Increasing military budgets across the globe to acquaint highly-advanced technical combat weapons and military vehicles, coupled with increasing cross border conflicts in sensitive areas drive the market growth. On the other hand, high maintenance costs and surging prices of raw materials hamper the market growth.
The military land vehicles market was valued at USD 22.8 billion in 2019 and is expected to reach USD 33.8 –billion by 2029, with a CAGR of 3.9% during the forecast period, 2020–2029.
Emerging economies such as India, Afghanistan, and the Middle-East, and Africa have been witnessing threat of cross border terrorism, further rising the demand for advanced military land vehicles. The vehicles are categorized into tanks, armored vehicles, unmanned ground vehicles, infantry fighting vehicles, and light utility vehicles. These vehicles are integrated with hi-tech devices such as navigation systems, onboard optics, fire control systems, and self-protection systems. For instance, the Tak-4 military vehicles are embedded with independent and distinctive suspension systems in the light, medium, and heavy vehicles. The Oshkosh Defence Autonomous Technology offers LIDAR, radar vision, military-grade global navigation satellite systems, and accurate positioning without the need for continuous tracking or GPS.
The U.S. (USD 648 billion), China (USD 249 billion), Saudi Arabia (USD 67 billion), India (USD 66 billion), France (USD 63 billion), and Russia (USD 61billion) were the leading regions in terms of military defense expenditure in 2018. Increasing demand for military equipment, rising need for military modernization, and surging global security concerns drive the market growth.
The global defense expenditure is presumed to reach around USD 2.1 trillion by 2024, with a CAGR of 3% 2019–2023. As per the SIPRI Military Expenditure Database, the U.S. foreign military sales exhibited a steady growth, which was about USD 44.2 billion in 2019, up from USD 55.7 billion in 2018. The Middle East offers lucrative opportunities for market players due to rising geopolitical tensions. Whereas India, China, and Japan and France are expected to increase their defense budgets, further driving the market growth.
The service segment accounted for over 55% of the market shares in 2019 and continues to dominate the market. The service segment includes training and maintenance services that are required for post-purchase assistance. These services vary in accordance with the purchase agreement under MOUs. The services offered by the company and third-party vendors are solely responsible for the maintenance service, such as the replacement of spare parts, software/platform updates, and other support services. On the other hand, the platform segment is projected to exhibit the highest CAGR of 3.8% during the forecast period.
The IFV segment accounted for the largest market share and continues to dominate the market owing to its cost-effectiveness and easy maintenance. Some of the best infantry fighting vehicles include Puma manufactured by the joint venture of Krauss-Maffei Wegmann (KMW) and Rheinmetall Land Systems. K21 IFV is manufactured by the Doosan DST for the South Korean army.
The defense and combat segment held over 75% of the market shares in 2019 and is presumed to exhibit a significant CAGR during the forecast period. On the other hand, the logistics and transportation segment is projected to grow with a CAGR of 4.2% during the forecast period.
North America held the largest market share in 2019 and is expected to dominate the market during the forecast period. The region is largely driven by the U.S., which leads the globe defense exports. As per the SIPRI database, the U.S. government invested over USD 731 billion in defense, which is highest among all the countries in the world. The region is also backed by the presence of leading market players, such as General Dynamics, Oshkosh Corporation, BAE Systems, and John Deere.
Asia-Pacific is expected to be the fastest-growing market in military land vehicles on account of increasing cross-border terrorism in the Indian sub-continent and rising defense expenditure by China, India, South Korea, and Japan.
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