Hungary has become the first NATO and EU member state to order the Rheinmetall Lynx Infantry Fighting Vehicle (IFV) in a deal worth €2bn (£1.82bn) for 218 vehicles.

The vehicles will be built in Germany and Hungary, with all of the first 46 to be built in Germany and delivered by the start of 2023. The remaining 172 vehicles will all be built in Hungary.

Under the agreement, Rheinmetall will establish a joint venture to produce the IFV in Hungary which is to be financed by a sovereign company.

The country’s order also covers nine Buffalo armoured recovery vehicles as well as services including simulators, training, and the initial supply of spare parts and maintenance capabilities.

Rheinmetall AG chairman of the executive board Armin Papperger said: “The Lynx’s market breakthrough is a major success for us. The fact that we were able to convince Hungary – an important EU and NATO partner – to choose this innovative vehicle makes this success all the greater. In making this forward-looking procurement decision, Hungary’s top political and military officials have demonstrated real leadership.

“Not only does the move place Hungary at the forefront of European army technology. It reaffirms the Hungarian government’s commitment to being a reliable, more militarily effective partner of its NATO allies, a policy which it is pursuing with systematic energy.”

Rheinmetall said it will hold a majority stake in the Hungarian joint-venture and take the lead in getting it set up to produce Lynx IFVs in-country.

Papperger added: “Rheinmetall is very proud to be able to make an important contribution to the sustained expansion of Hungary’s defence technology capabilities in cooperation with local industry.

“We look forward to working together with our Hungarian friends and partners, and will do everything in our power to assure the long-term success of this venture.”

Rheinmetall added that the procurement of Lynx marked a ‘big step’ in Hungary’s efforts to ‘introduce a new generation of military equipment’. Lynx is currently competing in a number of procurement ventures, including similar projects in the Czech Republic and Australia.

Lynx was also offered to the US Optionally Manned Fighting Vehicle (OMFV) programme under a joint venture between Rheinmetall and Raytheon.