Armoured vehicle market worth $28.62 billion by 2019


The global armoured vehicles market is projected to reach a value of $28.62 billion by 2019 with a growth rate of 4.93% from 2014 to 2019, according to a new report.

The growth regions for the armoured vehicle market are Asia-Pacific and the Middle East, according to the Markets and Markets report, which said that the advent of sequestration in the United States, after the end of the Afghan War, has led to a big drop in demand in the armoured vehicle market, since the U.S. and Europe have cut down their defence budgets significantly.

The growth in the armoured vehicle market would be completely dependent on the growing demand for armoured vehicles in the Asia-Pacific region and the Middle East. The peace initiative missions undertaken by most of the countries in the Middle East countries are one of the primary causes of this growing demand, the report said.

The demand for mine resistant ambush protected vehicles (MRAPs) in the US will fall significantly after the Afghan War, but globally the demand will sustain due to the growing demand for armoured vehicles in the Asia Pacific due to security concerns in many countries there, particularly regarding internal terrorism. For example, India is expected to procure MRAPs due to growing Naxalite problems in certain states of the country.

The report noted that the armoured vehicle market was at its peak during the Afghan and Iraq wars. An extensive amount of armoured vehicle production was witnessed during that period due to urgent operational requirements (UOR). The US and the European nations gave utmost priority to armoured vehicle procurement at that point of time. Since the US and its allies withdrew their troops from Afghanistan and Iraq, it created a void in the market. The recent defence budget cuts by the US and European nations created further uncertainty in this market.

However, the market is expected to show enormous growth in the Asia Pacific region and hence will continue to keep the market growing. China and India will continue to be the biggest potential customers in this region, the report said.

The Middle East is also expected to play a pivotal role in this market. Countries like Saudi Arabia, Israel, and UAE are expected to spend extensively on armoured vehicle procurement.

Despite the global economic meltdown and the end of the Afghan War, the US is expected to not stop procuring weapons; it will just reduce its pace of investment. They are expected to increasingly adopt wheeled armoured vehicles rather than tracked vehicles.

Other research indicates that production unit numbers will increase from 408,639 vehicles in 2012 to 418,109 by the end of 2021. According to Army Technology and Strategic Defence Intelligence analysis, the global armoured vehicles MRO market is expected to increase at a compound annual growth rate (CAGR) of 5.68% to reach $7.1 billion by 2022, driven by factors such as aging military equipment, and internal and external security threats. According to Forecast International, armoured wheeled logistics vehicles represent the highest volume of production.

Demand for blast-resistant/mine-protected vehicles is skyrocketing, with an estimated cumulative market value from 2012 – 2021 of $265 billion, according to IQPC.

Homeland security and border protection are driving modernization programmes and opening potential market development in regions such as the Middle East, Asia and Latin America.

African markets appear to have a high potential and are expected to grow in the coming years. According to IQPC industry analysts “African governments are expected to spend $20 billion on armoured vehicles in the coming decade with Algeria being the biggest spender”.

According to Forecast International, 8,400 light tracked vehicles and 18,634 light wheeled vehicles will be globally produced from 2013-2022, which represents a value of respectively $18.1 billion and $8.4 billion, meanwhile there will be a production of 5,200 main battle tanks worth $23.3 billion over the same period.