based company is hoping to expand its customer base. "We need to convince people there are other uses for armoured vehicles," a company official has said (Globe and Mail, August 13, 1999, p. B3).
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Publication:Ploughshares Monitor
Date:Sep 1, 1999
Words:362
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