In recent years, there has been an increase in the number of international conflicts such as the Syrian Civil War, the Lebanon Conflict, the India-Pakistan stalemate over Kashmir, the ongoing Israel-Palestine Conflict, and the conflict between Russia and Ukraine over Crimea. This increase in the tension across borders has led to an increase in the demand for military vehicles.
This shouldn’t come as a surprise. Conflicts like the one’s mentioned above will continue to rage. If and when they are settled, future conflicts will take their place. This perpetual cycle of war is a big reason why the Global Military Armored and Counter IED Vehicles Market is expected to post small yet stable growth at a CAGR of 2.58 percent for the 2013-2018 period.
The recent turmoil caused by international and civil conflicts has led many countries to increase their Defense Budgets. Military vehicles account for a significant share of these budgets. Countries such as China, India, Saudi Arabia, and Russia are expected to increase their defense budgets in the coming years. In 2014, the overall defense budgets are expected to increase by 0.6 percent over 2013 to US$1.55 trillion.
More money means more funds available for the global Defense Sector to invest into R&D. In an attempt to improve the existing technology, vendors are developing systems that can help augment the endurance and efficiency of weapons in harsh atmospheric conditions. For instance, there is an increase in the demand for military vehicles that require low maintenance and can counter explosive threats.
The increase in demand for military vehicles has put pressure on manufacturers of armored vehicles to update their products. Failure to meet the demand of the Defense Sector will result in vendors losing their market share. Recently, France announced plans to modernize its army. Under this program, the country will procure 2,500 armored vehicles. Delivery of these vehicles is expected to start by 2018.
Internationally, the increased threat of terrorism, the emergence of countries with nuclear capabilities, and the unconventional military threats have led to an increase in demand for defense products and homeland security solutions, and consequently an increase in the demand for military vehicles. For instance, the recent conflicts in the Middle East have led to a tightening of security across the region, which is expected to drive the demand for armored vehicles in the region.