Armored Vehicle Market Size, Share and COVID-19 Impact Analysis, By Platform (Combat Vehicles, Combat Support Vehicles, Unmanned Armored Ground Vehicles), By Mobility (Wheeled, Tracked), By System (Engine, Drive Systems, Ballistic Armor, Turret Drives, Ammunition Handling Systems, Others), and Regional Forecast, 2021-2028

The global armored vehicle market size was USD 17.57 billion in 2020. The global impact of COVID-19 has been unprecedented and staggering, with military vehicles witnessing a negative impact on demand across all regions amid the pandemic. Based on our analysis, the global market exhibited a lower growth of 1.42% in 2020 compared to the average year-on-year growth during 2017-2019. The market is projected to grow from USD 18.08 billion in 2021 to USD 27.83 billion in 2028 at a CAGR of 6.36% in the 2021-2028 period. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

Armored vehicles are armed combat vehicles shielded by armor for protection against IEDs, missiles, weapons, shrapnel, bullets, projectiles, and weapon systems. The development of military vehicle technologies combined with innovations in weaponry, automotive, electronics, and material science will boost the market growth. The unveiling of next-generation vehicles with active protection systems, reactive armor technology, programmable ammunition, advanced autoloaders, and others is a prevailing trend in the market.

Defense Industry to Face Unmatched Challenges Due to COVID-19 Pandemic

The defense industry has faced unprecedented challenges due to the COVID-19 pandemic. The market has faced a slower growth rate due to the reduced defense budget in India, Thailand, South Korea, and other countries. Armored vehicle manufacturers in the market faced delays in the deliveries of military vehicles due to the pandemic.

• BAE Systems faced delayed deliveries of all new Armored Multi-Purpose Vehicles (AMPV) to the U.S. Army, replacing the legacy M113. The company planned deliveries of the first three of the 457 AMPV in March, but due to COVID-19, these were postponed in August.


• Annual reports of major players showed a huge decline in revenues, Rheinmetall AG (-6.08%) and Textron Inc. (-14.52%) witnessed a decline in overall revenue in 2020 compared to 2019.


• General Dynamics Corporation (3.08%), Oshkosh Defense (14.34%), and BAE Systems (8.86%) will witness positive growth in revenue of the armored vehicle segment.


• Disruption in supply chains, a slowdown in the economy, and a production halt led to slower growth in the market.

LATEST TRENDS

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Growing Adoption of Active Protection System (APS) to Propel Market Growth

The APS automatically detects and counteracts incoming threat projectiles before they reach a target. APS uses launchers, tracking radar, sensors, and countermeasure munitions, which protect combat vehicles from grenades and anti-tank guided missiles.

In January 2021, The U.S. Army received Trophy APS units for its M1 Abrams main battle tanks developed by Rafael and Leonardo DRS. The system enhances the survivability of the tanks against large-caliber projectiles. Raytheon Technologies offered APS that provides squad and vehicle protection using a countermeasure system and an integrated multi-mission fire-control radar that detects, tracks, and destroys multiple threats.

DRIVING FACTORS

Growing Defense Expenditure and Procurement Programs in Asian Countries Will Aid Market Growth

Increasing defense budgets and growing demand for armored vehicles, especially in Asian countries, may drive market growth. According to the Stockholm International Peace Research Institute (SIPRI) report 2021, there was a 2.6% increase in the global defense expenditure in 2020 compared to 2019. The global military spending rose to USD 1981 billion in 2020. The five major defense spenders, U.S., China, India, Russia, and the U.K., contributed 62% of the global military expenditure. In 2020, the U.S. allocated USD 778 billion for the defense sector, representing a 4.4% increase over 2019.

Increasing Cross-Border Disputes to Spur Demand for Next-Generation Military Vehicles

There has been a rise in disputes, terrorist activities, and wars worldwide in the past few years. The rising violence, and cross-border activities between Asian countries and other regions, has encouraged several countries to modernize their existing defense system. The governments around the globe are focusing on safeguarding and strengthening military forces by deploying advanced main battle tanks (MBTs), light protecting vehicles (LPVs), infantry fighting vehicles (IFVs), and others. Thus, this factor may drive the armored vehicle market growth during the forecast period.

RESTRAINING FACTORS

High Chances of Electrical and Mechanical Components Failure in Armored Combat Vehicles to Hinder Market Growth

The vehicles are prone to mechanical stresses caused by their movement on uneven topographies, resulting in mechanical failures in the transmission system and engine due to high-speed operating systems. As a result, these vehicles undergo breakdowns of jammed parts, components, power failures, and others due to mechanical failures. These failures lead to a severe breakdown in military operations as such failures are critical to rectify by rescue teams. Thus, the identification of faulty components results in the malfunctioning of military vehicles. Therefore, original equipment manufacturers (OEMs) focus on designing new and innovative products to reduce and rectify such failures in vehicles.

SEGMENTATION

By Platform Analysis

Combat Vehicle Market to Account for the Highest Share Due to Increasing Defense Spending Worldwide

Based on the platform, the market is segmented into combat vehicles, combat support vehicles, and unmanned armored ground vehicles. The combat vehicle segment is anticipated to be the largest segment during 2021-2028. Rising demand for armored personnel carriers (APCs) and light armored vehicles (LAVs) across the globe is propelling the market's growth.

The unmanned armored ground vehicle will witness significant growth during 2021-2028. These unmanned vehicles can operate in high-risk situations and provide the potential for defense operations. Thus, the rising demand for the development and deployment of these unmanned military vehicles will accelerate the market's growth. The combat support vehicle segment is projected to showcase moderate growth of the market during the forecast period due to its various operational assistance, fire assistance, and others.

By Mobility Analysis

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Wheeled Segment to Gain Momentum During the Forecast Period Due to the Adoption of Next-Generation Vehicles for Defense Operations

By mobility, the market has been classified into wheeled and tracked. The wheeled segment is estimated to be the fastest-growing segment during 2021-2028. The growth is attributed to the military's growing demand for 4X4 LAVs for intelligence, surveillance, reconnaissance (ISR), and transportation application. In May 2020, Airdrop-capable four-wheeled armored vehicles developed by China North Industries Group Corporation (NORINCO) entered the Chinese Air Force service. The tracked segment will witness significant growth owing to the rising procurement of main battle tanks and vehicles used on rough terrain.

By System Analysis

Growing Military Modernization Programs for Strengthening Defense Forces Across the Globe to Propel Segment Growth

Based on the system, the market is divided into an engine, ballistic armor, turret drives, drive system, ammunition handling system, armaments, fire control system (FCS), countermeasure system, command & control (C2) system, navigation system, observation, and display system, power system, and hull/frames. The armaments segment is anticipated to show the highest growth during the forecast period due to rising demand for remote weapon stations, anti-tank guided missile (AGTM) launchers, and other armaments worldwide. The market for the engine segment is estimated to grow due to the increase in demand for durable and robust diesel engines. Moreover, owing to the modernization programs of main battle tanks, there is increasing demand for turbine engines. Command and control systems will witness significant growth due to the increasing demand for unmanned ground armored vehicles.

REGIONAL INSIGHTS

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The global market is segmented based on regions, namely, North America, Europe, Asia-Pacific, the Middle East, and the rest of the world.

North America dominated the market in 2020 with a market size of USD 6.12 billion. The region’s dominance is attributed to the highest defense spending by the U.S. government on the procurement and modernization of military vehicles. For instance, key players such as General Dynamics Corporation, Textron Systems, Oshkosh Defense, and others boost market growth across North America.

Asia Pacific’s market will showcase the highest growth owing to the rising defense expenditure by countries such as India, China, South Korea, Japan, and others. Increasing terrorism, cross-border issues, and political unrest led to warfare situations in Asian countries, which, in turn, drives the market's growth. In March 2021, the Indian Ministry of Defense signed a contract worth USD 144.79 million with Mahindra Defence Systems Ltd (MDSL) to supply 1,300 light specialist vehicles to the Indian Army.

Europe’s market is anticipated to show moderate growth due to key players such as BAE Systems, Rheinmetall AG, and others. The Middle East is estimated to show moderate growth due to growing military expenditure by Saudi Arabia, the UAE, Turkey, and others. In the Rest of the World, rising procurement programs from South Africa, Brazil, and others are expected to drive market growth.

KEY INDUSTRY PLAYERS

Key Players Focus on Development of Next Generation Military Vehicles

The market is fragmented and comprises several key players are involved in developing and designing military vehicles. OEMs focus on developing technologically advanced products and establishing strong partnerships with the governments of developed and emerging countries.

General Dynamics Corporation, BAE Systems, Oshkosh Corporation, Rheinmetall AG were some of the major players in 2020. In February 2021, the Indian Prime Minister handed over Arjun Main Battle Tank Mark-1A (MK-1A) to the Indian Army, developed by Defence Research and Development Organisation (DRDO). The Arjun MBT Mk IA provides high mobility, superior firepower, excellent protection, and crew comfort.

LIST OF KEY COMPANIES PROFILED:

• BAE Systems (U.K)


• Denel SOC Ltd (South Africa)


• General Dynamics Corporation (U.S.)


• IVECO DEFENCE VEHICLES (Italy)


• Krauss-Maffei Wegmann GmbH & Co. KG (Germany)


• NORINCOGROUP.com Inc. (China)


• Oshkosh Defense, LLC An Oshkosh Corporation Company (U.S)


• Otokar, a KOC Group Company (Turkey)


• Rheinmetall AG (Germany)


• Textron Systems (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• April 2021 – Israel Aerospace Industries (IAI) signed a contract with Israel’s Ministry of Defense (MOD) to manufacture and supply nine Z-MAG all-terrain vehicles to the Israel Defense Forces (IDF), with an option to order 21 additional units.


• April 2021 - L3Harris Technologies and American Rheinmetall Vehicles, a subsidiary of Rheinmetall AG, signed an agreement to develop the U.S. Army’s new Optionally Manned Fighting Vehicle (OMFV) to replace the Bradley Infantry Fighting Vehicle.

REPORT COVERAGE

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The global armored vehicle market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, different platforms, systems, competitive landscape, and product applications. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the developed market in recent years.

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