DUBAI – In a workshop in a dusty
industrial area on the outskirts of Dubai, engineers are
stripping down a Toyota Land Cruiser to install armoured
plating, bullet resistant glass and run-flat tyres.
In the aftermath of the “Arab spring” revolts and with the
wealth gap and social unrest rising in many parts of the world,
there is no shortage of rich individuals and governments who
suddenly feel they need a little extra protection.
For companies such as Canada’s INKAS, Britain’s Jankel and
Germany’s Transeco, it has been a lucrative decade. Even with
the Iraq and Afghan wars – the conflicts on which the industry
grew – winding down, there are still deals to be done.
Newer entrant Ares Security Vehicles – founded in 2010 but
largely staffed by industry veterans – says it has a strong and
growing order book.
“This batch of vehicles is going to Iraq,” says Marc
Rouelle, a Belgian engineer now chief executive officer of the
Dubai-based firm. ” And the one behind is going to Russia. We
are awaiting delivery tomorrow of 30 … destined for Libya.”
With spending cuts around the world, industry consultancy
IHS Jane’s says the market for conventional military vehicles is
contracting by more than four percent a year. But the demand for
armoured sports utility vehicles and limousines – visually
indistinguishable from regular civilian vehicles but protected
against small arms fire and grenades – is on the up.
The gold standard, perhaps unsurprisingly, is set by the
U.S. president. Barack Obama’s Cadillac limousine – dubbed “the
beast” by the US media and Secret Service – is believed to weigh
several tonnes and include its own defensive weaponry and air
supply in the event of chemical attack.
Several major carmakers, including Mercedes-Benz, BMW and
Jaguar Land Rover, produce their own armoured versions of key
brands.
Most of the industry, however, is made up of companies who
fit armour to regular new or second hand vehicles. Not only are
they often considerably cheaper, but sales of vehicles built
outside Western Europe and the United States can be less
constrained by complex export regulations.
The conversion trade is far from new. Britain’s Jankel –
which also builds armoured riot control vehicles for police and
militaries – has been fitting armour and rebuilding limousines
for heads of state and other clients since the 1980s.
But the scale and breadth of demand in recent years,
industry watchers say, has been entirely new. Particularly in
those countries affected by the “Arab spring” analysts say
demand from government, individuals and firms is sharply up.
“It’s a murky market and it’s hard to get any exact
figures,” says Jon Hawkes, senior analyst for military vehicles
at IHS Jane’s. “But companies are talking about a 30-40 percent
increase in sales in the last four or five years. The big auto
manufacturers are increasingly realising there is money to be
made but the main area of growth is probably at the other end of
the spectrum.”
Prices vary, but an armoured Land Cruiser can sell for
$150,000 or more, more than three times the cost of a
non-armoured vehicle.
TESTED AGAINST GRENADES, BULLETS
In the entrance of its Dubai workshop, Ares proudly displays
one of its most heavily tested vehicles – a Land Cruiser
subjected to heavy gunfire on a test range in Germany. Given
enough time, the company says it can convert almost any vehicle
– but the Toyota Land Cruiser has emerged as far and away the
favourite.
The Dubai plant now produces two such vehicles a day, CEO
Rouelle says, still primarily for shipment to Iraq and
Afghanistan but increasingly also to other buyers elsewhere.
The Middle East emerged as a major centre of the industry
because of its proximity to those two war zones and other
markets. At the height of the Iraqi and Afghan wars, more than a
dozen companies were operating in the United Arab Emirates alone
producing what industry insiders said could be 400 vehicles a
month.
That demand, industry insiders say, has fallen off somewhat
lately. In part, the drawdown of Western troops has meant fewer
foreign personnel on the ground. At the same time, workshops
have sprung up in both Iraq and Afghanistan capable of doing
their own conversions to add armour.
Several companies, including Ares, have set up operations
elsewhere. Jordan, with its land border with Iraq, is a
particular favourite.
For Rouelle, however, Dubai, still offers an appealing base.
As well as an easily tapped migrant workforce, it charges little
tax and is well located for the other growing markets of the
Middle East, Africa and Asia.
“The UAE is an attractive base for our main operations,” he
says. “European engineering, tested and certified in Germany,
made in Dubai.”
Multinational companies, particularly oil firms, are big
buyers, finding such vehicles a useful tool to bring down rising
insurance premiums. Rich people in emerging economies hope they
will offer protection from kidnapping and street violence.
But the real money, those in the industry say, still lies
with large government contracts.
ULTIMATE LIFESTYLE ITEM?
At last week’s IDEX arms fair in Abu Dhabi, Ares and several
other companies exhibited their wares alongside more
conventional defence suppliers. The bullet-riddled Land Cruiser,
they say, attracted more than a little attention.
“We’ve had a lot of interest,” says John Lashmar, director
of marketing and business development at Ares. “Interior
ministries, presidential protection details, companies and
individuals in the Gulf and beyond.”
In the Middle East and North Africa in particular, secret
police and government security forces have ramped up their
resources.
Saudi Arabia, one source said, had bought several dozen
armoured land cruiser-type vehicles recently as it worries over
potential trouble along its border with Yemen and minority
Shi’ite dominated areas in its oil-rich east. Qatar had bought a
similar number, suspected to be for delivery to rebels in Syria.
Some manufacturers are also expanding into military-style
riot control vehicles, another growing market where they believe
they can compete with larger, established defence companies.
With many nations seeing an uptick in riots and unrest since
the financial crisis, such vehicles are in mounting demand.
Jankel’s armoured police vehicles were credited with helping
restore order in London after its 2011 riots.
The strangest request he has had so far, Rouelle said, was
from somebody looking to armour a Porsche sports car. He
declined, preferring to concentrate on the firm’s existing
strengths.
Other firms, however, will offer just that service. One
U.S.-firm, Lasco Group, says it will armour a Ferrari for
$100,000 plus the original cost of the vehicle. Its armoured
aluminium, however, would only be proof against handguns.
“Sometimes it can be seen as a lifestyle item,” says Hawkes
at IHS. “These buyers are much less concerned about exactly how
bullet-proof a vehicle might be.”
