Armored Vehicle Market Growth, Size, Share & Russia-Ukraine War Impact Analysis, By Platform (Combat Vehicle, Combat Support Vehicle, and Unmanned Armored Ground Vehicles), By Propulsion (Conventional and Electric), By Mobility (Wheeled and Tracked), By System (Drive Systems, Structures & Mechanisms, Weapons & Ammunition Control Systems, Countermeasure Systems, Command & Control Systems, Navigation Systems, Observation & Display Systems, and Others), By Solution (Line Fit and Retrofit), and Regional Forecasts, 2023-2030

The global armored vehicle market size was valued at USD 19.5 billion in 2022 and is projected to grow from USD 22.2 billion in 2023 to USD 33.9 billion by 2030, exhibiting a CAGR of 6.2% during the forecast period.

Armored is an armed combat vehicle protected by armor that combines operational mobility with offensive and defensive capabilities. Military vehicle technology advancements in artillery, automotive, electronics, and metallurgy will drive market expansion. The market is witnessing an introduction of next-gen vehicles with reactive armor technology, programmable ammunition, sophisticated autoloaders, and other features.

Commercial and technological advancements have been significant drivers in the military vehicle and allied equipment sector, ushering in a new era of quick acquisition policies and exquisite systems bolstered by artificial intelligence, superior sensors, and virtual and synthetic items. Along with additional research and development funding, the military vehicle community's capabilities matrix still favors durability, lethality, agility, connectivity, autonomy, and modularity. Despite rising demand for light-protected mobility, increasing investment in lighter, cheaper, and more accurate active protection systems for MBTs drives the market growth.

RUSSIA-UKRAINE WAR IMPACT

The ongoing Russia-Ukraine war changed the dynamics of the European defense industry in 2022. The NATO and European countries provide ammunition, firefinder weapons, various vehicles, and other systems to western Ukraine via Poland. More than 25 countries have joined to support the Ukraine war crisis. These countries have provided finance, weaponry support, special military operations, and others. For instance, Ukraine Security Assistance Initiative (USAI) funding will likewise ensure the delivery of 45 revamped T-72B tanks with streamlined optics, communication systems, and armor bundles. Thus, the rise in demand for armored vehicles has been observed recently.

The conflict between Russia and Ukraine prompted increased vehicle use across Europe, particularly among NATO members. For war action and border defense, the army increased deploying military vehicles. In addition, according to the USAI, Ukraine will demand armor capabilities, seeking around 300 MBTs to reacquire territory captured by Russia.

Since the start of the current Russia-Ukraine conflict, the Ukrainian army has destroyed over 1,000 tanks and at least 2,500 armored fighting vehicles belonging to Russian forces. In this situation, the market is looking for high demand in the future for both countries. Global war has increased the demand for vehicles and their agility for security purposes.

LATEST TRENDS

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Adoption of Electric Technology for Armored Vehicles to Propel Market Growth

The hybrid electric drive systems enable better silent mobility while providing possible military advantages by decreasing noise and boosting stealth capability. Hybrid technology will eventually decrease the armed forces’ dependency on fossil fuels and bring many technological and operational improvements.

In January 2022, the University of Wisconsin was awarded a U.S. Army contract to study how hybrid powertrains might be integrated into the fleet. Furthermore, the U.S. Army's electric Light Reconnaissance Vehicle (eLRV) will most likely be outfitted with a hybrid system before transitioning to full electrification. In Addition, in January 2022, Oshkosh Defense unveiled its electric military vehicle eJLTV. eJLTV is a hybrid troop-carrying vehicle.

DRIVING FACTORS

Asymmetric Warfare is Becoming Prevalent around the World and Aiding Market Growth

In asymmetric warfare, opposing parties or states have unequal military resources, and weaker opponents deploy unorthodox weaponry and tactics to exploit their adversaries' vulnerabilities. Political instability and economic, religious & socio-cultural issues have increased asymmetric warfare in the last decade. As asymmetric warfare has become more common, government agencies have started to deploy combat vehicles to defend against terrorist or rebel attacks to protect against ballistic and explosive strikes.

Moreover, these vehicles are equipped with turret gun systems for counter-insurgency missions. For instance, India has deployed armored trucks in its anti-naxalite operations in east India. As a result, growing cases of asymmetric warfare will likely lead to the higher purchase of vehicles worldwide, propelling the market over the forecast period.

Increasing Demand for Next-Generation Military Vehicles with Advanced Weaponry Systems to Catalyze the Market Growth

There has been a rise in international disagreements, terrorist actions, and wars. The surge in violence, as well as cross-border operations between Asian countries and other regions, has prompted some nations to upgrade their military systems. Governments all around the world are deploying modern Main Battle Tanks (MBTs), Light-Protected Vehicles (LPVs), Infantry Fighting Vehicles (IFVs), and other vehicles to defend and enhance their armed forces. As a result, this aspect may fuel the market expansion during the forecast period.

Moreover, emerging nations are increasing their focus on advanced weaponry systems, implementing vehicles to protect against various threats, and fueling market growth. For instance, in September 2021, Royal Netherlands Army selected BAE System and awarded a mid-life upgrade program for the CV9035NL and the upgradation of the CV90 MkIV. Under this program, the company will supply a new turret configuration. The total value of the contract is around USD 500 million.

RESTRAINING FACTORS

Occurrence of Electrical System and Mechanical Failure to Hamper the Market Growth

Armored vehicles are prone to mechanical strain caused by their movement on uneven terrains and logistical strain caused by various operations. However, these vehicles need regular maintenance to function correctly and prevent failures. There are many key points about vehicle maintenance and failure, such as regular maintenance is crucial for vehicles. It includes routine inspections, lubrication, cleaning, and replacing worn parts. However, the maintenance of the vehicle is costlier than usual. According to a few sources, maintenance costs around USD 300,000 to USD 1 million.

Moreover, vehicles can experience mechanical, electrical, and structural failures. Some common failure modes include engine, transmission, suspension, and armor failure. In addition, consequences of vehicle failure cause range from mission failure to loss of life. Ensuring that all vehicles are maintained correctly and inspected regularly is crucial to minimize the risk of failure restraining the market growth.

SEGMENTATION

By Platform Analysis

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Combat Vehicles to Lead due to Demand for Infantry Mechanization and Infantry Modernization Programs

Based on the platform, the market has been divided into combat vehicles, combat support vehicles, and unmanned armored ground vehicles.

The combat vehicles segment is expected to lead the market during the forecast period. The segmental market growth is owing to present and future demand for infantry mechanization and infantry modernization programs in developing and developed countries worldwide. For instance, in July 2022, as per the Permanent Structured Cooperation Office (PESCO) of the European Union (EU), the project was initiated by EU member states such as Italy, Finland, and Slovakia for undertaking RDT&E of a common prototype for the development of infantry fighting vehicles, amphibious assault vehicles, and a light armored vehicle. The common prototype platform will aid in faster combat deployment maneuvers, ISR operations, logistics support, combat support, command and control operations, and medical support. It will also help in imparting interoperability between EU member states armed forces.

The unmanned armored ground vehicles segment is the fastest-growing segment over the forecast period. These unmanned vehicles can operate in high-risk environments and are used for defense. As a result, the segment will rise faster as demand for developing and deploying these unmanned military vehicles grows. Due to its fire assistance, diverse operational aid, and other capabilities, the combat support vehicles segment is expected to develop moderately over the projected period.

By Propulsion Analysis

Increasing Adoption of Electric Propulsion Technology to Boost the Conventional Segmental Market Growth

By propulsion, the segment is divided into conventional and electric.

The conventional segment dominated the market share in 2022, owing to military modernization programs, the ongoing Russia-Ukraine war, and dynamism in the procurement priorities amid burgeoning skirmishes, war, and civil unrest worldwide. For instance, in April 2022, Nadicorp Holdings Sdn Bhd and Nurol Makina delivered 20 Ejder Yalcin 4x4 wheeled armored vehicles. The Armored vehicles will be equipped with ASELSAN Stabilized Advanced Remote Weapon Platform (SARP) Remote Weapon Station (RWS). Ejder Yalcin Armored Vehicle will be provided to Malaysian Battalion 850-5 (MALBATT 850-5) Contingent in the United Nations Interim Force in Lebanon (UNIFIL).

Electric propulsion is anticipated to be the fastest-growing segment during the forecast period. Most OEMs have researched hybrid vehicles substantially to meet the ever-increasing emission and fuel efficiency standards in the U.S., Europe, and Asia. Furthermore, hybrid powertrain components, which include power electronics and electric motor drives, have established themselves as a technique for boosting vehicle energy economy and market in the forecast period.

For instance, in April 2022, the U.S. Army and Department of Defense planned to transform its ground vehicle fleet by introducing electric and hybrid-electric drive technologies. Moreover, the U.S. Army has tested hybrid-electric Humvees and Joint Light Tactical Vehicles versions. In addition, Generals Motors announced they are investing USD 35 billion in advanced vehicle technology, including power and propulsion systems for electric vehicles.

By Mobility Analysis

Adopting Next-Generation Vehicles for Defense Operations Will Propel the Wheeled Segment Further

The market has been divided into wheeled and tracked based on mobility.

The wheeled segment is estimated to be the largest segment and witnessing fastest CAGR during the forecast period. It is anticipated to increase the high adoption rate due to its utility in special operations, troop deployment, border patrol operations, combat support operations such as command and control, and medical support for armed forces. The military's increased demand for 4X4 LAVs for intelligence, surveillance, reconnaissance (ISR), and transportation applications is credited with the increase. For instance, in May 2020, China North Industries Group Corporation (NORINCO) developed airdrop-capable four-wheeled military vehicles, entering service with the Chinese Air Force. The tracked category will see significant expansion due to increased acquisition of main battle tanks and vehicles employed on tough terrains.

The tracked segment is estimated to grow at a moderate growth rate during the forecast period. Major OEMs are focused on the traditional picture of slow-moving heavy, tracked military vehicles redefining into major platforms that are lighter, faster, more agile, and use less fuel, built to operate at a high tempo, well within the enemy's decision cycle, and with greater survivability through agility, terrain access, and tactical flexibility. These factors will fuel the market growth over the forecast period.

By System Analysis

Drive Systems Segment to Lead due to Demand for Advanced Driving Systems

Based on system, the market is classified into drive systems, structures & mechanisms, weapons & ammunition control systems, countermeasure systems, command & control systems, navigation systems, observation & display systems, and others.

The drive systems segment dominated in 2022 and is expected to be the fastest growing from 2023 to 2030. The rising demand for advanced driving systems by various countries' military forces is driving the armored vehicle market growth.

The drive systems segment is expected to develop due to the increased need for durable and robust diesel engines. Furthermore, demand for turbine engines is increasing due to main battle tank modernization initiatives. Due to the growing demand for autonomous ground systems, command and control systems will significantly increase.

By Solution Analysis

Increasing Procurement under License Production in Emerging Countries to Lead to Higher CAGR of Retrofit Segment

Based on solution, the market is bifurcated into retrofit and line fit. Retrofit segment is the fastest-growing segment. There is growing demand for license production by emerging countries. Majority countries trust manufacturing trends over procurement from other countries’ OEMs or governments, generating productive growth during the forecast period. For instance, in April 2019, according to SIPRI Database 2021, Turkey and Indonesia inked a long-term government-to-government contract worth USD 135 million under which PT Pindad and FNSS Savunma Sistemleri A.S. signed serial licensed production of Kaplan MT (Harimau/Tiger) MMWT).

PT Pindad will be bearing the licensed product of 18 Harimau ultramodern medium-weight tanks (MMWT) (FNSS Kaplan MT MMWT) for the Indonesian Land Forces. PT Pindad will start the delivery of the Harimau MMWT in 2022, equipped with a CMI Cockerill 3105 turret and a 105MM L- 53 CV dredged gun with GVW 35 tons.

Furthermore, developing nations are improving their products with new systems to become more advanced in combat. For instance, according to the U.S. Army, the fortified force, masterminds, and scientists are developing technology prototypes manufactured as part of the Advanced Targeting and Lethality Back System (ATLAS) program.

REGIONAL INSIGHTS

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The global market is segmented into North America, Europe, Asia Pacific, the Middle East, Africa, and Latin America, based on region.

North America is dominating the armored vehicle market share. The region's domination is attributable to the U.S. government's largest defense spending on military vehicle purchases and upgrading. Key players, such as General Dynamics Corporation, Textron Systems, Oshkosh Defense, and others, for example, are driving market expansion in North America.

Asia Pacific is estimated to be the fastest-growing region during the forecast period, owing to increased defense spending in countries similar to India, China, South Korea, Japan, and others. Increased terrorism, cross-border conflicts, and political turmoils have resulted in fighting in Asian countries, driving the market growth. For instance, in March 2021, the Indian Ministry of Defense signed a USD 144.79 million contract with Mahindra Defense Systems Ltd (MDSL) to equip the Indian Army with 1,300 light specialist vehicles. Moreover, LTV is an advanced tactical vehicle that can carry medium machine guns, automatic Grenade Launchers, and Anti-tank Guided Missiles. It will be approved for use by various fighting units.

Europe has seen moderate growth during the forecast period. With the ongoing war between Russia and Ukraine, the demand for the battle tank is increasing along with other armored vehicles. In addition, the existing vehicles line to convert into the next generation is anticipated to drive market growth. Russia, Hungary, and France contribute further to the market. For instance, in May 2022, Rheinmetall BAE Systems Land (RBSL) awarded a contract to Curtiss-Wright to supply Turret Drive Servo System (TDSS) for the forthcoming British Army’s Challenger 3 main battle tank. In addition, to support a UK MOD tank modernization program, Curtiss-Wright would supply RBSL with its cost-efficient Scalable Turret Drive System TDSS and certain system components under an agreement worth approximately USD 25 million.

The Middle East market is anticipated to grow with a moderate CAGR during the forecast period due to the presence of important players such as NIMR Automotive LLC, Koç Holding A.Ş., BMC Otomotiv Sanayi ve Ticaret A.S., STREIT Group, International Armored Group (IAG), Arab Organization for Industrialization (AOI), and EDGE Group. Turkey, the UAE, Saudi Arabia, and others have increased their defense budget since 2018 for indigenous products of armored vehicles.

The Africa armored vehicle market is contributing lower profit in the MBT sector. Rising procurement programs from South Africa, Egypt, and others will probably boost market expansion in the rest of the world. For instance, in April 2022, the Egyptian Ministry of Defense inked a contract with the Russian State-possessed enterprise Uralvagonzavod (UVZ) for a certified periodical product of 500 T- 90MS MBTs in Egypt under which Uralvagonzavod will make a tank installation to assemble the tanks from Russia-imported spare corridor.

Latin American countries are continuing the armed forces' modernization efforts. The increasing issues related to the illicit drug trade, militant terrorism, and economic & social inequality have fueled persistent violence, creating demand for these vehicles in this region. The acquisition of armored vehicles in this region for military troop deployment in urban regions will increase the Latin America market growth.

KEY INDUSTRY PLAYERS

The fragmented market has multiple manufacturers participating in military vehicle development and design. OEMs concentrate on developing technologically superior products and forging strong relationships with governments in developed and developing countries.

Some prominent participants in 2020 were General Dynamics Corporation, BAE Systems, Oshkosh Corporation, and Rheinmetall AG. In February 2021, the Indian Prime Minister handed over Arjun Main Battle Tank Mark-1A (MK-1A) to the Indian Army, developed by the Defense Research and Development Organization (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.)


• General Dynamics Corporation (U.S.)


• Rheinmetall AG (Germany)


• Krauss-Maffei Wegmann GmbH (Germany)


• Denel SOC ltd (South Africa)


• IVECO DEFENCE VEHICLES (Italy)


• NORINCOGROUP.com Inc. (China)


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


• Otokar, a KOC Group Company (Turkey)


• Textron Systems (U.S.)

KEY INDUSTRY DEVELOPMENTS

• February 2023: The U.S. Army Contracting Command Detroit Arsenal awarded a contract to A.M. General to manufacture 20,000 Joint Tactical vehicles along with around 10,000 trailers for the U.S. Armed Forces. The total value of the contract is not declared.


• February 2023: The U.S. Army Contracting Command – Detroit Arsenal awarded a contract to Oshkosh Defense LLC to supply the Joint Light Tactical Vehicles (JLTV) Family of Vehicles. The total value of the contract was around 84.9 million.


• January 2023: The Italian Navy awarded a contract to IVECO Defense Vehicles to supply Amphibious Armored Vehicles (VBA) Personnel Carriers. Amphibious vehicles will reinforce the fleet of the San Marco Marina Brigade (BMSM).


• January 2022: Before using completely electric cars, there is now an emphasis on developing hybrid vehicles for use in the Armed Forces. The University of Wisconsin has been awarded a contract by the US Army to study how hybrid powertrains might be integrated into the fleet. Furthermore, the US Army's electric Light Reconnaissance Vehicle (eLRV) will most likely be outfitted with a hybrid system before transitioning to full electrification.


• January 2021: The U.S. Army granted BAE Systems Land & Armaments LP a USD 400.9 million contract to acquire 160 armored multipurpose vehicles. The contract updates a previous contract for armored multi-purpose vehicles that was awarded in 2014 and updated in February 2019. The M113s will be replaced by the vehicles, which will operate alongside the M1 Abrams Tank and the M2 Bradley as part of the Armored Brigade Combat Team.

REPORT COVERAGE

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The research report provides detailed market analysis and focuses on key parameters such as leading companies, product types, and major applications. Besides this, the report offers insights into the market and highlights key industry developments and trends. In addition to the factors above, the report encompasses several factors that have contributed to the growth of the market in recent years.

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