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​Romania Explains Why Lynx IFV Costs Over €11M and What 40% Localization Means; Ukraine May Get Similar Terms

Lynx IFV / Photo credit: Rheinmetall
Lynx IFV / Photo credit: Rheinmetall

The first batch of Lynx IFV is expected to arrive in Ukraine later this year, with production to be localized as in Romania, making this example particularly significant

Official Romanian government data submitted to parliament has revealed a €3.33 billion contract for 298 Lynx IFV units, along with production terms.

According to information disclosed by Defense Romania, the Lynx's localization rate will be 40%, which is significantly lower than the "nearly 100%" previously announced by the country's Minister of Defense. The plant in Mediaș, located in central Romania, will produce only the chassis, while the turret will be supplied from Germany.

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The Lance turret accounts for half the cost of the entire Lynx IFV. However, transferring the technology for its production to Romania has been deemed impossible.

Romania Explains Why Lynx IFV Costs Over €11M and What 40% Localization Means; Ukraine May Get Similar Terms, Defense Express

232 of the 298 Lynx IFVs will be financed via the SAFE loan, costing €2.598 billion in total, or about €11.19 million each. he remaining 66 Lynx IFVs will be financed directly from Romania's budget, totaling €738.6 million.

The reason behind the roughly €1 million price increase for the Lynx IFV has also been revealed. The price difference is attributed to configuration, as Bucharest selected a variant of the Lynx IFV fitted with the Spike anti-tank system.

It should be noted that Rheinmetall is already manufacturing its Lynx IFV under localization agreements in Hungary, the first operator of the vehicle, which placed an order in 2020 for 218 units worth €2 billion. Currently, Hungary has its first battalion equipped with Lynx IFVs.

Romania Explains Why Lynx IFV Costs Over €11M and What 40% Localization Means; Ukraine May Get Similar Terms, Defense Express

Hungarian industry has also not been involved in the assembly of the Lance turret and is producing only the chassis. While Romania plans to produce the chassis and install the turrets locally across all 298 units, Hungary will receive 46 of its 218 Lynx IFV as fully assembled vehicles from Germany. Furthermore, localization at the plant in Zalaegerszeg, Hungary, involves a gradual increase in the share of in-house work.

It should be noted that the terms agreed upon by Bucharest are highly indicative for Ukraine, as equipping the Armed Forces of Ukraine with the Lynx IFV is one of the primary and most advanced options. The first batch of five vehicles is expected to be delivered this year, with Rheinmetall estimating a potential Ukrainian contract for around 300 IFVs, pending secured funding.

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