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Alvis Wins UK Army FCLV Competition (July 18)

Alvis plc is pleased to announce that its UK subsidiary, Alvis Vickers, has today been selected as winner of the competition to supply the Future Command and Liaison Vehicle (FCLV) for the British Army.

Subject to final contract negotiations, Alvis Vickers will receive a contract valued at around £200m to supply almost 500 MLV vehicles. MLV is a 4x4 high mobility light armored vehicle providing protection against small arms fire and mines. The MLV is based on the Iveco LMV vehicle which has been developed for a major Italian Army program.

For the FCLV program Alvis Vickers will install UK mission equipment comprising principally a weapon station, armour pack and communication systems. MLV is a complete family of vehicles around 7 tons incorporating the latest automotive technology. It will be used in a wide range of Command and Liaison roles in the British Army, replacing a variety of older vehicles.

The demonstration phase of the program will run until 2005, and series deliveries will take place between 2006 and 2009. This extends the firm UK order book of Alvis Vickers, the principal current element of which is the Engineer Tank System which will be delivered 2005-2007.

MLV is a modular design which can readily be adapted to meet other requirements both in the UK and for export. Alvis Vickers has signed an agreement with Iveco which provides substantial rights in the export market. The prospects for additional sales of MLV beyond the core FCLV program are therefore good.

The UK MOD also announced today that it would not be continuing with the Multi-Role Armoured Vehicle (MRAV) program into a production phase as the vehicle is no longer considered suited to the changing requirements of the British Army.

The UK will negotiate withdrawal from the program at the earliest opportunity. Any longer term role for Alvis in MRAV will depend on the plans of the German and Dutch partners. In any event it would be a small role in comparison to the work which would have been involved in building vehicles for the UK.

Whilst the UK decision not to implement production of MRAV is a disappointment, Alvis needs to be flexible in the face of customer requirements changing in response to evolving threats.

The UK MOD is in the process of launching a project for a new family of light/medium armored vehicles known as the Future Rapid Effects System (FRES), which will absorb some of the roles previously foreseen for MRAV. Alvis Vickers is well placed to play a leading role in this project, and success in this, together with work on FCLV, will provide a strong medium and long-term UK workload for Alvis Vickers.

Moreover, both the FCLV vehicle and the FRES concept are perceived to be well attuned to the long-term requirements of the export market.

Nick Prest, Chairman and Chief Executive of Alvis plc, commented:

Winning FCLV is a demonstration of Alvis competitiveness and flexibility. It provides good long-term business for Alvis Vickers. Whilst the MOD’s decision not to take MRAV into a production phase is disappointing, Alvis’s prospects in the UK market remain very promising.

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UK Armored Vehicle Orders