The military truck market is expected to register a CAGR of over 2% during the forecast period.
- The increasing deployment of military units in different locations and the growing military missions is increasing the demand for moving troops and supplies, hauling equipment to those areas and recovering vehicles and weapon systems during such missions, which is driving the growth of the market.
- Growing military budgets is fueling the growth of the market. Several emerging countries have increased their budget spending towards military transportation and logistics which is expected to drive the growth of the military trucks market during the forecast period.
Key Market Trends
Growing Defense Budgets Driving the Market
Several nations are now focusing on augmenting their military firepower and defensive capabilities, in the wake of the growing threats from other nations. In this regard, governments are increasing their military spending, in order to improve the security situation in their respective countries. According to SIPRI, the global military expenditure reached USD 1917 billion in 2019, an increase of 3.6% from 2018, which is the largest annual growth in spending since 2010. The United States, China, India, Russia, and Saudi Arabia were the five largest spenders in 2019. The growth in defense budgets will support the nations to enhance their combat capabilities and help them execute their defense strategies as planned. Several nations are enhancing their military personnel strength, due to which they are increasing their troop transportation and logistics capacities by allocating huge amounts towards military transportation systems, thereby driving the market for military trucks. The increasing military budgets have enabled the procurement of different types of military equipment. In this regard, the military trucks, play an important role as the prime mover for several weapons, sensors, and communication platforms, which is necessitating their procurement. Thus, the growth in defense budgets is helping the growth of the market during the forecast period.
North America Held the Largest Market Share in 2019
Based on geography, North America held the largest share in the market as of 2019. The region is also expected to show high revenue growth during the forecast period. The main reason for the higher revenue share of the region is the high demand for military transportation systems from the US. The US is currently increasing its military troops. As per the Defense Department 2021 budget request, the U.S. military is set to grow by about 5,600 troops across the services in the active and reserve components in the coming future. With this, the necessity of logistics and troop transportation is also expected to increase, which will drive the market for military trucks during the forecast period. In addition, the deployment of US troops in various regions of the world, due to the US engaging in various global conflicts, is one of the major factors driving the growth of revenues from the region. These military camps and command units demand continuous land-based logistics and unit resupply missions, due to which the country is procuring military trucks on a large scale. For instance, in 2019, the US Army Tank-automotive and Armaments Command (TACOM) Life Cycle Management Command (LCMC) has awarded a USD 75 million contract to Oshkosh Defense to supply 354 Family Medium Tactical Vehicles (FMTV) A1P2 trucks and trailers. Such contracts are envisioned to bolster the market prospects for the region during the forecast period.
Oshkosh Corporation Inc., Rheinmetall AG, Mercedes-Benz AG, Tata Motors, Krauss-Maffei Wegmann are some of the prominent players in the market. The manufacturers of the military trucks are continually looking for ways to develop newer generation trucks keeping in mind the rules and regulations set by the various defense authorities across the world. Players are focusing on enhancing the protection of their trucks, using newer designs and advancements in the material technologies, which will help them gain new contracts from the militaries and expand their market share during the forecast period.
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