The Armored Vehicle Procurement and Upgrade Market is projected to grow with a CAGR of 4.76% during the forecast period.

  • Due to the ever-increasing need for national and regional security, countries, such as India, the United Kingdom, France, and the United States are anticipated to be the primary centers in the market studied. Growing military expenditure of these countries is expected to help in this regard, by giving freedom to the militaries for spending huge amounts for the procurement of these vehicles, in order to satisfy the increasing demand.
  • Countries with vast land-based borders are emerging as lucrative markets for armored vehicles. The procurement of land-based vehicles has been increasing, particularly in Asia-Pacific and Europe, due to the growing political tensions between the neighboring countries and increasing hostile activities in the regions.
  • In addition, these factors are increasing the need for incorporating the latest technologies into the land vehicles. This, in turn, is a major driver for upgrade and retrofit activities.

Key Market Trends

Infantry Fighting Vehicle Segment Held the Largest Market Share in 2019

As of 2019, the Infantry Fighting Vehicle Segment has the largest market share. The demand for the IFVs has increased in the recent past from the armies worldwide due to the requirement for vehicles with high firepower. IFVs are less expensive and easier to maintain than MBTs. Also, IFVs are designed to have higher mobility than MBTs. In addition, the IFCs also provide personnel protection like APCs with greater firing capabilities and thus they are used as substitutes for APCs. Driven by their growing popularity, there is an increase in the procurement and upgrades of the IFVs in recent times. For instance, as part of the US Army’s combat vehicle modernization strategy that aims at ensuring force readiness of the Armored Brigade Combat Teams (ABCT), in October 2019, BAE Systems was awarded a contract covering the upgrade of the Bradley Fighting Vehicle (BFV) to Bradley A4 configuration, in addition to production of new vehicles. On the other hand, Russia received the upgraded BMP-3Ms in 2019, with new “Sodema” gunner’s sight and new radios. The United Kingdom is also expected to upgrade its fighting vehicles, as the army is focusing on the modernization of its armored fighting vehicle fleet, including the Warrior, Challenger 2, and mechanized infantry vehicles. Such procurement and upgrade requiremenrts are expected to increase the revenues for the segment in the years to come.

Asia-Pacific is Projected to Dominate the Market During the Forecast Period

In terms of geography, the Asia-Pacific region accounted for the highest market share in 2019. The region is also projected to witness the highest CAGR during the forecast period, driven by the increasing demand from countries like China and India, among others. China’s production capacity is advancing in almost every category of ground systems, like armored personnel carriers, assault vehicles, artillery systems and pieces, air defense artillery systems, and main and light battle tanks. China North Industries Corporation (Norinco) has been focusing on increasing the production and sales of domestically manufactured armored vehicles, since the past few years. In November 2018, China started testing unmanned Type-59 tanks. Also, in February 2019, Norinco revealed a concept for a heavy IFV, based on the VT4 export main battle tank. Currently, the demand for maintenance and modernization of the existing armored vehicles fleet is high, as several armored vehicles, like Norinco A-100 MLRS, Norinco PGZ-07, Norinco PGZ-95 (Type 95), and Norinco Type 99 (ZTZ-99 / WZ-123), are 20-30 years old. To extend their lifespan, these vehicles require an update. Hence, the market for retrofit and modernization is expected to witness immense growth in China. In addition, India is also increasing its armored vehicle strength, due to its issues with land-border sharing countries. A significant focus is on the modernization of its aging armored vehicle fleet. In April 2019, the Indian government approved the procurement of 464 upgraded T-90 Bhishma tanks at a cost of approximately USD 2 billion, as a part of the modernization of ground forces between 2022-2026. Furthermore, India is planning to replace its aging T-72 tanks with new generation tanks under the Future Ready Combat Vehicle program. Such plans are expected to increase the prospects for the market in the Asia-Pacific on a whole, in the years to come.

Competitive Landscape

The armored vehicle procurement and upgrade market is a fragmented one, with many global and local players competing with their manufacturing, MRO and upgrade capabilities. General Dynamics Corporation, BAE Systems plc, Rheinmetall AG, Textron Inc., Elbit Systems Ltd, Oshkosh Corporation are some of the prominent players in the market. The market has seen an increase in the local players over the last decade. The aging fleet of armored vehicles in Asia-Pacific and Middle-East and Africa have given the necessary opportunities for the local players in these regions to develop their capabilities, helping them gain significant share in local markets. The countries now have the capability to produce their own 3rd and 4th generation MBTs and other armored vehicles locally. In such a competitive environment, the global players are compelled to improve their policies and delivery promises to remain major players outside the US and EU, where they enjoy higher revenues. Also, in the coming years, global players will also have to cut down on prices to compete with local manufacturers.

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