ROME — German propulsion firm Renk has announced it is setting up a subsidiary in La Spezia in Italy, a week after defense giants Rheinmetall and Leonardo said they would be build tanks and infantry fighting vehicles for the Italian army in the city.

The move will put Renk in “a strategically important region,” close to “Italian customers and partners,” said the firm, which already makes gearboxes for Rheinmetall in Germany.

Opening for business in La Spezia, which is the historical home to Leonardo’s tank building operation, suggests the firm is aiming for a slice of the Italian army’s massive €23 billion ($25 billion) order for vehicles.

“With our local presence, we are moving closer to Italy’s technological and industrial base – one of the pillars of European defense. Thus, Renk is ideally positioned to meet existing and future requirements of Italian customers and partners,” says Susanne Wiegand, CEO of Renk Group AG.

Last week, Leonardo and Rheinmetall announced the creation of a joint venture with an operational base at La Spezia which would build 1,050 new infantry fighting vehicles based on the Rheinmetall Lynx and 132 main battle tanks based on the German firm’s under-development Panther KF51.

Leonardo will take 50 percent of work share, Rheinmetall in Germany is taking 40 percent with the remaining ten percent taken by Rheinmetall’s Italian facilities.

Managers have said there is ample space to build production lines at Leonardo’s La Spezia facility, which once built Ariete tanks and was run by Oto Melara, a former unit of Leonardo which has now been integrated into it.

Renk, which saw revenue of €926 million in 2023, has a product line including gear units, transmissions, power-packs and hybrid propulsion systems.

It has hired Sergio Rizzi, a former executive at Germany’s Hensoldt, as CEO of its new Italian operation and retired Adm. Pier Federico Bisconti, a former Italian deputy national armaments director, as chairman.