The Europe armored fighting vehicles market is anticipated to register a CAGR of over 3% during the forecast period, owing to demand from the armed forces, law enforcement agencies (police), and potential private owners.
- The increasing political tension, terrorism, and hostile activities that are happening across Europe are some of the major reasons generating the demand for armored vehicles.
- Increasing defense spending by European nations is likely to support the growth of the armored vehicles market. According to the International Institute of Strategic Studies (IISS), in 2019, European countries increased their defense spending by 4.2% over 2018.
- Initiatives such as the Permanent Structured Cooperation initiative or PESCO allow member nations of the European Union to develop weapons together in order to reduce NATO dependency. Such initiatives are fuelling the growth of the market.
Key Market Trends
Main Battle Tank Segment is Projected to Lead the Europe Armoured Fighting Vehicles Market from 2020 - 2025
Currently, the main battle tank (MBT) segment dominates the market and is expected to continue its domination during the forecast period. This is propelled by the increasing procurements of tanks by various countries, like Hungary, Russia, Poland, France, and Germany, among others. For instance, in August 2018, the Russian Ministry of Defense signed a contract with Uralvagonzavod (UVZ) for the production of 132 third-generation T-14 Armata main battle tanks (MBT) and T-15 heavy infantry fighting vehicles (IFV). The Russian Ground Forces are expected to receive a total of 100 T-14 MBTs by 2020. France and Germany aims at developing European Main Battle Tank (EMBT) under Main Ground Combat System (MGCS/KNDS (Krauss-Maffei Wegmann + Nexter Defense System) program to replace the German fleet of Leopard Tanks and French fleet of Leclerc Tanks by 2035
Russia is the largest market for Armored Fighting Vehicles in Europe
Russia has the largest fleet of armored fighting vehicles in Europe and a significant increase in spending in an effort to modernize the existing fleet is propelling the growth of the market. The presence of manufacturers such as Kurganmashzavod, KAMAZ, etc., who are actively spending in research and development of existing product lines is also driving the market. However, the armored fighting vehicle manufacturers in Russia are struggling with overcapacity problems due to overseas competition, etc. The current Russian fleet of fighting vehicles is developed keeping in mind the lethality and mobility with vehicles having excellent off-road mobility, amphibious mobility, etc. However, investments are being made to increase the survivability of the platform as well because the majority of Russian armored vehicles are effective against small ammunition and not the larger ones.
The prominent players in the market are BAE Systems plc, Rheinmetall AG, General Dynamics Corporation, Patria, Oshkosh Corporation, Inc., and Nexter group KNDS among others. The armored fighting vehicles market in Europe is a fragmented one with nearly 16 out of 18 manufacturers having serial production. The majority of armored fighting vehicles fleet is present in nearly 3-4 countries and therefore a need arises to equip other European countries with advanced fighting vehicles. Many countries are using the older generation fleet and collaboration towards the development of new fighting vehicles is anticipated to propel the growth of the market in these countries. Italy has initiated the Forza NEC program, which focuses on the digitization of armored vehicles by architecture configuration.
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