Market Trends of Armored Vehicle Procurement And Upgrade Industry
The Infantry Fighting Vehicle Segment to Dominate Market Share
The demand for IFVs increased in the recent past from 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 include higher mobility than MBTs. In addition, 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 IFVs in recent times. For instance, the UK Army is in the process of modernizing its armored vehicles with Ajax (Armoured cavalry) and Boxer (mechanized infantry) vehicles. Nasmyth Group Limited won a contract to provide precision machined and fabricated components for the Boxer program. Ajax is a fully digitalized, advanced land vehicle that delivers transformational change in the UK army's future armored fleet. The Ajax vehicle system offers enhanced lethality, mobility, survivability, all-weather intelligence, surveillance, target acquisition, and recognition capabilities. In 2022, Ajax vehicle was tested for noise and vibrations, and the first round of deliveries of vehicles is planned for 2023.
Similarly, in August 2023, the Polish Government announced a partnership between the Polish Armaments Agency (AA) and the Polish Armaments Group (PGZ) to deliver 400 'Polonised' Kia Light Tactical Vehicles (KLTVs). Moreover, the Polish Armaments Group (PGZ) also gave the contract to Huta Stalowa to deliver wheeled infantry fighting vehicles (IFVs) with comprehensive logistics and training packages. Such procurement and upgrade requirements 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 2023. 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) is focusing on increasing the production and sales of domestically manufactured armored vehicles for the past few years. These vehicles require an update to extend their lifespan.
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. For instance, in March 2021, Mahindra Defence Systems (MDS) won a USD 127.4 million contract from the Indian Ministry of Defence (MoD) to deliver 1,300 Armoured Tactical Vehicles (LSV) for the Indian Army. Mahindra's Armoured Tactical Vehicles will be utilized as a medium of carriage for machine guns, automatic grenade launchers, and anti-tank guided missiles.
Similarly, in December 2021, Australia awarded a USD 1 billion contract to Hanwha Defense to deliver 30 self-propelled howitzers and 15 armored ammunition resupply vehicles and military vehicles for the Australian Army. Moreover, in July 2023, the Australian Army awarded a USD 6 billion contract to Hanwha Defense, where it selected Hanwha's "Redback" IFV over Rheinmetall's rival "Lynx" infantry Fighting Vehicle.
