Market Trends of Armored Vehicle Upgrade And Retrofit Industry
Infantry Fighting Vehicle (IFV) Segment Dominates the Market During the Forecast Period
The infantry fighting vehicle segment holds the highest shares in the market and continue its domination during the forecast period. The growth is due to rising investment in the defense sector from most countries and increasing focus on improving defense capabilities.
An infantry fighting vehicle (IFV), also called a mechanized infantry combat vehicle (MICV), is a type of armored fighting vehicle used to carry infantry into battle and provide direct-fire support. The countries have been working on the improvement of fire control, firepower, and ergonomic and functional characteristics of the aging infantry fighting vehicles.
For instance, in December 2022, Sweden signed a contract worth USD 1.37 billion with the Slovak Republic, the Ministry of Defense of the Slovak Republic, for the delivery of 152 CV9035 infantry fighting vehicles (IFVs) from BAE Systems. In June 2021, the Federal Office for Bundeswehr Equipment, Information Technology, and In-Service Support (BAAINBw) signed a contract with PSM GmbH (a 50 - 50 JV of Rheinmetall and Krauss-Maffei Wegmann) to upgrade the first lot of Bundeswehr's Puma IFVs. The contract was awarded as part of the German Bundeswehr plan to maintain a combat-ready, fully digitized fleet of IFVs, and under the contract, the company will modernize 154 vehicles with an option to modernize additional 143 Puma IFVs. The modernization of vehicles is expected to be completed by 2029. Such modernization programs of the armed forces are anticipated to accelerate the growth of the segment during the forecast period.
North America is Projected to Show Highest Growth During the Forecast Period
North America is anticipated to show the highest growth in the armored vehicle upgrade and retrofit market during the forecast period. The growth is due to the high defense expenditure, the presence of the largest armored vehicle fleet, and rising spending on military modernization programs from The United States and Canada. The Stockholm International Peace Research Institute (SIPRI) report published in 2022 stated that the US government allocated a defense budget of USD 877 billion in 2022.
The US Army has different types of armored vehicles. It includes main battle tanks, armored personnel carriers, infantry fighting vehicles, engineering support vehicles, mine-protected vehicles, prime movers and trucks, mobile artillery, light tactical vehicles, and light utility vehicles. The vehicle is of different sizes and weights, from the 70-plus ton Abrams main battle tank to the Special Forces' Lightweight Tactical All-Terrain Vehicle at around one ton. The Army also maintains several modified commercially available vehicles, such as dump trucks and pickups. In total, the US Army has nearly 225,000 vehicles of all types. For instance, in June 2023, the US Army was awarded a contract to develop a new mechanized infantry combat vehicle prototype. Under the contract, General Dynamics Land Systems Inc. and American Rheinmetall Vehicles LLC will prepare vehicle prototypes to replace the M2 Bradley Infantry Fighting Vehicle used for reconnaissance and provide protection, transportation, and small-arms firepower for squad elements. The total value for both contracts is approximately USD 1.6 billion.
Furthermore, the Canadian Army uses Heavy Logistics Vehicle Wheeled (HLVW) vehicles, providing the Army with heavy lift transport capability. The HLVW fleet transports combat supplies, troops, cargo, and spare parts. Thus, growing spending on military modernization programs and increasing defense expenditure drive market growth across the region.
