Patria took the risk years ago, when others slept – now Germany is paying billions for it

Se looks like Pasi, but sells like carbon monoxide. Patria’s 6×6 crew transport vehicle has risen to the top of the procurement lists of European NATO countries.

On Thursday, the German Defense Forces signed a contract for 876 wagons worth 2.1 billion euros. Half of the contract is a binding transaction and the other half is a call option.

On Wednesday HS told that Britain is coming after with the purchase of up to 1,500 wagons.

So now Patria has the momentum going. At the end of September, the company already had orders for 2.6 billion in the order book. On Thursday, there were even more of them.

Patria’s CEO Esa Rautalingo satisfaction is restrained only by the fact that the reason for the deals is ultimately Russia’s growing threat to Europe.

“It eats away at the feeling a bit. But we focus on taking care of our own box as well as possible,” he says.

Orders have also been received from, for example, Sweden, Ukraine, Latvia and Denmark. But the Germany order is by far the largest of them.

“It’s the most modern and the cheapest.”

What Patria’s wagon has really made such a hit product? It beat Germany’s own strong Rheinmetall, from which the German defense forces usually make their purchases.

From the outside, the wagon resembles the familiar old Pasi cabin. The special quality is not really open to a layman who has not done military service.

“It’s the most modern and the cheapest,” Patria’s CEO Esa Rautalinko seal.

According to Rautalingo, there isn’t even a single modern tool available, and at least not even close to the same price. Patria 6×6 costs “only” one and a half million euros without accessories and customizations.

The Germans were said to have already been caught in the first tests.

What is essential is at least effective and customizable protection against enemy fire. The basic wagon is also very modifiable.

It can be used as an ambulance as well as a platform for a mortar. Germany also buys four different versions. Patria’s Nemo grenade launcher has also been sold.

Although the wagon looks like an old Pasi, there are almost no identical parts. According to Rautalingo, the technology of the chassis, smoothness on the terrain, noise level and driving comfort are on a completely different level.

The wagon also has advanced communication connections, which means that it can be connected to any other cutting-edge technology, such as combating drones.

Since the wagon is designed for Finnish conscripts, it is also easy to drive. And since there is always a shortage of money in Finland, it is designed to be inexpensive to manufacture.

An important selling point has also been that the wagons have been in real use in Ukraine.

Vantage is based, on the other hand, on the fact that Patria took a conscious risk years ago, when there was no information about the war in Ukraine yet. It began developing a completely new, more modern version of the Pas and a new tracked vehicle.

“We thought that this kind of ability would be needed, because we saw that in many countries the equipment was either outdated or there was too little of it.”

Most competitors, on the other hand, slept.

Free some kind of “reciprocal” defense equipment is hardly sold. Some of the F-35 fighters, their nose parts and engines, are built in Finland at the Patria factories.

“The finished fighter is assembled in the USA, but the supply chain of materials and components is very international,” says Rautalinko.

There are many models of partnership. The strollers sold by Patria in Japan are manufactured entirely under license. Patria supplies the Japanese with some parts.

In the case of Germany, “reciprocal sales” means that the assembly of the wagons is mainly done in Germany, at the factories of the three industrial partners.

What does that mean for business and profit sharing?

Iron chain doesn’t go into detail how much of the purchase price of 2.1 billion would end up staying in Finland.

“It depends, for example, on how much of the vehicles are manufactured in Finland.”

In any case, the entire price is recorded as Patria’s turnover, because the company buys the production from German partners. So they are Patria’s contract manufacturers.

In time, it will be possible to determine how the added value is distributed from Patria’s profit development. There would be room for improvement in profitability, as the operating profit percentage was only 7.2 during the first nine months of this year. Last year it was almost 10.

Iron chain became Patria’s CEO six years ago. During that time, the defense equipment company, which seemed a bit run down, has made quite a turnaround.

“What has changed the most is the pace of development and positive risk-taking.”

Half of Patria’s turnover previously came from the service, maintenance, repair and modernization of the defense forces’ equipment.

“That’s what Patria existed for. It’s still our cornerstone and the core of our partnership with the Defense Forces,” says Rautalinko.

Turnover has grown from EUR 508 million in 2019 to EUR 826 million last year, or more than 60 percent. At the end of September, there were already more than 4,000 employees, or 30 percent more than six years ago.

In recent years, the company has also invested in e.g. electronic intelligence systems and drone technology. What can be expected from them?

According to Rautalingo, these are also traded all the time, but the trades are rarely made public.

“Vehicles are the most central to Patria’s growth: 6×6 and a new tracked vehicle, for which orders may not come until 2028-2029. The processes are slow,” Rautalinko says.

Pari in the last year, the industry has been concerned about drones, because they have become such a central part of warfare in Ukraine.

According to Rautalingo, there is a problem with the sale of drones, because technology and drone defense are developing so quickly that no one really wants to buy large quantities of goods that may become obsolete very quickly.

“But there should be ready-made manufacturing capability. If in a crisis you try to leave the world to collect components, it will no longer be possible.”

On the other hand, Rautalinko believes that the importance of drones has been overemphasized in Ukraine.

“Drones became a necessity when other capabilities were lacking. Drones should not be underestimated, but I don’t think they alone will permanently change the picture of warfare,” he says.

Read more: Patria close to another jackpot: Britain placing an order in the billions

Read more: President Stubb for the unveiling of the F-35 fighter jet to the United States

Read more: Iceye received a giant order – Billion stores to come, says the founder