TRACKING THE THIRD WORLD ARMORED VEHICLE MARKET

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90T01298R000200390001-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 37
• Document Creation Date: December 27, 2016
• Document Release Date: February 3, 2012
• Sequence Number: 1
• Publication Date: March 1, 1985
• Content Type: REPORT

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Directorate of
Intelligence
-1.0052-,
ecrel
2143
Tracking the Third World
Armored Vehicle Market
A Research Paper
Sccrct
GI 85-10052
March 1985
Co? 283
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Directorate of
Intelligence 25X1 ?
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Tracking the Third World
Armored Vehicle Market
A Research Paper
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This paper was prepared by 25X1
a contribution frorr Office of
Global Issues. It was coordinated with the 25X1
Directorate of Operations. Comments and queries are
welcome and may be directed to the Chief,
International Security Issues Division, OGI, 25X1
Sccrct
GI 85-10052
March 1985
25X1
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Key Judgments
Information available
as of 15 January 1985
was used in this report.
Tracking the Third World
Armored Vehicle Market
Secret
Third World armies are nearing the end of a rapid expansion of their
armored vehicle inventories. In the last decade their armored forces have
grown by almost 60 percent to more than 80,000 vehicles, with correspond-
ing improvements in quality. Inventory growth will slow in the next 10
years as Third World states absorb recent purchases. Less than 35,000
armored vehicles will be added to their inventories over the next decade,
more than a 60-percent drop in the size of the Third World armored
vehicle market. Quality improvements should continue.
The softer market will affect producers of armored vehicles and equipment:
? The Soviet Union will remain the leading supplier by holding about one-
third of the market through new orders from traditional clients, such as
Syria and Iraq, and by offerings of more advanced equipment and
favorable financing terms.
? Third World producers will expand their current 10-percent share by
providing low-priced vehicles with reliable, basic designs that can be
easily assimilated by less sophisticated armies.
? The East European market share will decline from the current 10 percent
as the older T-54/55 tank the principal export model?is phased out of
production.
? West European producers will continue sales to regular customers, but
the drop in their current 15-percent market share will force a reorganiza-
tion of industries and revisions in export policies. The upgrading of
existing vehicles in Third World inventories, however, will benefit
manufacturers of armored vehicle equipment, such as main guns,
engines, and fire-control systems.
The future armored vehicle market has mixed implications for the United
States. The demand for US equipment will remain strong over the next de-
cade, but the US role as a supplier to the Third World of 30 percent of all
armored vehicles will decline. The drop in the West European share will
also affect NATO armor procurement plans. Smaller foreign sales will
increase the unit cost of West European models for domestic armies.
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GI 85-10052
March 1985
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In addition, the continued buildup of high-performance Soviet vehicles in
Third World inventories could threaten US and allied interests by
destabilizing regional military balances. Soviet provision of large numbers
of new-generation armored vehicles to several clients in North Africa and
the Levant and India, for example, gives their armies a greater ability to
challenge regional forces during crises. Western sales of comparable
vehicles to clients who have expressed an interest?such as Egypt and
Saudi Arabia?are not imminent. Most Third World armies, however, will
retain only a limited ability to conduct offensive armored operations.
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Contents
Page
Key Judgments
Scope Note
Introduction
Ill
vii
1
A Growing Market, 1974-83
1
Armored Personnel Carriers (APCs) and Reconnaissance
Vehicles (RVs)
Tanks
1
The Declining Third World Market, 1985-94
3
The Pattern of Future Armored Vehicle Purchases
4
Infantry Fighting Vehicles (IFVs), APCs, and RVs
4
Tanks
5
Outlook for Suppliers
6
Third World
6
China
9
Eastern Europe
9
Soviet Union
9
Western Europe
10
Implications for the United States
13
Regional Instability
13
NATO Armor Procurement
14
US Sales
14
Appendixes
A. The Structure of the Armored Vehicle Market
15
B. Market Variables
23
C. Changing Needs
27
D. Third World: Projected Armored Vehicle Purchases, 1985-94
29
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Scope Note
This paper reviews the Third World demand for armored vehicles in the last
decade, projects sales in the next 10 years, and assesses the significance of the fu-
ture market for Western, Third World, and Communist producers of armored
vehicles and equipment. Implications for the United States also are provided. This
study covers the following types of armored vehicles:
? Main battle tanks. Vehicles over 30 tons, armed with at least a 76-mm gun and
used for direct fire support.
? Light tanks. Vehicles between 20 and 30 tons, armed with at least a 76-mm gun
and used for direct fire support.
? Armored personnel carriers (APCs). Vehicles under 20 tons, used to transport
troops.
? Reconnaissance vehicles (RVs). Vehicles under 25 tons, armed with at least a 20-
mm gun and used for battlefield reconnaissance.
? Infantry fighting vehicles (IFVs). Vehicles under 20 tons, armed with a chain gun
or cannon 30 mm or smaller and used for infantry fire support.
We have omitted self-propelled artillery and antiaircraft guns that use armored
vehicle chassis and fill battlefield support roles. These weapon systems account for
less than 7 percent of total chassis production for armored vehicles.
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Tracking the Third World
Armored Vehicle Market
Introduction
Third World' armies are nearing the end of a rapid
expansion of their armored vehicle inventories. In the
last decade their armored forces have grown by
almost 60 percent to more than 80,000 vehicles (figure
1). This expansion has been accompanied by gains in
the quality of vehicles acquired by Third World
armies. Financial problems and the completion of
modernization programs will result in a period of
slower growth over the next decade while these armies
integrate their new armor. This slowdown has impor-
tant consequences for the producers of armored vehi-
cles and equipment in developed and less developed
countries.
A Growing Market, 1974-83
Third World states purchased more than 56,000
armored vehicles?compared to about 13,000 jet com-
bat aircraft and 400 warships?in 1974-83 (figure 2).
Armored vehicles were more popular items because of
their relatively low price' and modest training re-
quirements. Sales of armored vehicles also were high-
er because almost all Third World states possess
armies or land forces, but few have navies or air
forces. More than half of these vehicles were from
new production; the remainder was used vehicles
transferred from the armies of developed and other
Third World states.
Armored Personnel Carriers (APCs) and Reconnais-
sance Vehicles (RVs). Sales of APCs and RVs domi-
nated the Third World market in 1974-83.
multirole capability and small
crew and training requirements were the major selling
points of APCs and RVs. Wheeled APCs and RVs?
which comprise about 40 percent of sales?are be-
coming more popular because they perform better in
' Third World includes all countries except members of NATO and
the Warsaw Pact, neutral and nonaligned European countries?
Albania, Austria, Finland, Ireland, Switzerland, Sweden, and
Yugoslavia? and Australia, China, Japan, and New Zealand
'
The average price of a new tank was about $1.5 million and
$500,000 for an APC or RV. In comparison, a new jet fighter costs
about $20 million and a major warship more than $100 million.
Figure 1
Third World: Growth of Armored
Forces, 1974 and 1983
44,116
1974 1983
Tanks
1974 1983
APCs and RVs
304877 2-85
rugged terrain and consume less fuel than tracked
vehicles. The leading recipients were armies in North
Africa and the Levant, the Persian Gulf, and Sub-
Saharan Africa (figure 3). For example:
? Since 1974 the Syrian Army has acquired more
than 1,100 BMP-1 APCs from the Soviet Union.
? Zimbabwe recently purchased 90 Brazilian
Cascavel RVs armed with 90-mm guns.
? Saudi Arabia has bought more than 800 US M113
and French AMX-10P APCs since 1978.
? Egyptian purchases of US M113 APCs since 1977
total more than 1,000 units.
Tanks. Although fewer tanks than APCs and RVs
were sold in the last decade, Third World tank
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Figure 2
Third World: Suppliers of Armored Vehicles, 1974-83
Percent
Tanks APCs and RVs
Total: 25,756 Total: 30,773
\Western I urope
Other
Eastern Europe
I.Jnited States
Soviet Union
Eastern Europe
Other
Western Europe
Soviet Union
United States
304878 2 85
Figure 3
Third World: Armored Vehicle Purchases
By Region, 1974-83
Percent
Tanks APCs and RVs
Total: 25,756 Total: 30,773
Southeast Asia
Latin America
South Asia
East Asia
Sub-Saharan
Africa -
North Africa/
Levant
Persian Gulf
Southeast Asia 2 East Asia I
South Asia
Latin America
Sub-Saharan
Africa
Persian Gulf
North Africa/
Levant
304879 2-85
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Jane's Main Bank Tanks ?
17"
Jane's .4rmour and Artillery
Figure 1. U.S. and Soviet tanks.
The Soviet T-72 tank. The new-generation T-72
has been exported to several clients, including
Algeria, India, Iraq, and Peru
The US M60 tank. The M60 is in service with 15
Third World armies, including those in Egypt,
Israel, Singapore, and South Korea. Model
shown is the M6043 with infrared searchlight
and improved fire-control system and engine.
1984-85 ?
inventories more than doubled. US and Soviet tanks
were the most popular, with the main buyers again
states in North Africa and the Levant and, Persian
Gulf. these states' armies
were particularly impressed with the proven combat
performance of US and Soviet-style tanks (figure 4).
For example, according to Defense Department
reporting:
? Since 1974 the Syrian Army has acquired almost
3,000 T-54/55 and T-72 tanks from Moscow.
3
? Egypt plans to replace at least half of its aging
Soviet-made inventory with about 1,500 US M60A3
and possibly Ml tanks by 1993.
? The Iraqi Army has received almost 4,000 T-54/55,
-62, and -72 tanks from the Soviet Union and
Eastern Europe and T-59/69 tanks from China
since 1974.
? Iran acquired almost 800 US M60A3 tanks before
1979. Since 1981 Tehran has received about 200 1-
54/55 and T-62 tanks from North Korea and
Libya.'
The Declining Third World Market, 1985-94
Armored vehicle purchases are now leveling off, and
several factors point to a much smaller Third World
market in the next decade:
?
Decreased funding. The large increase in OPEC
revenues generated by the hike in oil prices in
October 1973 and easy financing packages offered
by suppliers pushed armored vehicle purchases in
1974-83 to more than $20 billion.' Third World
armored purchases are now being constrained by
debt problems and the soft oil market. 25X1
that Nigeria cance es an 25X1
option to purchase 160 LS APCs because of fund-
ing shortages. The Indonesian Army also shelved
plans to purchase additional US APCs because of
falling oil revenues. Third World armies usually
account for the largest portion of military budgets,
but the recent economic pinch has constrained
purchases.
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slashed funding for
armor procurement as part of its recent defense
budget cutback.
? Completion of modernization programs. Increased
revenues and regional threats drove many armor
modernization cycles. Purchases are now leveling
off after the rapid expansion of inventories in the
last 10 years. Armored vehicle producers will not
benefit from equipment replacement cycles until
after the turn of the century.
' See appendix A for details on the structure of the armored vehicle
market
? In comparison, we estimate that Third World states spent about
$50 billion on jet combat aircraft and $10 billion on warships in the
same period.
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Completion of armored infantry programs. Many
Third World armies mechanized infantry and ma-
rine units with armored vehicles as part of their
modernization efforts, according to
Defense Department reporting. The pace of
mechanization is now slowing because most Third
World armies do not possess the large infantry
forces necessary to sustain these programs. Only a
few Arab armies?such as the Egyptian, Saudi, and
Syrian plan to continue mechanizing infantry
units above battalion size.'
? A smaller number of used vehicles. More than
26,000 low-cost used vehicles?mostly those retired
from the Czechoslovak, Polish, and Soviet armies?
entered the market in the last decade.
. We estimate that
the number of available used vehicles will decline by
almost 50 percent to about 14,000 in the next
decade. The majority of used US vehicles are slated
to NATO aid programs for Greece, Spain, and
Turkey. The primary West European suppliers?
hard hit by the slump in arms sales?are delaying
the retirement of many vehicles. The United King-
dom, for example, is extending the operational life
of its Chieftain fleet because of slowed deliveries of
new Challenger tanks. We estimate that the US and
West European armies will retire about 3,400 tanks
and 8,400 APCs and RVs. About 50 percent of
these vehicles will be sold to countries seeking
surplus Western models including North Yemen,
Pakistan, and Somalia.
Several other factors could further reduce Third
World purchases of armored vehicles in the next
decade:6
? Upgrade programs. Funding shortages are forcing
Third World states to upgrade existing armored
inventories rather than purchase new vehicles.
Israel up-
gunned its Soviet-made T-54/55 inventory with
The manpower strength of mechanized battalions in Third World
armies varies greatly. For example, battalions in the Indian Army
comprise 900 soldiers, compared to 300 to 400 men in an Iraqi
battalion. Mechanization programs involve putting all personnel in
APCs with tanks and RVs often complementing the unit.
See appendix B for details on these market variables.
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British 105-mm guns produced in Israel
? Third World production. An increasing number of
states are producing their own armored vehicles
rather than seeking foreign models (figure 5). Since
1975, five countries?Brazil, Israel, North and
South Korea, and South Africa?have made the
jump from licensed assembly to production of ar-
mored vehicles of domestic design. India will begin
producing its indigenously designed APC and Mod-
el 80 tank in the late 1980s, and Egypt has also
constructed a prototype of a new APC. We estimate
that Third World states will produce almost 6,000
vehicles in the next decade to fill their armor needs
(table 1).
? Alternative systems. Some Third World armies are
considering attack and transport helicopters and
portable antiarmor weapons to fill roles now slated
to armored forces.
The Pattern of Future Armored Vehicle Purchases
we
estimate that Third World states will order fewer
than 35,000 vehicles over the next decade, down more
than 60 percent from the level reached in the last 10
years (table 2 and figure 6). The softer market will
result in more gradual growth of Third World ar-
mored inventories (figure 7). In cases where informa-
tion on the intentions of Third World armies was not
available, we assumed vehicles older than 25 years
would be retired and replaced on a one-for-one basis.'
Infantry Fighting Vehicles (IFVs), APCs, and RVs.
We expect purchases of APCs and RVs to decline by
about 40 percent to about 19,000 in 1985-94. Several
countries?India, Iraq, and Saudi Arabia?plan to
purchase 1,000 or more APCs, IFVs, and RVs. We
' See appendix C on changing armored vehicle needs and appendix
D for detailed projections of country purchases.
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All photos:
dune', Light Tanks and .4rtnoured (nrs. C)
Figure 5. Vehicles produced by Third World
.ctates (top to bottom), the Brazilian Jararaca
RV. Israeli RB) 11.1k I RV, and South African
Eland RV.
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Table 1
Third World: Projected Armored
Vehicle Production, 1985-94 d
Tanks
A PCs/ I FVs/ R Vs
Total
Total
2,085
3,700
5,785
Brazil
330
1,770
2,100
India
100
0
100
Israel
355
560
915
North Korea
1,300
800
2,100
South Africa
0
570
570
South Korea
0
1,492
1,492
Excludes vehicles produced under license.
expect regional threats and insurgencies to prompt
Angola. Ethiopia, and Thailand each to order about
an equal number. A large number of other states--
including Egypt, Iraq, and Mexico--plan to update
aging APC and RV fleets with newer models to
mechanize infantry units and perform internal securi-
ty missions. All of these purchases will be subject to
budgetary constraints.
Tanks. Third World armies will acquire fewer than
14,000 tanks in the next decade, down almost 50
percent from the previous 10 years. The market for
main battle tanks is depressed because Third World
armies usually have only a small need for them and
financial problems have reduced their ability to buy
them.
only Iraq and Libya will order 1,000 or more tanks to
replace older Soviet-style models or expand their
inventories. Iran will probably buy about 500 tanks
from China and if no other sources are available?
North Korea to replace its US-made inventory when
the war with Iraq is over.
Among other purchasers, Syria plans to ac-
quire almost 800 tanks to replace older T-62s in its
armored divisions, and the Saudi Army wants to buy
300 tanks to replace its two brigades of aging A MX-
30s. Egypt would like to purchase about 650 US M1
tanks by 1993 to augment the 750 M60A3s it will
buy, but funding constraints will be a problem.
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Table 2
Third World: Projected Armored Vehicle
Purchases by Region, 1985-94
North Africa/
Levant
Sub-Saharan Persian
Africa Gulf
Latin
America
South
Asia
Southeast
Asia
East
Asia
Total
Total
6,724
6,729
8,416
2,782
2,898
3,900
1,385
32,834
Tanks
2,930
2,119
4,414
1,367
1,007
1,154
715
13,706
A PCs/ I FVs/ RVs
3,794
4,610
4,002
1,415
1,891
2,746
670
19,128
Outlook for Suppliers
Despite the softer market for armored vehicles over
the next decade, Third World and Communist suppli-
ers marketing inexpensive but durable armored vehi-
cles stand to benefit. Although their level of sales will
probably drop slightly, their share of the overall
market will grow as they become more competitive in
the smaller armored vehicle market. An exception will
be East European suppliers who will play a smaller
role as their older main export models end production.
West European producers will be favored in selected
sales to former colonies, but the continued drop in
orders will force them to make changes in industries
and export guidelines as they try to check the slide in
their market share.
Third World. We expect the main Third World
suppliers Brazil, North Korea, and South Africa?
to slightly expand their 10-percent share in the small-
er armored vehicle market in the next 10 years. Third
World producers will see their sales drop from the
1974-83 level of over 6,000 vehicles as the overall
market shrinks. Brazil, North Korea, and South
Africa, however, will enjoy competitive advantages
stemming from:
? Low labor costs. an
armored industry worker in Brazil earns about
$1.40 an hour compared to $15.00 for his US
counterpart. The predominately black work force
also assures low labor costs for South African armor
producers. This allows Brazilian and South African
producers to typically price their vehicles up to 40
percent less than comparable Western models
the new Brazilian Tamayo main battle tank is
priced at less than $1 million compared to $1.5
million for the US M60.
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? Barter arrangements. Severe debt problems are
forcing Third World states to increasingly engage in
barter trade. This will benefit Brazil and North
Korea because they are willing to trade armored
vehicles for commodities.
? Iranian postwar armor procurement plans.
North Korea has been the main supplier recently of
tanks to Iran, and Tehran may acquire some North
Korean models as part of its effort to rebuild its
postwar inventory.
? Aggressive marketing efforts. Brazil has keyed on
Third World states in its burgeoning arms export
drive and often uses sales of APCs and RVs as
wedges to open up new markets. North Korea is also
building on its position as a supplier of vehicles to
the combatants in the Iran-Iraq war to find new
markets.
The reliable armored vehicle designs Third World
producers are offering will interest other Third World
armies. Almost all indigenously designed APCs and
RVs currently produced in the Third World are
wheeled versions which are more marketable than
tracked vehicles. For example, the proposed Brazilian
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Figure 6
Third World: Armored Vehicle
Purchases, 1974-94.
30,773
1974-83 1985-94
Tanks
a Estimated
1974-83 1985-94
APCs/IFVs/RVs
304880 285
Tamayo will interest armies seeking a tank with good
mobility and improved ballistic protection through the
use of sloped armor and a low-profile design. Press
sources, for example, report that Saudi Arabia is
interested in the Tamayo.I
Profits from new armored vehicle production, how-
ever, will be small for Third World manufacturers.
Most producers?unable to offer main or light battle
tanks will concentrate on sales of less expensive
APCs and RVs. In any case, the engines, main guns,
and fire-control systems in Third World?produced
vehicles will continue to be imported. The hull, drive
train, and light armament 30 percent of the value of
an armored vehicle?will be the primary Third World
input. The new Brazilian EE-T1 tank design shows
the high foreign content that will continue to charac-
terize Third World vehicles (figure 8).
The role of Third World suppliers will further in-
crease as financial and operational requirements force
some states to dispose of current inventories. Several
Third World armies are making changeovers to newer
7
Figure 7
Third World: Growth of Armored
Forces, 1974, 1985, and 1994.
53,292
1974
a Estimated.
304881 285
1985
Tanks
68,436
1994 1974 1985 1994
APCs/IFVs/RVs
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vehicles and are considering selling existing inven-
tories to avoid standardization problems and to cut
operating and maintenance costs. Egypt would like to
phase out about 3,600 of its Soviet-made vehicles to
accommodate its switch to US models,
may dispose of some of
its 1,200 Vijiyanta tanks as it standardizes with
Soviet armor. Iraq may also sell some of its 1-54/55
tank fleet as it recycles newer tanks into its inventory,
if Moscow gives approval. Simmering regional ten-
sions, however, will probably curtail the plans of some
Third World armies to reduce inventories. Israel and
India, for example, may reconsider selling their older
US-, Soviet-, and British-made vehicles because of the
unstable security situation in the Middle East and
South Asia.
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Figure 8
The Brazilian EE-T1 Light Tank: Foreign Equipment Inputs
1,2
7
5,6
Equipment
? Manufacturer
Country
I. Diesel engine
MTU
West Germany
2. Transmission
Unknown
West Germany
3. Tracks
Diehl
West Germany
4. Suspension system Dunlop
?United Kingdom
5. 105-mm" gun
Royal Ordnance Factory United Kingdom
6. 120-mm gun.
GIAT France
7. Fire-control system
NA United Kingdom or France
a Gun maybe produced under license in Brazil.
308883 3-85
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China. In our judgment, China will maintain a
competitive edge in the Third World armored vehicle
market. Chinese vehicles
although based on 1950s-vintage Soviet technology
tolerate harsh climates and heavy use better than
many Western models. Iran may try to supplement its
postwar tank inventory with Chinese models, and Iraq
will continue acquiring Chinese tanks to maintain a
wartime reserve in the event of another Soviet embar-
go. We believe several African states with security
ties to Beijing Congo, Tanzania, Zaire, and Zam-
bia will continue to rely mainly on China for their
limited armor needs.
Eastern Europe. The East European market share of
about 10 percent will decrease as the T-54/55 tank
the principal export vehicle?is phased out of produc-
tion. The T-54/55 spearheaded East European sales
of more than 5,000 vehicles in 1974-83 (figure 9).
Only Romania will continue producing the T-54/55.
The US attache in Warsaw reports that the last batch
of 200 T-54/55 tanks produced in Poland were sold
recently to India and Iraq.
T-72 is now entering production for national
militaries in Czechoslovakia and Poland. The Czecho-
slovak and Polish T-72 tanks are identical to the
Soviet version, which is too complex and heavy for
most Third World armies.
Some Third World operators of Soviet-style armor,
however, will continue to look to East European
suppliers to augment their needs. Some Third World
users of Soviet-style vehicles prefer not to deal with
Moscow for political reasons or wish to avoid depen-
dence on the Soviet Union. Iraq, for example, pur-
chased large numbers of tanks from Poland and
Czechoslovakia largely out of deep distrust of Moscow
after its embargo in 1980-81. Iran and Iraq will
probably augment their postwar APC fleets with East
European models similar to the BTR and BMP series.
The Czechoslovaks, for example, produce the
OT-62/64--a version of the BTR-50/60?as well as
the BMP-1 APC. Sales of these vehicles, however,
will continue to be subject to Soviet approval.
9
Soviet Union. The Soviet share of the armored vehicle
market will slightly decline from the 1974-83 level of
35 percent, but Moscow will remain the leading
supplier as key customers place new orders. Moscow
sold almost 20,000 vehicles in the last 10 years (figure
10). We estimate that several traditional Soviet cli-
ents?Ethiopia, India, Iraq, Libya, and Syria will
together acquire almost 10,000 vehicles by 1994.
In some cases, concessionary prices
and the need for follow-on support ensure that Soviet
clients purchase most of their vehicles from Moscow.
Low prices occasionally may also open up new mar-
kets
We expect the Soviet role in the market to remain
concentrated among longtime clients. Since 1974
Moscow has exported more vehicles than any other
supplier, but the number of major recipients has been
selective. Purchases of more than 300 Soviet vehicles
were made by a few Marxist Third World states
Angola, Cuba, Ethiopia, South Yemen, and Viet-
nam and regular customers Algeria, India, Iraq, 25X1
Libya, Peru, and Syria. Several of the latter also
purchased more than 200 vehicles from Western
suppliers, the sales pattern 25X1
for Soviet vehicles reflects their lower prices and
quality compared to Western models. At $250,000
each, for example, a BMP-1 APC is priced about $50
to $120,000 less than comparable Western vehicles
such as the French AMX-10P and US M113 APCs.
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Nevertheless, prospects for Western and Third World
inroads into most Soviet-dominated armored vehicle
markets are poor. Soviet clients generally purchase
only token numbers of Western vehicles to upgrade
their inventories or squeeze Moscow for better sales
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Figure 9. T-54/55 tanks during maneuvers. The T-54155 is the
main Soviet and East European export vehicle.
terms. The Soviets?unwilling to risk losing tradition-
al clients?have recently taken steps to close their
markets to Western suppliers. Moscow provided India
with a license to produce improved T-72 tanks and
new-generation BMP-2 APCs to prevent it from
seeking comparable Western models,
In contrast to the stiffer financing
terms Western suppliers are demanding, Moscow in a
few cases has offered more flexible payment sched-
ules. Some Iraqi payments, for example, have been
deferred to accommodate Baghdad's precarious finan-
cial position during its war with Iran.
Western Europe. West European armored vehicle
producers will play a smaller role in the Third World
market, but equipment manufacturers will continue to
do well. West European producers held about 15
percent of the market in 1974-83 with sales of about
8,000 vehicles. Recent sales trends indicate this share
will shrink over the next decade
Defense attaches and US Embassy officials report
that the West European share is already shrinking
Secret
Jane's Main Battle Tanks ?
because of the high prices and lower quality of some
of their vehicles:
? Third World operators of the 1950s-vintage French
AMX-30 tank regard it as unreliable and overpriced
at $1 million each. No AMX-30 tanks have been
sold since 1980. Two follow-on models the AMX-
32 and AMX-40--have received no orders despite a
major sales campaign since 1981.
The Italian OF-40 tank has been sold in small
numbers only to the United Arab Emirates.
the OF-40 is perceived as
inferior to most US, Soviet, and British models.
? French AMX-1ORC RVs in the Moroccan Army
inventory have experienced breakdowns in the sus-
pension system caused by the excessive weight of the
105-mm gun. Modifications to solve the problem
will further increase the price of the vehicle
already more expensive than the AMX-30 tank.
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Figure 10
Third World Soviet Armored Vehicle Deliveries, 1974-83
ETHIOPIA
SOMALIA
MADAGASCAR
C A R -CENTRAL AFRICAN REPUBLIC
PD R Y -PEOPLE'S DEMOCRATIC REPUBLIC OF YEMEN
Y A R -YEMEN ARAB REPUBLIC
Delivered vehicles
400 and above
200 - 400
100 - 200
less than 100
Armored vehicle sales are one of the most important elements of the Soviet security-assistance
effort in the Third World. Since 1974 Moscow has exported more vehicles-almost 20,000-than
any other supplier. Prices for these vehicles are very competitive and attractive financing
is often provided. Moscow-like other suppliers--often uses armored vehicles sales as a wedge
to begin or expand an assistance program because almost all Third World states possess armies
or land forces but few have navies or air forces. In addition to the smaller crew and training
requirements of arrnored vehicles, customers are impressed by the proven combat performance of
Soviet models. The military advisory package that accompanies these sales also allows the
Soviets to expand their presence in a country
704520 3 85
? The 66-ton British Challenger tank performed poor-
ly in desert mobility trials last year in the Middle
East. No orders have been received for the Chal-
lenger priced at more than $2 million each
despite high-level marketing efforts since 1982.
The only significant sale of West European vehicles
that we foresaw the Saudi purchase of 300 tanks?
has been delayed indefinitely. Riyadh has expressed
its preference for the West German Leopard 11, but
Bonn has refused to approve a sale. Although the
Saudis have also offered to buy a comparable number
of APCs, they refuse to purchase any vehicles if the
Leopard 11 is not included in the package. Riyadh has
also reviewed the AMX-32 and Challenger tanks but
appears to be leaning toward the US M1 equipped
with a 120-mm gun. Long production leadtimes and
sales restrictions, however, would preclude an Ml sale
before 1990.
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West European armored vehicle exporters will try to
slow the erosion of their market position by using
traditional sales advantages. Some new orders may be
secured by exploiting security ties with former colo-
nies in Sub-Saharan Africa and the Persian Gulf.
Easy sales terms and favorable foreign policy stances
will also continue to benefit West European suppliers
in selected sales. For example, according to US
Embassy and defense attache reporting:
? French technicians and advisers to the Cameroonian
Army have pointed to the delay in shipment of 24
V-150 APCs because of payment arrearages as an
example of US unreliability. Cameroonian officers
have now requested a demonstration of French
vehicles.
? Oman previously purchased British Chieftain rather
than US M60 tanks under pressure from British
military advisers to the Omani Army.
? Saudi leaders have told US officials that they
sometimes prefer to purchase French rather than
US vehicles because of the lack of sales restrictions
and Paris's pro-Arab Middle Eastern policy.
On the other hand, West European manufacturers of
equipment for armored vehicles face brighter pros-
pects. The demand for main guns, engines, and fire-
control systems for vehicles being built or upgraded in
Third World countries will be strong throughout the
decade. We also expect reasonably priced new equip-
ment automatic loaders, composite armor, high-
velocity light guns, and laser rangefinders to be
increasingly introduced into Third World inventories.
The large number of West European firms will lead to
increased competition, but their involvement in pro-
viding similar equipment to the aerospace and naval
sectors should cut costs and alleviate the pressure on
profits.
The depressed Third World niarket is already de-
creasing the competitiveness of the underused West
European armored vehicle industry. Producers are
being squeezed by falling domestic and intra-
European orders and slackened international demand.
Press sources, for example, report that Renault of
France suffered a drop in profits of $2 billion in 1983
Secret
because of declining foreign sales. The situation is
especially troublesome for West German producers
constrained from selling to the Third World. Accord-
ing to press defense atta-
ches, West European governments and producers are
taking initial steps to ease the problem by:
? Cutting employment. Armored industry employ-
ment in France, the United Kingdom, and West
Germany has been allowed to drop by 17 percent
since 1978. Vickers, Ltd. of the United Kingdom
plans no further hiring in order to streamline the
current work force. The Royal Ordnance Factory
also will probably reduce employment once produc-
tion of main guns for Egypt's T-55 tanks the main
activity at the Nottingham plant?ends in 1985. In
West Germany, Thyssen-Henschel plans to reduce
its workweek in 1985 if a major foreign contract is
not secured.
? Reorganizing. London is selling the Leeds and
Nottingham plants of the Royal Ordnance Factory
into private ownership. The British Government also
recently contributed grants of more than $3 million
for consolidation of the vehicle divisions of Vickers,
Ltd. into a new plant. Creusot-Loire and Renault of
France may merge their armored vehicle divisions
into a firm specializing in wheeled APCs and RVs
to meet the increasing Third World demand for
these vehicles. Panhard?another wheeled-vehicle
producer may also be folded in. In Italy, Oto
Melara has improved production efficiency by es-
tablishing common assembly lines for its armor and
naval products.
? Placing domestic orders. Governments are placing
selected orders to help maintain employment in
companies competing for the dwindling number of
foreign contracts. Italy recently authorized OTO-
Melara and Fiat to design a new tank based on the
OF-40 for the Army rather than purchase the West
German Leopard II. Spain also has opted to develop
a new tank instead of acquiring a US or West
German model. Madrid has received no foreign
orders for the French-licensed A MX-30.
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? Loosening export restrictions. West German ar-
mored vehicle exporters have been hindered by
government definitions of "offensive" vehicles. Al-
though tanks still fall under this category, APCs
and RVs with light armament are increasingly sold
as "utility" or "internal security" vehicles. The
TM-170, Condor, and UR-416 APCs are now ex-
ported under these designations.
? Improving aftersales support. Producers are up-
grading support services to retain current markets
and to keep the door open for future sales. Panhard
is offering contracts to provide a permanent in-
country team of technicians to maintain vehicles it
sells. Vickers, Ltd. has also initiated an across-the-
board improvement in sales support including in-
country training and tank maintenance at its own
facilities.
Implications for the United States
The future Third World armored vehicle market
carries several economic and security implications for
the United States. The improved capabilities of Third
World armored forces could contribute to regional
instability particularly in North Africa and the Le-
vant and the Persian Gulf to threaten US interests.
In addition, the softer market will affect NATO
armored vehicle procurement plans by increasing the
cost of these vehicles for West European armies.
Finally, we expect the US position as the second-
leading supplier of armored vehicles to shrink. US
armored vehicle equipment producers, however, will
benefit from continued strong demand
Regional Instability. The increased acquisition of
modern Soviet vehicles by a number of states some
in areas beset by instabilities will allow a greater
number of Third World armies to threaten neighbor-
ing forces and destabilize regional military balances.
Soviet provision of large numbers of improved T-72
tanks and BMP-2 I FVs to several clients in North
Africa and the Levant and India, for example, will
give their armored forces a qualitative advantage over
other regional forces. We believe procurement of this
weaponry particularly by Iraq, Libya, and Syria?
gives their armies a greater ability to challenge
regional forces during crises. Introduction of the T-72
tank into their inventories?given crews with good
13
training could pose the greatest risk because of its
reportedly good performance against US- and British-
made armor in the Iran-Iraq war.'
Despite these improvements, in our judgment, most
Third World armies will retain only a limited ability
to conduct offensive armored operations. We believe
only the Indian, Iraqi, Israeli, and North and South
Korean armies have the standardized inventories,
trained personnel, and air support necessary to con-
duct a successful armored offensive against their
neighbors. Limited armored operations against small-
er regional armies can also be mounted by the Libyan
Army against Chad and Tunisia and by Algerian
forces against Morocco. Standardization problems
encountered in switching to US and Soviet-style
armor, however, will limit the capabilities of the
Egyptian and Iranian armies, respectively. Acquisi-
tion of new armor will also do little to enhance the
offensive capabilities of other major Third World
armored forces because of persistent problems in:
? Training. Saudi ar-
mored units are inexperienced and suffer from
severe deficiencies in training and exercises. The
Algerian Army is also at a qualitative disadvantage
to the Libyan and Moroccan armies because of its
lack of combat experience, according to Defense
Department reporting.
? Logistic support. Libyan armored operations are
greatly hindered by inefficient resupply efforts and
lack of spare parts,
faces similar
problems because of a poorly developed road
network.
The successful Iraqi use of the T-72 tank is due largely to the
superior training of Iraqi crewmen over their Iranian counterparts.
Against tank crews of equal or better skill, the T-72's effectiveness
would probably drop.
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In the next decade these armies will make advances in
some of these areas, but we expect the improved
offensive capabilities generated by such gains to be
matched by continued improvement in the perfor-
mance of other regional forces.
NATO Armor Procurement. The failure of West
European governments to streamline their armored
vehicle industries will increase the cost of their prod-
ucts for domestic armies. West European govern-
ments will maintain the capacity to build armored
vehicles for their own militaries, but this political
decision will preserve many relatively inefficient pro-
ducers. The problem will be particularly acute among
APC and RV manufacturers because of their large
number--more than 20 in 12 countries and the
continuous entry of new firms into the industry such
as Lohr of France and Porsche of West Germany.
Smaller foreign sales will increase the cost of West
European vehicles as factories slow production to
maintain employment. The more expensive vehicles
acquired by domestic armies will then absorb a larger
portion of already strained defense budgets. NATO
armor procurement plans will be affected because
armies will acquire fewer vehicles for their money or
be forced to increase funding to obtain the same
number.
US Sales. We expect the US role in the market for
new vehicles to decrease significantly because of the
lack of marketable models and increasing foreign
competition. The M60 tank is scheduled to end
production in early 1985,
no prospects for additional orders. The only
US production tank will be the MI whose high
price---more than $2 million?operational complex-
ity, and various technology-transfer restrictions have
severely limited Third World sales prospects. Produc-
tion of the Rapid Deployment Force Light Tank?
favorably reviewed by Venezuela is several years
off, with initial deliveries to the US Army. US
producers can offer only four APC models the
M113, Piranha, V150/300, and Dragoon?in a mar-
ket saturated with comparable West European mod-
the M113
is becoming
US APC producers hope to offset declining sales by
securing a major Saudi contract for 1,600 Piranha
APCs and by offering vehicles with new designs.
General Motors is fa-
vored to win the $940 million Piranha contract. A
decision by Riyadh is expected soon. New designs are
being evaluated by FMC Corporation, which is devel-
oping an M113 APC with a lower silhouette and
thicker armor. FMC is also trying to break into the
Third World market for wheeled vehicles with a new
RV being designed with Brazil. These models, how-
ever, will not be available before 1988. US APC and
RV manufacturers also expect strong competition
because they are 10 to 15 years behind their West
European and Third World counterparts in the use of
low-profile designs, wheeled suspension systems, and
heavier armor.
The United States will retain a market presence by
supplying used vehicles to US clients, but this role will
also gradually diminish. The M113 APC and the
M48A5 tank will be offered in this market. We
believe US clients will acquire fewer surplus US
vehicles because of their higher prices.
US equipment manufacturers, on the other hand, will
continue to be competitive in the Third World market.
the demand for new
engines and fire-control systems to upgrade existing
inventories is increasing. US companies will face stiff
competition from West European firms, but the con-
tinued expansion of the Third World upgrade market
should maintain sales throughout the next decade.
els.
APC the principal US export vehicle
less competitive because of its old design and light
armor protection. Third
World purchases of the M113 APC dropping steeply
after 1987
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Appendix A
The Structure of the
Armored Vehicle Market
The Third World armored vehicle market is serviced
by a three-tiered structure of producers, equipment
manufacturers, and armies disposing of used vehicles.
Armored vehicle production---unlike naval and com-
bat aircraft manufacture requires relatively unso-
phisticated technologies and is less costly. It is an
attractive option for states with even a modest defense
production capability because labor is the primary
input, for example,
reports that South African production of the Ratel
RV requires no computerized machinery and four
hulls can be turned out daily. More than 20 countries
produce armored vehicles for export (table 3).
Armored vehicles produced for export run a wide
gamut of capabilities. The US MI Abrams, Soviet
T-72, and West German Leopard II regarded by
industry sources as the world's most capable tanks
have the highest mobility and firepower (figure 11).
The British Challenger and Soviet-style T-54/55
tanks have less mobility but good armored protection.
Several other tanks--including the British Vickers
Mk 3, French AMX-30, and Italian OF-40?are
lighter models, which meet the limited requirements
of Third World armies. APCs and RVs range from
high-speed, tracked vehicles with rapid fire guns
such as the French AMX-1 OP and British Simba
APCs to lightly armed vehicles for internal securi-
ty including the Brazilian Jararaca RV and West
German UR-416 APC.
Large domestic markets have reduced the reliance of
US, Soviet, and East European armored vehicle man-
ufacturers on foreign sales. More than 70 percent of
the production of these manufacturers is fielded with
national militaries. West European manufacturers
have depended on large domestic and intra-European
orders. Press sources report that, among other suppli-
ers, Brazil exports 95 percent of its armored vehicle
production because of small domestic needs. North
Korea and China provide inexpensive, Soviet-style
armor to Iran and Iraq and clients in Sub-Saharan
Africa.
15
The engines, fire-control systems, and armament that
comprise 70 percent of the value of an armored
vehicle are produced by almost 30 US and West
European manufacturers (table 4). These firms are
seldom operated by vehicle producers, and most are
involved in the manufacture of similar systems for
aircraft and naval vessels. Thomsom-CSF of France
and SABCA of Belgium, for example, produce radars
for aircraft as well as tank fire-control systems. In
addition to providing components for new vehicles
being manufactured in the United States, Western
Europe, and the Third World, equipment producers
maintain sales by refitting existing inventories. A tank
is usually upgraded three times in its average 25-year
lifespan, and an APC or RV twice. Third World
armies also purchase older used vehicles and extend
their life by several upgrades, providing additional
business for equipment manufacturers.
Eastern Europe and the Soviet Union have been the
major suppliers of used armored vehicles to the Third
World (table 5). Frequent replacement cycles have
ensured a continuous flow of used vehicles, mainly
Soviet-style tanks supplied by Czechoslovakia, Po-
land, and the Soviet Union. These vehicles are offered
at bargain-basement prices a used Soviet T-55 tank
is priced two-thirds less than a US Korean war tank
inflating the size of the market because consumers
acquire them in large numbers. West European states
supplied surplus vehicles to traditional customers in
the Persian Gulf and North Africa and the Levant,
including Lebanon, Morocco, Oman, and Somalia.
The United States has provided some used vehicles to
Israel, Pakistan, and Thailand.
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Table 3
Third World: Armored Vehicles Exported, 1974-83
Country
Type ,
Entered
Weight
Troop
Armament L
Production
(tons)
Capacity1,
Austria
SK-105 LT
1971
20
3
1- by 105-mm gun
4K7FA APC
1977
16
10
1- by 7.62-mm MG
1- by 12.7-mm MG
Belgium
SIBMAS APC
1980
18
14
Various
Brazil
Cascavel RV
1974
13
3
1- by 90-mm gun
1- by 7.62-mm MG
Jararaca RV
1974
6
3
1- by I2.7-mm MG
Urutu APC
1974
14
14
Various
China
Type-69 MBT
1969
40
4
I- by I05-mm gun
1- by 7.62-mm MG
Type-59 MBT
1950s
40
4
1- by 100-mm gun
1- by 7.62-mm MG
Type-62 LT
1950s
20
4
I- by 85-mm gun
I- by 7.62-mm MG
Type-63 LT
1950s
23
4
1- by 85-mm gun
1- by 7.62-mm MG
T-531 APC
1960s
14
14
1-by 12.7-mm MG
Ciechoslovakia
T-54/55 MBT
1958
40
4
I- by 100-mm gun
1- by 7.62-mm MG
T-62 MBT
1960s
44
4
I- by I15-mm gun
I- by 7.62-mm MG
OT-62 APC
1962
18
20
1- by 14.5-mm MG
OT-64 APC
1964
16
20
1- by I4.5-mm MG
Egypt
Walid APC
1967
9
Unknown
I- by 7.62-mm MG
France
AMX-30 MBT
1966
40
4
I- by 105-mm gun
1- by 20-mm cannon
AMX-I3 LT
1952
17
3
1- by 90-mm gun
1- by 7.5-mm MG
AML-60/90/245 RV
1961
6
3
I- by 90-mm gun
I- by 7.62-mm MG
AMX-IORC RV
1978
17
4
I- by 105-mm gun
I- by 7.62-mm MG
VBC-90 RV
1970
14
3
1- by 90-mm gun
I- by 7.62-mm MG
FRC-90 RV
1978
9
3
1- by 90-mm gun
1- by 7.62-mm MG
M-3 APC
1971
7
12
Various
VAB APC
1976
16
12
Various
VLRA APC
1960s
8
12
Various
Hungary
OT-65 RV
1964
8
6
1- by 7.62-mm MG
Israel
RBY Mk 1 RV
1975
4
8
2- by 7.62-mm MG
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Table 3 (continued)
Country
Type
Entered
Weight
Troop
Armament )
Production
(tons)
Capacity h
Italy
OF-40 MBT
1978
40
4
1- by 105-mm gun
1- by 7.62-mm MG
6616 RV
1972
9
3
1-by 20-mm cannon
1- by 7.62-mm MG
VCC-1 APC d
1963
13
9
1- by 12.7-mm MG
1- by 7.62-mm MG
6614 APC
1970s
9
11
1-by 12.7-mm MG
Netherlands
YP-408 APC
1964
13
12
1- by I2.7-mm MG
North Korea
T-55 MBT
1973
40
4
- by 100-mm gun
- by 7.62-mm MG
T-62 MBT
1978
44
4
- by 115-mm gun
- by 7.62-mm MG
Poland
T-54/55 MBT
1956
40
4
- by 100-mm gun
- by 7.62-mm MG
Portugal
Chaimite APC
1960s
8
11
Various
Romania
T-54/55 MBT
Unknown
40
4
- by 100-mm gun
- by 7.62-mm MG
South Africa
Eland RV ,
1960s
6
3
- by 90-mm gun
- by 7.62-mm MG
Rate! APC
1976
20
10
- by 2-mm cannon
- by 7.62-mm MG
Switterland
Roland APC
1964
5
6
I- by 7.62-mm MG
Piranha APC
1976
14
15
Various
Grenadier APC
1967
7
9
I - by 20-mm cannon
United Kingdom
Challenger MBT I
1982
66
4
- by 120-mm gun
- by 7.62-mm MG
Chieftain MBT
1963
60
4
I - by 120-mm gun
- by 7.62-mm MG
Centurion MBT g
1946
57
4
I - by 105-mm gun
- by 7.62-mm MG
Vickers Mk 3 MBT
1965
43
4
- by 105-mm gun
- by 7.62-mm MG
Scorpion RV
1972
9
3
1- by 90-mm gun
- by 7.62-mm MG
Saladin RV
1958
13
3
I - by 76-mm gun
- by 7.62-mm MG
Scimitar RV
1974
9
3
- by 30-mm cannon
- by 7.62-mm MG
Ferret RV
1952
6
3
- by 7.62-mm MG
Fox RV
1972
7
3
1- by 30-mm cannon
1- by 7.62-mm MG
Sultan RV
1977
10
6
I- by 7.62-mm MG
Saracen APC
1953
11
12
2- by 7.62-mm MG
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Table 3 (continued)
Third World: Armored Vehicles Exported, 1974-83
Country
Type
Entered
Weight
Troop
Armament L
Production
(tons)
Capacity h
United States
M1 MBT1
1980
60
4
1-by 105-mm gun
1- by 7.62-mm MG
M60 MBT
1960
54
4
1- by 105-mm gun
1- by 7.62-mm MG
M48 MBT
1952
48
4
1- by 105-mm gun
1- by 7.62-mm MG
M47 MBT
1953
51
5
1- by 90-mm gun
1- by 7.62-mm MG
M113 APCs
1960
12
13
1- by 12.7-mm MG
V-I50/300 APC
1964
11
12
1- by 20-mm cannon
1- by 7.62-mm MG
Dragoon APC
1979
14
9
1- by 20-mm cannon
1- by 7.62-mm MG
Bradley IFV h
1981
24
9
1- by 25-mm cannon
1- by 7.62-mm MG
Soviet Union
T-72 MBT
1972
45
3
1-by 125-mm gun
1- by 7.62-mm MG
T-62 MBT
1961
44
4
1- by 115-mm gun
I- by 7.62-mm MG
T-54/55 MBT
1949
40
4
1-by 100-mm gun
1- by 7.62-mm MG
IS-2/3 MBT
1943
51
4
1- by 122-mm gun
3- by 7.62-mm MG
T-10 MBT
1957
57
4
I- by 122-mm gun
1- by 12.7-mm MG
T-34 MBT
1940
35
5
1- by 85-mm gun
I- by 7.62-mm MG
PT-76 LT
1952
15
3
1- by 76-mm gun
1- by 7.62-mm MG
BRDM-1/2 RV
1959
1- by 7.62-mm MG
1-by 14.5-mm MG
BMP-1 APC
1967
15
11
I- by 73-mm gun
1- by 7.62-mm MG
BTR-152 APC
1951
11
19
2- by 14.5-mm MG
BTR-40/50/60 APC
1951
11
18
1- by 14.5-mm MG
West Germany
Leopard II MBT r
1978
61
4
1- by 120-mm gun
1- by 7.62-mm MG
UR-416 APC
1969
8
10
1- by 7.62-mm MG
Condor APC
1978
13
12
1- by 20-mm cannon
1- by 7.62-mm MG
TM-170 APC
1979
10
14
Optional
Yugoslavia
T-54/55 MBT
1950s
40
4
1-by 100-mm gun
1- by 7.62-mm MG
M60 APC
1965
12
13
I- by 7.92-mm MG
LT--light tank.
MBT---main battle tank.
APC?armored personnel carrier.
RV?reconnaissance vehicle.
IFV--infantry fighting vehicle.
h Including crew.
Secret
, Designates heaviest armament that
antiaircraft and antitank weapons.
d Produced under US license.
e Produced under French license.
I Evaluated by Saudi Arabia.
All models.
h Under consideration by Bahrain.
18
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Figure 11
Firepowera and Mobility of Selected Armored Vehicles
? Tanks
? APCs and RVs
Speed (km/h)
120
Jararaca RVSimba
APC
Cascavel RV
100
0
UR-4I6 APC
?
Scorpion
RV
AMX-IORC
?
RV
80
AMX-10P
APC
0
BMP
CO
-1 APC
AMX-30
SK-105
M-1 Leopard
?
. '
II
0 eT-72
0AMX-32
60
Mk3
?
T54/5500
0E-40
?
M-60
0 Challenger
40
20
20 40 60 80
a Designates basic armament and excludes machinegun if larger
caliber gun also mounted.
304882 2435
Armament (mm)
100
120
140
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Table 4
Leading Western Producers of
Armored Vehicle Equipment
Engines
Belgium
France Poyaud
Renault
Badouin
Grossal
Italy Fiat
OTO-Melara
Switzerland
United
Kingdom
United
States
Perkins
Rolls-Royce
Garrett
Cummins
Detroit-Diesel
Teledyne
Continental
Avco- Lycoming
Fire Control Armament a
SABCA Cockerill
OIP Optics Mecar
Thomson-CSF GIAT
SEIM Hispano-Suiza
CILAS SAMM
Oerlikon
Marconi, Ltd. Alvis, Ltd
Barr and Stroud
Hughes Cadillac-Gage
Hughes
a Excluding machineguns.
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Table 5
Third World: Purchases of Used
Armored Vehicles by Region, 1974-83
North Africa
Levant
Sub-Saharan Persian
Africa Gulf
Latin
America
South
Asia
Southeast
Asia
East
Asia
Total
Total
8,618
4,835
6,395
1,602
2,840
862
1,161
26,313
Soviet Union
4,924
3,381
4,130
732
1,438
624
260
15,489
Tanks
3,030
2,229
2,552
624
859
564
260
10,118
APCs and RVs
1,894
1,152
1,578
108
579
60
0
5,371
Eastern Europe
1,946
22
910
68
0
0
50
2,996
Tanks
1,946
22
852
22
o
0
50
2,892
APCs and RVs
0
0
58
46
0
0
0
104
United States
1,286
0
24
765
160
133
23
2,391
Tanks
1,256
0
0
765
130
133
23
2,307
APCs and RVs
30
0
24
0
30
0
0
84
Western Europe
299
128
655
37
30
35
43
1,227
Tanks
199
100
655
37
30
15
43
1,079
APCs and RVs
100
28
0
0
0
20
0
148
Other
163
1,047
616
0
636
55
398
2,915
Non-Communist ,
163
790
556
0
60
40
11
1,620
Tanks
59
517
415
0
30
40
8
1,069
APCs and RVs
104
273
141
0
30
0
3
551
Communist b
0
257
60
0
576
15
387
1,295
Tanks
0
239
60
0
576
15
355
1,245
APCs and RVs
0
18
0
0
0
0
32
50
, Includes Argentina, Brazil, Egypt, India, Iraq, Jordan, Kuwait,
Morocco, Saudi Arabia, South Africa, South Yemen, and United
Arab Emirates.
b Includes China, Cuba, Libya, North Korea, and Vietnam.
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Appendix B
Market Variables
Although financial problems and the end of modern-
ization cycles will be the principal causes of the softer
Third World armored vehicle market, several other
factors could further reduce sales. The upgrading of
current inventories, acquisition of portable weapons
and helicopters to fill armored roles, and the increas-
ing number of countries producing their own vehicles
may limit planned purchases.
L pgrading
The refurbishment and upgrading of vehicles already
in the field is the most likely cause of a further drop in
unit purchases,
Funding shortages are forcing Third World armies to
upgrade current inventories rather than purchase new
vehicles. A typical tank upgrade with a new engine
and fire-control system costs about $500,000,
Several companies also offer
upgrade packages including installation and spares
support. most Third
World armies are upgrading their vehicles with US
and West European equipment:
? Israel has upgunned its Soviet-made T-54/55 tank
fleet with British 105-mm guns manufactured in
Israel (figure 12).
? Colombia recently updated its World War II?vin
tage M-8 RV fleet with US armor plating and
machineguns.
? Pakistan is installing Belgian fire-control systems in
its Chinese-made T-59 tank inventory.
? The Pakistani Army plans to repower its US-made
M113 APC fleet with US diesel engines.
? India plans to upgrade its Vijiyanta tank fleet with a
Western-made fire-control system and engine.
? The Egyptian Army is reengining its Soviet-made
BM P-1 APC inventory with a French powerpack.
Security and performance factors may sometimes
impact on upgrading programs. In a few cases, Third
World armies seem skeptical of the degree to which
upgrading improves their armored capabilities. The
bombing of the US Embassy in Beirut, for example,
prompted the Kuwaiti National Guard to purchase
new US V-150/300 APCs rather than upgrade its
current inventory.
23
Upgrading Companies
A variety of Western and Third World firms are
offering complete armored vehicle upgrade programs.
Packages usually include a new engine, fire-control
system, and larger caliber main gun. The company
purchases the equipment from the manufacturer and
stores it in its own depot. The firm then Qffers to
install the components at a per vehicle cost. By
centralizing the upgrade process, these firms reduce
package costs and create a single source for spares
support. The major companies in the field are:
? NAPCO Industries Incorporated (United States).
? Teledyne Continental Motors Corporation (United
States).
? Bernardini (Brazil).
? NIMDA (Israel).
? Flensburger Fahrzeugbau-Gesellschaft (FFG
West Germany). 25X1
These .firms usually focus on countries seeking to
modernize aging US-, British-, and Soviet-made in-
ventories because compatible components are readily
available.
? Teledyne Continental Motors recently, won a con-
tract worth almost $1 billion to completely refit
T-54155 tanks in the Egyptian inventory. Cost per
vehicle is $800,000.
? FFG and Bernardini are competing for the contract
to refit M4I tanks in the Taiwanese Army inven-
tory with new engines and fire-control systems.
? NIMDA is seeking foreign orders from operators of
M I 13 APC fleets to upgrade them to M 1 13A1
standards with a new engine.
? Teledyne Continental is modernizing Jordan's Cen-
turion tank fleet with a new engine, larger caliber
gun, and fire-control system.
? FFG and NAPCO Industries are competing for a
reengining contract for M4I tanks in the Thai
Army inventory.
? NAPCO is negotiating with Pakistan to refit its
M48 tank inventory with a new engine and fire-
control system.
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Figure 12. This Soviet-made T-55 tank has been Defence Materiel ?
upgunned with a British 105-mm gun replacing
the standard 100-mm gun.
upgrade programs sometimes are also delayed be-
cause Third World armies prefer to wait until the
equipment has demonstrated good performance in
another army's inventory.
Third World Production
The increasing number of Third World countries
producing their own vehicles could also shrink the
export market. in 1975
only Brazil produced armored vehicles of domestic
design. Several other countries?Israel, North Korea,
South Africa, and South Korea?have since made the
jump from licensed assembly to production of indige-
nously designed APCs, RVs, and tanks.
India also plans to use its tank
manufacturing plants to produce its own main battle
tank. Other nations are taking initial steps to develop
armored vehicle industries:
South Korean techni-
cians are participating in the development of the
SK-1 tank with their US counteroarts
? Taiwan
will soon begin modifying 450 of its US-made M48
tanks with M60 hulls as a first step toward produc-
ing its own tanks.
? Indonesia has moved forward its production plans
by introducing an APC using the chassis and engine
of a West German UNIMOG truck, accordina to
the
recently developed an APC based on the
chassis of a dump truck that it will place in
production next year.
We doubt that these countries, however, will move on
to totally indigenous production of armored vehicles
in the next decade. Many Third World states can
Secret
fabricate hull and turret sections, but very few possess
the skilled labor pool and technologies to design
bodies or manufacture operational components, arma-
ment, and fire-control gear. These components instead
must be acquired from Western suppliers. Financial
problems will also preclude capital investment to
reduce this dependence on foreign sources. In any
case, Third World
states would forgo production of sophisticated equip-
ment because they see no gain in entering such a
competitive market once domestic needs are met.
These factors have prompted India, for example, to
adopt a
Alternative Systems
The use of helicopters in combat by the Iranian, Iraqi,
Israeli, and Soviet Armies points to their utility over
armored vehicles in troop-transport and antiarmor
roles, helicopters can be
superior to armored vehicles because they can:
? Deploy faster. Helicopters are not hindered by
rough terrain or vulnerable to passive ground-based
defenses, such as mines and barricades.
? Carry a larger payload. Transport helicopters can
ferry up to 35 soldiers with equipment to the
battlefield. APCs and RVs usually carry 10 to 15
men.
? Attack from long range. Attack helicopters armed
with guided antiarmor rockets can fire from stand-
off positions and escape quickly. This standoff capa-
bility allowed the Israeli Army to successfully use
its US-made Cobra helicopters armed with TOW
missiles against Syrian armor in the Lebanon war.
We doubt, however, that a large shift from armored
vehicles to helicopters will occur.
armored vehicles play the central role in the
full range of ground missions tasked to Third World
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armies. Their superior survivability even under in-
tense tiring and their firepower capacity also give
them better endurance in battle than other weapon
systems.
it withstands ground fire and makes
few trips to rear areas for ammunition replenishment.
In addition, attache and Defense Department report-
ing indicates that armored vehicles are highly prized
items to:
? Display military prestige. Libya acquires excessive
amounts of Soviet vehicles for parade purposes. The
Paraguayan Army recently featured its 50 new
Brazilian Cascavel RVs in a parade to demonstrate
the modernization of the Army.
? Maintain a presence in disputed areas. Peru plans
to deploy its new Soviet T-72 tanks along its
southern border to counter Chile's armor buildup.
Purchases of portable weapons to fill antiarmored
roles now slated to armored forces may slightly reduce
sales. Military officers report that French-made HOT
and Milan missiles were used effectively by Syrian
soldiers against Israeli armor in the Lebanon war
because they could be moved quickly and left no
launch signature. Iranian infantry armed with hand-
held antiarmored weapons have had similar success
against Iraqi tanks. Large numbers of these inexpen-
sive weapons can be purchased for diffusion among
small infantry squads to avoid large-scale attrition of
antiarmored defenses. We believe that sales, however,
will be limited to the few Third World armies with
large infantry forces because portable weapons must
be fired from exposed positions.
25
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Appendix C
Changing Needs
Lighter Vehicles
Third World armies are beginning to consider up-
gunned APCs and RVs and light tanks to replace or
supplement main battle tank inventories.
defense attaches note that Third World
armies view the latest generation of main battle tanks
as ill suited for their terrain and road conditions. The
for example, reports that
Chinese-made T-62 tanks in the Zairian inventory
destroy roads and delay military convoys. Less expen-
sive APCs and RVs, however, can perform a tank's
antiarmored role by mounting a main gun. Modern,
easily maintained light tanks well suited for harsh
terrain and climate conditions are also being evaluat-
ed by some Third World armies.
Brazil and Italy
are also developing tanks under 30 tons for the export
market.
Several Third World armies have also shown an
interest in I FVs designed to provide increased fire
support for advancing infantry and armor,
I FVs are more
mobile than most tanks and are equipped with a rapid
fire, chain gun or cannon and side ports for infantry-
men to fire their weapons from inside the vehicle
(figure 13). Bahrain, Kuwait, and Saudi Arabia plan
to evaluate the US Bradley and West German
Marder I FVs. Kuwait also plans to review the British
MCV-80 I FV. West European IFV manufacturers
have attempted to make their products more market-
able by standardizing them with the operational
components of earlier, widely exported APCs and
RVs.
Few Sales
We do not, however, expect a large shift toward
upgunned APCs and RVs, I FVs, and light tanks. The
market for these vehicles has been slow to develop
with Third World armies showing little interest in
similar models available since 1976. For example,
while several countries Iran, Panama, Saudi Arabia,
Thailand, and Venezuela have reviewed the Argen-
tine TAM light tank, none has placed orders for the
Upgunned APCs and RVs
Many producers of APCs and RVs envision that their
versatile products can supplement and, in some cases,
replace tank inventories. APCs and RVs equipped
with main guns ranging from 30 mm to 105 mm--
are being offered will! a perceived demand for
vehicles with high firepower but which are less expen-
sive and easier to maintain than tanks. For example,
according to open sources:
? French firms offer several RV series AML, AMX,
EBR, and VBC----with 90-mm guns: the AMX-
IORC mounts a I05-mm gun.
? The Soviet BMP-1 APC is equipped with a 73-mm
gun.
? The Brazilian Cascavel RV mounts a Belgian-made
90-mm gun, and the Urutu APC is equipped with an
indigenously designed 90-mm cannon.
? The British Scorpion RV is offered with a 30-mm,
76-mm, or 90-mm gun.
? Switzerland recently introduced a Piranha APC'
that mounts a I05-mm gun.
Manufacturers have had some initial success market-
ing APCs and RVs equipped with main guns. Hondu-
ras, for example, recently purchased 72 British Sala-
din RVs with 76-mm guns to counter the larger
Nicaraguan tank inventory,
Several Western APC and RV manufacturers are
involved in programs to increase the firepower and
performance of older vehicles. France's Hispano-
Suiza?one of the most active refiners with seven
turrets for application on vehicles in the 5- to 15-ton
range recently' upgraded French RVs purchased by
Mexico with its Lynx 90-mm gun. Integrated gun
turrets are also being developed for refitting onto
lighter platforms unable to withstand high gun recoil
forces. Rheinmetall of West Germany has developed
a low recoil 105-mm gun for refitting onto APCs and
RVs in the 14-ton range. The Royal Ordnance Fac-
tory of the United Kingdom and the US Cadillac-
Gage Corporation also recently introduced a jointly
designed I05-mm gun turret for vehicles over 20 tons.
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Jane v Pocket Book Modern Tanks and
Armoured Fighting Vehicles C)
Jane's .4rmour and .4rtillerv, 1484-85 C)
Figure 13. .4 series of new-generation 114is (top
to bottom). the US Bradley. British MC V-80, and
Soviet BM P-2.
Secret
vehicle. Only a handful of countries?Honduras,
Mexico, Morocco, and Zimbabwe?has purchased
APCs and RVs equipped with main guns. Only India
plans to place a major order of IFVs, about 1,000
Soviet BMP-2s in the next several years.
several factors explain the luke-
warm response:
? Most Third World armies are reluctant to purchase
upgunned APCs and RVs or light tanks until they
have been proved in combat.
? Western and Soviet I FVs are mechanically complex
and require maintenance equal to most tanks. US
Embassy officials report that this will probably
convince Bahraini officers to cancel a demonstration
of the US Bradley IFV.
? Third World armies view these vehicles as less
capable in armored protection and firepower than
their present tank forces.
? Few Third World armies face the modern battle-
field conditions or have power-projection require-
ments for which upgunned APCs and RVs and I FVs
were originally designed.
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Appendix D
Third World: Projected Armored
Vehicle Purchases, 1985-94
Tanks
APCs/IFVs/RVs
Total
Latin America
1,367
1,415
2,782
Argentina
50 a
350 a
400
Chile
225
o
225
Colombia
12
86
98
Cuba
480
320
800
Dominican Republic
o
40
40
Ecuador
86
17
103
El Salvador
51
18
69
Guatemala
13
33
46
Haiti
5
6
11
Mexico
130
133
263
Nicaragua
90
206
296
Paraguay
21
o
21
Peru
125
95
220
Uruguay
39
39
78
Venezuela
40
72
112
Sub-Saharan Africa
2,119
4,610
6,729
Angola
450
1,028
1,478
Benin
0
7
7
Cameroon
0
28
28
Central African Republic
0
4
4
Chad
35
191
226
Congo
50
64
114
Equatorial Guinea
0
10
10
Ethiopia
630
1,439
2,069
Gambia, The
0
4
4
Ghana
0
20
20
Guinea
30
40
70
Guinea-Bissau
10
4
14
Ivory Coast
6
0
6
Liberia
0
12
12
Madagascar
28
28
Mali
37
40
77
Mozambique
270
617
887
Niger
0
10
10
Nigeria
0
104 a
104
Senegal
0
30
30
Comments
Cuba will be the largest customer as it updates its aging
Soviet-made inventory. Chile recently completed deliveries
of Swiss APCs but?along with Mexico?will be replacing
its World War II?era US-made Sherman tank fleet. We
expect El Salvador to receive mainly used US vehicles as it
modernizes the Army to combat the insurgency. Peru is also
beginning a buildup of its armored forces to counter the
Chilean military.
Angola, Ethiopia, and Mozambique together will receive
about 4,400 Soviet vehicles in expanding their armored
forces to meet active threats. We expect at least half of these
additions to be older surplus vehicles because of severe cash
shortages. Several smaller armies?in Chad, Sudan, and
Nigeria?are augmenting their aging inventories with US
and West European models. The first two are seeking
mainly used vehicles. South Africa will fill its APC and RV
needs from domestic production but probably will try to buy
West European tanks to replace its older British-made
Centurion and Comet fleet.
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Third World: Projected Armored (continued)
Vehicle Purchases, 1985-94
Tanks
APCs/IFVs/RVs
Total
Somalia
71
582
653
South Africa
250
0
250
Tanzania
60
50
110
Togo
7
13
20
Uganda
13
144
157
Upper Volta
0
10
10
Zaire
200
131
331
North Africa and the Levant
2,930
3,794
6,724
Algeria
100
76
176
Egypt
753
1,266
2,019
Israel
0
124
124
Jordan
141
763
904
Lebanon
35
191
226
Libya
1,000
510
1,510
Morocco
92
202
294
Syria
770
600
1,370
Tunisia
39
62
101
Persian Gulf
4,414
4,002
8,416
Bahrain
12
16
28
Iran
500
490
990
Iraq
2,500
1,170
3,670
Kuwait
200
122
322
North Yemen
102
37
139
Qatar
0
27
27
Saudi Arabia
300
1,600
1,900
South Yemen
800
410
1,210
United Arab Emirates
0
130
130
South Asia
1,007
1,891
2,898
Afghanistan
200
0
200
Bangladesh
5
0
5
India
300.
1,000.
1,300
Pakistan
502
891
1,393
Southeast Asia
1,154
2,746
3,900
Burma
25
85
110
Cambodia
0
10
10
Indonesia
105
297
402
Laos
25
10
35
Malaysia
0
150
150
Philippines
155
54
209
Singapore
0
75
75
Secret 30
Comments
as it phases
out a similar number of Soviet-made tanks by the late
1980s. Libya will continue to buy large numbers of Soviet
vehicles?now at 230 units annually?partly to enhance its
prestige in the region. We expect Syria to acquire almost
1,400 Soviet vehicles under its continuing modernization
and expansion program. Jordan is receiving US M60s to
modernize its tank forces but will probably outfit its APC
and RV fleet mainly with West European models.
Iran and Iraq are laying the groundwork for a reorganiza-
tion of their postwar armored inventories. Baghdad will
update its tank force with newer Soviet models like the T-72,
and Iran will structure its fleet around Soviet-style models?
tanks supplied by Libya and, possibly, North Korea, and
APCs bought from East European suppliers. Tehran will not
expand its tank forces above the prewar level because of fear
of an Army-coup attempt. Saudi Arabia will modernize two
tank brigades with a new-generation, US or West European
model and will soon sign a major contract to expand its APC
fleet with 1,600 US vehicles.
India will be the major customer, ordering about 300 Soviet
tanks and 1,000 BMP-2 IFVs to continue the expansion and
modernization of its army.
tanks from the United States will probably take precedence
over APC purchases because of limited funding. We expect
the Army to try working around the problem by acquiring
mainly used US APCs.
This will remain a fairly concentrated market with only
Thailand engaged in a major armored buildup to counter
Vietnamese forces in neighboring Cambodia. Bangkok is
leaning toward buying US or West European tanks to
update its aging M41 and M48 fleet but will probably look
to West European suppliers to expand its APC and RV
inventory. We expect smaller armies?in Indonesia, Malay-
sia, and Singapore?to receive mainly US-made Ml 13
APCs being retired from the Australian and New Zealand
Armies.
Declassified in Part - Sanitized Copy Approved for Release 2012/08/17: CIA-RDP90T01298R000200390001-0
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2012/08/17: CIA-RDP90T01298R000200390001-0
Secret
Third World: Projected Armored
Vehicle Purchases, 1985-94
Tanks
APCs/IFVs/RVs
Total
Thailand
664
1,655
2,319
Vietnam
180
410
590
East Asia
715
670
1,385
South Korea
715a
470
1,185
Taiwan
0
200
200
Comments
This region will largely remain a captive US market.
Taiwan plans to extend the operational life of its US-made
M48 tank fleet through an upgrade program but will
probably purchase about 200 US APCs to modernize its
fleet. Although South Korea will fill its APC and RV needs
from domestic production, it will purchase kits from US
manufacturers to build its SK-1 tank based on the MI.
a Includes vehicles produced under license.
31 Secret
Declassified in Part - Sanitized Copy Approved for Release 2012/08/17: CIA-RDP90T01298R000200390001-0
Declassified in Part - Sanitized Copy Approved for Release 2012/08/17: CIA-RDP90T01298R000200390001-0
Secret
Secret
Declassified in Part - Sanitized Copy Approved for Release 2012/08/17: CIA-RDP90T01298R000200390001-0