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Despite being a conventional pre-World War II tank design manufactured by Czechoslovakia, with riveted armour and rear engine, Germany ordered continue production of the model, because it was considered an excellent tank, especially compared to the Panzer I and Panzer II, that were the Panzerwaffe's main tanks. It was better armed than them. The Panzer 38(t) performed well in the Polish Campaign in 1939 and the Battle of France in 1940

The main advantages of the Panzer 38(t), compared to other tanks of the day, were a very high reliability and sustained mobility. In one documented case, a regiment was supplied with tanks driven straight from the factory in 2.5 days instead of the anticipated week, without any mechanical breakdowns. 

In the opinion of the crews, the drive components of the 38(t) - engine, gear, steering, suspension, wheels and tracks - were perfectly in tune with each other. The 38(t) was also considered to be very easy to maintain and repair.

The main disadvantages of the Panzer 38(t) were the small turret incapable of carrying a gun big enough effectively engage the frontal armour of medium, heavy and infantry tank designs in 1940 (Battle of France), and to destroy more modern tanks, such as the T-34 in 1941 (German invasion of the Soviet Union). 

This was the main cause what so manufacturing of the tank version ceased in June 1942, by which time more than 1,400 had been built. Nevertheless, the chassis was adapted to a variety of different roles with success. Notable variations include the SdKfz 138 Marder III mobile anti-tank gun, the SdKfz 138/1 Grille mobile howitzer, Flakpanzer 38(t) and the Jagdpanzer 38(t) "Hetzer" tank destroyer. Small numbers were also used for reconnaissance, training and security duties, such as deployment on armoured trains.

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