In a scenario where Czechoslovakia doesn't go Red, how would its arms industry look like? Is it possible for them to become a major indigenous arms producer? Is there also a chance that they can get license to manufacture late wartime German AFVs, especially when Germany itself is still demilitarized?
Any other possible scenarios?
Depends on the POD. Let's say the scenario from "Operation Compass Succeeds" goes through (short: no british intervention i Greece early 1941 leads to british victory in North Africa before german intervention, the japanese don't take Singapore etc) and the WAllies are far stronger in the negotiation with the soviets, and that D-Day takes of in 1943.
Thereby Czechoslovakia is liberated by the WAllies, but are forced to become neutral as Austria IOTL. (Let's remove all restrictions on weapon types that Austria suffered.) Then CZ problably would go the Swedish way - develop a big weapon industry for self-defense.
Aircrafts would probably be a problem, since it would need access to good jet engines fron the West (which Sweden got through some creative dealing and netutrality breaking agreements) but CZ could definetly build a lot of tanks and artillery designed for Czech needs and tactics.
I guess a modernized Hertzer/tank destroyer would be first on order, since
a) the Czechs would see the Red Army and its fleets of tanks as the primary threat, and tank destroyers were the best way to stop tanks
b) tank destroyers are clearly defensive weapons, showing that CZ will honor its neutrality.
CZ would probably be a big exporter of weapons, with their past know-how and available Skoda Works. IOTL Israel got a lot of second hand CZ weapons before 1948 - the same would be true ITTL.
Another example is that target shooting was a big sport in ITOL CZ, and the CZ-75 was a big export product. I can think that a free CZ would get good results in international championships and use the sportsmen to promote their rifles/handguns on the international civilian market. And after that sales on the military market for small arms are very likely.
CZ could do some military cooperation with other neutral countries such as Finland, Sweden, Switzerland etc - CZ tanks for Swedish aircrafts, for example.