Armored Vehicles Market - Forecasts from 2023 to 2028

The armored vehicle market is projected to witness a compound annual growth rate of 3.29%, growing to US$22.371 billion by 2028 from US$17.831 billion in 2021.

Armed combat vehicles with armor are protected against IEDs, missiles, weapons, shrapnel, bullets, and projectiles, among others. The advancement of military vehicle technology and improvements in automotive, electronics, material science, and weapons will accelerate market expansion.

The industry is seeing the introduction of next-generation vehicles with active protection systems, reactive armor technology, programmable ammunition, sophisticated autoloaders, and others. For instance, in September 2022, Larsen and Toubro showcased an 8*8 defense armored vehicle, a wheeled amour fighting vehicle, in a Defexpo in December 2022, in Gandhinagar, Gujarat.

Drivers:

Rising defense budget

Countries like China, India, Australia, South Korea, Singapore, and Japan are spending heavily on purchasing new armored vehicles to replace their aging fleets that have existed for more than 30 years due to the rising geopolitical tensions in the area. The industry is projected to expand because of the increased emphasis on protecting soldiers from potential dangers. The need for individual armored vehicles is also predicted to grow as company security awareness rises, leading to new introductions and advancements in the market. For instance, the first hybrid electric JLTV (Joint Light Tactical Vehicle) was unveiled in January 2022 by Oshkosh Defense, LLC, which develops military vehicles, mobility systems, and technological solutions.

Various developing countries are investing a significant sum of their GDP in the upgradation and making their military more powerful. The government of India set aside 5.94 lakh crores in the budget of 2023-24 for the defense segment, a jump of 13% in value from the previous year. Rs 1,62,600 crore will be allocated to just modernization & infrastructure development in the defense industry, which includes using higher-quality guns, tanks, and various armored vehicles. Similarly, various other governments are also allocating a major share of their budget for developing their defense.

Market Developments:

Furthermore, investments and funding by key firms in this market are also expected to fuel its growth. In the upcoming years, improvements, including increased fuel efficiency and cutting-edge sensors, are expected to boost market expansion. For instance,

• The German-based multinational business HENSOLDT announced the upgrading of its multipurpose self-protection system in November 2021. HENSOLDT focuses on sensor technologies for protection and surveillance missions in the security, defense, and aerospace sectors. The Multifunctional Self-Protection System 2.0 is designed to maximize the number, weight, and dimension of components. The new laser rider improves danger detection and directional solutions.
• Otokar, a Turkish company situated in Sakarya that produces military vehicles, set out in March 2022 to increase its market share in the Asia Pacific region. At the Defence Services Asia exhibition in Kuala Lumpur, Malaysia, the company showed COBRA II tactical armored vehicles and ARMA 66-wheeled armored vehicles. The increasing expenditure on the defense segment and the surging need for armored vehicles by various politicians and company officials will boost the armored vehicle market in the coming years.

Application in Defense

Heightened geopolitical tensions across regions have resulted in a growing focus on defense and national security. As countries seek to protect their interests, there is an increased demand for armored vehicles that can effectively operate in various challenging environments and provide superior protection to military personnel. For instance, the Russia-Ukraine war is one of the major conflicts of the 21st century, marked by Russia's annexation of Crimea and subsequent armed conflict in eastern Ukraine, resulting in significant casualties, displacement, and geopolitical tensions. Border security and counter-terrorism operations have gained prominence globally.

Armored vehicles are crucial in securing borders, conducting surveillance, and supporting operations against terrorist threats. The need for specialized vehicles capable of operating in challenging terrains and providing enhanced protection in these contexts has spurred the growth of the defense segment in the armored vehicle market.

Regional Insights.

The armored vehicle market by geography is divided into North America, South America, Europe, the Middle East and Africa, and Asia Pacific. The growing defense spending and VIP movements, coupled with the presence of major armored vehicle manufacturers, are driving the armored vehicle market growth in the Asia Pacific region.

Indian Market Insight:

The increasing VIP movements, coupled with the surge in defense spending of the Indian government, have provided a positive outlook to the market demand for armored vehicles in India. For instance, according to police records, in 2022, the number of VVIPs who visited Visakhapatnam stood at 1,143, signifying an increase of 83.5% compared to 623 VVIPs visited in 2021. According to the Ministry of Defense, the Defense budget for 2023-2024 witnessed a 13% increase compared to 2022.

Besides growing government spending, various collaborations between the government and major armored vehicle manufacturing companies are further paving the way for future market growth. For instance, in July 2022, Tata Advance System Limited delivered Quick Reaction Fighting Vehicle-Medium, which would enhance the Indian army's operational capabilities during war-like situations.

Market Segmentation:

By Application

• Defense
• Armored Personnel Carriers
• Infantry fighting vehicle
• Light protected vehicle
• Others
• Commercial
• SUV
• Luxury
• Others

By Geography

• North America
• United States
• Canada
• Mexico
• South America
• Brazil
• Argentina
• Others
• Europe
• UK
• Germany
• France
• Italy
• Spain
• Others
• Middle East and Africa
• Saudi Arabia
• UAE
• Israel
• Others
• Asia Pacific
• China
• India
• South Korea
• Taiwan
• Thailand
• Indonesia
• Japan
• Others