In Spring: 1944, a relatively complex series of calculations are used to determine how much damage a shot does to its target.
The first line of calculation deals with armour penetration. Almost every combat vehicle has at least a small amount of armour built onto it, from the small 5mm-thick plates of a halftrack designed to protect against small-arms to the 150mm frontal armour of the Tiger II. This information is contained in each unit's UnitDef file, which covers 5 directions - Front, Sides, Rear and Top.
Likewise, most weapons contain information about their armour penetration capabilities; the thickness of armour plating they can penetrate (which itself is dynamic based on range -- the further an armour-piercing shell travels, the more air friction slows it down, and thus the weaker its penetrating capabilities become).
The second line of calculation compares the damage potential of a shot with the overall mass of its target; while a small high-velocity shell might penetrate the armour of a large vehicle, it will do relatively small damage to it. This means that heavier shots will, regardless of their penetration, do more damage.
Armour-piercing shells are used by a wide variety of different combat vehicles. Even some automatic cannons, like that used by the guide:units:vehicles:germany:sd.kfz.250_9 or guide:units:vehicles:sovietunion:t-60, have armour-piercing ammunition.
High-explosive shells do not rely on their velocity to determine their armour-penetration. Instead, the size of their explosion is used -- the larger the shell, the more armour it can potentially penetrate. And even without penetrating its target's armour, large enough high-explosive shells can still damage a vehicle through the destructive shock of its explosion, violently rattling internal mechanics, loosening screws, bolts and wires, damaging hydraulic components and tracks and causing other mayhem.
In short, two factors play major roles that players should be mindful about. The first is the amount of penetration they can expect from their units' weapons; generally, the closer to the target, the more damage will be done. The second factor is the direction they attack from -- attacks against the side armour of enemy vehicles will do much more damage compared to attacks against the front (which in some cases will do no damage at all), while attacks against the rear of an enemy target will do even more damage. Thus players must take into account range and orientation; if facing more heavily armoured opponents, it might be prudent to have your armour-penetrating units attempt to flank their targets with side and rear shots. However if you are using heavily-armoured units, you will want to keep them back and away from the enemy to prevent just that.