Armored Vehicle Upgrade and Retrofit Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

Reportlinker.com has recently published a report on the armored vehicle upgrade and retrofit market. According to the report, the market was valued at $6.51 billion in 2023 and is expected to reach $10.45 billion by 2028, growing at a compound annual growth rate (CAGR) of 9.92% during the forecast period. The report provides analysis of the market's size and share, as well as growth trends and forecasts for the next five years.

Armored automobiles are terrestrial combat automobiles utilized for the conveyance of diverse hostile and protective missions. These automobiles are typically employed for the conveyance of armed forces personnel and goods, along with operations in live battlefields. Furthermore, such autos are equipped with weaponry and fortified with armor to defend against bullets, shrapnel, and other projectiles. Armored automobiles provide substantial power to a nation's military. They are extensively utilized by numerous defense forces across the globe.

The primary forces behind the growth of this industry can be credited to the rising military spending of different nations, resulting in frequent enhancements of armored vehicles to align with the evolving conditions on the battlefield. Moreover, there is a growing need for affordable armor solutions for military vehicles. Based on data from the Stockholm International Peace Research Institute (SIPRI), global defense spending reached an all-time high of USD 2,240 billion in 2022.

Furthermore, the growing occurrence of terrorism and hostile actions worldwide has led to a higher need for integrating advanced technologies into land vehicles. This, combined with the aging fleet of armored vehicles, has compelled many countries to invest in upgrade initiatives to enhance effectiveness, combat capabilities, and connectivity. At present, numerous programs are underway globally to modernize the equipment and systems of old armored vehicles. Moreover, the upgrade and retrofit processes are more cost-effective in comparison to producing a brand-new, fully equipped vehicle.

Updated Trends in the Market for Improving and Upgrading Armored Vehicles

The domination of the market by the Infantry Fighting Vehicle (IFV) segment is expected to persist throughout the projected timeframe.

The market's predominant position is held by the division of combat vehicles, specifically those known as infantry fighting vehicles. This dominance is predicted to persist throughout the projected period. This growth is attributed to the increased funding directed towards the defense sector by many nations, as well as the growing emphasis on enhancing defensive capabilities.

An armored combat vehicle known as an infantry fighting vehicle (IFV) or mechanized infantry combat vehicle (MICV) is utilized in warfare to transport infantry troops and offer direct-fire assistance. The nations have been dedicated to enhancing the capabilities of these aging infantry fighting vehicles, focusing on areas such as fire control, firepower, and overall ergonomic and functional features.

For example, in December 2022, Sweden agreed to a deal valued at $1.37 billion with the Slovak Republic's Ministry of Defense. This agreement is for the supply 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) entered into a contract with PSM GmbH, a joint venture between Rheinmetall and Krauss-Maffei Wegmann, to upgrade the initial batch of Bundeswehr's Puma IFVs. This contract was awarded as part of the German Bundeswehr's initiative to maintain a fully equipped and digitally advanced fleet of IFVs. Under this contract, PSM GmbH will modernize 154 vehicles and potentially upgrade an additional 143 Puma IFVs. The anticipated completion date for these vehicle modernizations is 2029. These military modernization programs are expected to drive the growth of this sector in the foreseeable future.

The estimation is that North America will experience the most significant expansion in the upcoming period.

North America is expected to experience the most significant expansion in the market for upgrading and retrofitting armored vehicles in the foreseeable future. This growth can be attributed to the substantial investment in defense, the possession of the largest fleet of armored vehicles, and the increasing expenditure on military modernization initiatives by both the United States and Canada. According to the Stockholm International Peace Research Institute (SIPRI) report released in 2022, the US government designated a defense budget of USD 877 billion for the same year.

The United States Army possesses various types of fortified automobiles in its arsenal. These consist of main battle tanks, vehicles for carrying soldiers, vehicles for combatting infantry, vehicles for supporting engineering tasks, vehicles for mine protection, vehicles for towing and transporting goods, mobile artillery, lightweight tactical vehicles, and lightweight utility vehicles. These vehicles differ in size and weight, ranging from the 70-plus ton Abrams main battle tank to the one-ton Lightweight Tactical All-Terrain Vehicle utilized by Special Forces. Moreover, the Army upkeeps a number of modified commercially available vehicles, including trucks for transporting waste material and pick-up trucks. Overall, the U.S. Army currently possesses close to 225,000 vehicles of all kinds. As an example, in June 2023, the Army was granted a contract to develop a new prototype for a mechanized infantry combat vehicle. According to this contract, General Dynamics Land Systems Inc. and American Rheinmetall Vehicles LLC will construct prototypes of vehicles to replace the M2 Bradley Infantry Fighting Vehicle which is currently employed for reconnaissance missions and provides protection, transportation, and small-arms firepower to squad units. The total value of both contracts is approximately 1.6 billion U.S. dollars.

In addition, the Canadian Army employs Heavy Logistics Vehicle Wheeled (HLVW) trucks, which allow for the transportation of large and heavy loads. These HLVW vehicles are crucial for moving combat supplies, troops, goods, and replacement parts. As a result, the rise in military modernization initiatives and the upward trend in defense spending contribute to the expansion of the market throughout the area.

Overview of the Upgrades and Retrofits in the Armored Vehicle Industry

The market for upgrading and retrofitting armored vehicles is not dominated by any one company, with multiple global and local players holding significant market shares. General Dynamics Corporation, Rheinmetall AG, Nexter Group, Textron Inc., and BAE Systems plc are some of the important players in this market. These key players are heavily investing in research and development to introduce advanced solutions for armored vehicles. For example, in April 2023, BMC Otomotive, a manufacturer, announced that they have provided two pre-production samples of the Altay MBT to the military. These samples will undergo field testing for a period of 1.5-2 years before mass production begins. Currently, there have been 10 Altay MBT samples built with different configurations, including various engines and transmissions. The serial production of tanks is expected to begin around 2024-2025.

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