Small-arms maker Heckler & Koch reportedly leaving non-NATO market

Reuters recently reported that the German small-arms maker Heckler & Koch (HK) is abandoning efforts to sell firearms to governments clients outside of NATO.

HK’s decision comes amid increasing regulatory and trade restrictions from Berlin, which has in recent years scaled back efforts to export big-ticket defence items to the Middle East, most notably Saudi Arabia.

Saudi Arabia had originally selected and even ordered the HK G36 with partial domestic manufacturing.

However, in 2013, the German government failed to issue permits to export the requisite components necessary to complete a batch of firearms. This prompted HK to sue the German government.

Interestingly, HK’s decision may also rule out the sales of its arms to close non-NATO U.S. allies such as India and Brazil, and even a fellow NATO member – i.e. Turkey.

Notes & Comments:

Although HK did recently win France’s $181 million U.S. tender for 90,000 new rifles to replace the French Army’s legacy FAMAS assault rifles, there is no doubt that HK’s inability to competitively function in the vast non-NATO market cuts it from a significant long-term revenue pool.

In March 2016, the Pakistan Army began trialing a few assault rifles, including the FN Herstal SCAR from Belgium and Beretta ARX-200 from Italy, for its next-generation rifle program.

HK did not submit a rifle, which at the time was a notable omission considering the Pakistan Army’s current mainstay battle rifle is the HK G-3. While not surprising in hindsight, the inclusion of the HK-416 and/or HK-417 in that competition could have impacted the outcome.

In November, Pakistan Ordnance Factories (POF) signed a letter-of-understanding (LoU) to negotiate with the Czech firearm maker Česká Zbrojovka (CZ) to “intensively negotiate [the] delivery of complete technology for the production of small arms to [POF].”

Considering that the CZ-806 BREN 2 was among the rifles examined by the Pakistan Army in the spring and summer, it is likely that the LoU was about the BREN.

If brought to fruition, CZ will have achieved a rifle sale amounting to the hundreds of thousands within Pakistan alone. In partnership with POF, CZ’s scope could expand into other markets, such as Saudi Arabia, Azerbaijan, Nigeria, and others. This is merely one case, there are also other entirely different avenues in India, Pacific Asia, North Africa, and Latin America.