Armored Vehicles Market

Armored Vehicles Market Size and Share:

The global armored vehicles market size was valued at USD 18.80 Billion in 2024. Looking forward, IMARC Group estimates the market to reach USD 29.44 Billion by 2033, exhibiting a CAGR of 5.06% during 2025-2033. North America currently dominates the market. The rising military modernization programs to replace aging fleets with more advanced and efficient models, increasing emphasis on enhancing the survivability and mobility, and the expansion in emerging markets are various factors impelling the market growth.

Due to the changing aspect of security concerns, governments worldwide are now allocating greater percentages of their budget to defense. This increase in spending allows military forces to modernize their fleets, including acquiring more advanced armored vehicles. In the United States, defense spending has consistently been a significant portion of the federal budget. For Fiscal Year 2024, the Department of Defense (DoD) requested substantial funds for various programs, including armored vehicles. Specifically, the budget for the "Procurement of Weapons and Tracked Combat Vehicles, Army" was approximately $3.77 billion. This allocation underscores the U.S. government's commitment to maintaining and enhancing its military capabilities, directly influencing the armored vehicles market. Moreover, modern warfare demands vehicles with enhanced mobility, better protection, and advanced weapon systems, which translates to increased investments in these technologies.

The United States stands out as a key market disruptor, as the country’s defense industry is at the forefront of integrating advanced technologies into armored vehicles. For instance, the development and procurement of the Armored Multi-Purpose Vehicle (AMPV) have been significant. In March 2024, a contract modification worth approximately $754 million was awarded to BAE Systems for the procurement of AMPVs, highlighting the emphasis on modernizing the fleet with technologically advanced vehicles. Moreover, the overall emphasis on security and defense in the U.S. is supporting the armored vehicle market. The continuous investment in defense and security measures reflects the nation's commitment to protecting its citizens, which includes the utilization of armored vehicles by law enforcement agencies.

Armored Vehicles Market Trends

Rising Defense Expenditures

As global geopolitical tensions are rising, many countries are significantly increasing their defense budgets. According to the Stockholm International Peace Research Institute, worldwide military expenditure increased for the ninth consecutive year in 2023, reaching a total of USD 2,443 Billion. Nations, such as the United States, China, India, and Russia, are leading this trend by prioritizing the acquisition of advanced military assets including armored vehicles. Governing agencies of these countries are focusing on modernizing their armed forces to deal with both external threats and internal security challenges such as terrorism and insurgencies. Defense budget allocations are often aimed at upgrading existing fleets, which benefits in increasing armored vehicles market share. Governing authorities are also investing in next-generation armored vehicles with enhanced capabilities like improved protection, mobility, and firepower. Furthermore, rising defense spending is often accompanied by government defense procurement policies that prioritize local manufacturing, spurring growth in domestic armored vehicle production. These factors create a strong and sustained demand for armored vehicles, ensuring market expansion over the coming years.

Growing Threats of Terrorism and Internal Conflicts

Increasing global instability, characterized by the rise of terrorism, cross-border conflicts, and internal unrest is influencing the market. The Vision of Humanity reports that over 90% of terrorist attacks and 98% of terrorism deaths occurred in 2023 in conflict zones, underscoring the strong link between conflict and terrorism. Countries facing persistent threats from terrorist organizations or insurgencies, particularly in regions like the Middle East, Africa, and South Asia, are investing in armored vehicles for military, paramilitary, and law enforcement purposes. These vehicles are vital for ensuring operational success in hostile environments, offering protection to troops and civilians alike. In line with this, these vehicles play a critical role in border patrol and internal security operations in countries experiencing civil unrest. Governing authorities are prioritizing the procurement of versatile armored vehicles that can perform across various terrains, ranging from urban centers to remote conflict zones.

Technological Advancements

Innovations aid in enhanced the capabilities and attractiveness of modern vehicles. Modular armor systems, advanced weaponry, integrated communication platforms, and autonomous navigation systems are presently changing the use of these devices. Lightweight materials are being increasingly used to improve vehicle mobility without compromising protection, allowing vehicles to be more agile in diverse operational environments. Automation and artificial intelligence (AI) are also revolutionizing vehicle operations, enabling semi-autonomous or fully autonomous capabilities for tasks such as surveillance, logistics support, and battlefield engagement. According to the IMARC Group, the military robotics and autonomous systems market reached USD 11.2 Billion in 2023. These advancements are encouraging both new acquisitions and the retrofitting of existing armored fleets, making them more efficient, safer, and capable of handling modern-day military challenges. The armored vehicles market forecast indicates steady growth, driven by advancements in modular armor, AI-powered automation, and lightweight materials, enhancing operational efficiency.

Increasing Demand for Hybrid Electric Technology

The increasing adoption of hybrid electric technology, which offer significant advantages for military operations, is bolstering the market growth. Hybrid electric propulsion enhances fuel efficiency, reducing logistical challenges associated with fuel supply in combat zones. This technology also enables quieter operations, improving stealth capabilities and reducing the risk of detection in reconnaissance and surveillance missions. Enhanced power management supports advanced weapon systems, electronic warfare capabilities, and integrated communication networks without overloading traditional power sources. Additionally, hybrid systems provide greater operational range and lower maintenance costs, making them a cost-effective solution for defense forces. Defense strategies are prioritizing energy-efficient and high-performance technologies, which is leading to the development and adoption of hybrid electric armored vehicles. In 2024, Rolls-Royce unveiled a hybrid diesel engine concept at Eurosatory, enhancing armored vehicle stealth and efficiency. The system allows silent operation on battery power, reducing noise and heat signatures. It also improves acceleration, supports energy weapons, and integrates with NATO's mtu Series 199 engines.

Armored Vehicles Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the global armored vehicles market, along with forecast at the global, regional, and country levels from 2025-2033. The market has been categorized based on product, system, and drive type.

Analysis by Product:

• Defense 
  • Armored Personnel Carrier (APC)
  • Infantry Fighting Vehicles (IFVs)
  • Light Protected Vehicles (LPVs)
  • Main Battle Tanks (MBTs)
  • Mine-resistant Ambush Protected (MRAP)
  • Tactical Vehicle
  • Others
• Commercial 
  • Bus/Van
  • Limousine
  • Sedan
  • SUV
  • Others

The defense sector dominates the armored vehicles market in 2024 because of its critical importance in military operations and homeland security. This majorily includes main battle tanks, armored personnel carriers, infantry fighting vehicles, and mine-resistant ambush-protected (MRAP) vehicles. The necessity for these vehicles arises primarily from the ongoing modernization programs and defense budgets and the need for advanced capabilities against emerging threats. For instance, the United States raised defense spending and earmarked a hefty amount for armored vehicle procurement and upgrades. In addition to mobility enhancement, survivability, and firepower for modern battlefield scenarios, acceleration of innovation in this segment is due to its growing demand through each passing year. Likewise, certain geopolitical tensions as well as regional conflicts further fuel the demand for these armored vehicles because they are robust-metallic and utilize advanced technology in their construction.

Analysis by System:

• Engine
• Drive System
• Ballistic Armor
• Turret Drives
• Ammunition Handling System
• Fire Control Systems (FCS)
• Armaments
• Countermeasure System
• Command and Control (C2) System
• Power System
• Navigation System
• Observation and Display System
• Hulls/Frames

The engine system forms the backbone of any armored vehicle, providing the necessary power for mobility and performance. Modern armored vehicles are equipped with advanced diesel or hybrid engines designed to handle extreme terrains and combat situations. This has led to the development of new technologies regarding engine technology with increased fuel efficiency and reduced emissions, such as hybrid-electric propulsion systems. For instance, the U.S. Army’s Next-Generation Combat Vehicle (NGCV) program emphasizes hybrid powertrains to enhance operational range and reduce the logistical footprint. This system segment is witnessing growth due to its role in ensuring reliability and adaptability in diverse environments.

The drive system is an important part of the mobility and maneuverability of armored vehicles. It includes components like transmissions, axles, and suspension systems that work together to navigate challenging terrains. With the growing emphasis on operational mobility in modern warfare, manufacturers are incorporating advanced drive systems like all-wheel drive and independent suspension to enhance performance. For example, the U.S. Army’s AMPV program features advanced suspension systems that provide superior off-road capability and stability. The drive system is an important part of the mobility and maneuverability of armored vehicles.

Ballistic armor is a critical system in armored vehicles, ensuring the protection of crew and equipment against various threats such as bullets, explosives, and shrapnel. Advances in materials science make it possible to make lightweight yet highly effective armor from composite and ceramic-based material solutions. For instance, vehicles like the Bradley Fighting Vehicle are equipped with reactive and modular armor systems to counter modern threats. The rising need for survivability in high-threat environments, coupled with technological advancements, makes ballistic armor a key growth segment within the market.

Turret drives are essential for the effective operation of weapon systems in armored vehicles, enabling precise aiming and firing in dynamic combat scenarios. Modern turret drives integrate advanced technologies such as stabilization, automated targeting, and electric actuation to enhance combat efficiency. The adoption of unmanned turret systems, as seen in vehicles like the U.S. Army’s M2A4 Bradley, further underscores the importance of this segment. The increasing use of advanced turret drives to improve lethality and accuracy is contributing to the expansion of this market segment.

Ammunition handling systems streamline the storage, loading, and deployment of munitions in armored vehicles, ensuring operational efficiency and crew safety. These systems are increasingly automated, reducing human involvement and enhancing firing speed and precision. Innovations like the autoloader systems in main battle tanks, such as the M1A2 Abrams, demonstrate the growing demand for sophisticated ammunition handling solutions. The emphasis on maximizing firepower while minimizing manual intervention has made this segment a vital area of development in the armored vehicles market.

Analysis by Drive Type:

• Wheeled
• Tracked

Wheeled armored vehicles accounts for the largest share of the market forecast in 2024 due to versatility, cost-effectiveness, and adaptability to various operational environments. Wheeled vehicles, including armored personal carriers (APCs) and mine-resistant ambush-protected (MRAP) vehicles, transport, conduct reconnaissance missions and perform rapid responses. They provide speed and fuel efficiency that outstrip tracked vehicles making them ideal for urban and highway operations. For instance, the U.S. military has been relying on wheeled vehicles like the Joint Light Tactical Vehicle (JLTV) to perform combat and logistical roles. Much of the demand for wheeled armored vehicles is because of their ease of maintenance, low lifecycle cost, and a greater emphasis on mobility among modern military strategies. In addition, developments like enhanced suspension systems and all-wheel drive technology have also helped in improving their off-road capability thus holding them on the market's leading segment.

Regional Analysis:

• North America
  • United States
  • Canada
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia
  • Indonesia
  • Others
• Europe
  • Germany
  • France
  • United Kingdom
  • Italy
  • Spain
  • Russia
  • Others
• Latin America
  • Brazil
  • Mexico
  • Others
• Middle East and Africa

North America's market held the largest share in 2024, with the United States being the primary contributor to its growth. Leadership of this area is driven by extensive defense budgets, advanced technological capabilities, and a strong focus on military modernization. The defense budget of the U.S. for 2024 stood at over $842 billion, a considerable portion of this amount being used for procuring and developing advanced armored vehicles such as the Joint Light Tactical Vehicle (JLTV) and Armored Multi-Purpose Vehicle (AMPV). Furthermore, initiatives under the Next-Generation Combat Vehicle (NGCV) Program are ongoing. The programs indicate that the region intends to improve mobility, protection, and firepower for future wars. Moreover, the market also features high-end manufacturers that are synergized to have strong R&D investment. Geopolitical factors such as security assistance to allied nations have also propelled production and exports of armored vehicles, reinforcing the region's position as the largest segment in the global market.

Key Regional Takeaways:

United States Armored Vehicles Market Analysis

Increased military spending is a leading factor, with the US Department of Defense allocating huge budgets for upgrading and expanding its armored vehicle fleet. This investment is being made to sustain national security along with a keen edge in globally competing defense power. According to USA Facts, in 2023, the USA military spent as much as approx. USD 820.3 or about 13.3 % of the absolute federal budget for FY 2023. In March 2023, the Department of Defense DoD proposed to Congress a budget of USD 842.0 billion for 2024, a 2.6% increase. The force remains highly anticipated as a result of escalating geopolitical tensions and changes in the character of warfare. The increasing asymmetric conflict incidences and global war scenarios demand advancement of armored vehicles with a high level of protection and mobility. The modernizing aging fleets with next-generation combat vehicles, including the Joint Light Tactical Vehicle (JLTV) and the Armored Multi-Purpose Vehicle (AMPV), is indicative of the trend for the US military. Besides that, technological advancement significantly contributes to the expansion of the market. Artificial intelligence, highly sophisticated sensors, and autonomous systems are being integrated into armored vehicles for more operational effectiveness and survivability in the battlefield. These developments address increased military demand for enhanced intelligence, surveillance and reconnaissance, and target acquisition. Thus, defense spending, the requirement to handle modern warfare issues, technological innovation, and strategic funding of the industry help propel the US armored vehicles market.

Asia Pacific Armored Vehicles Market Analysis

The market in the Asia Pacific region has grown due to several dynamics. From the rising geopolitical tensions and territory disputes, these events have made countries such as China, India, and South Korea develop their defense capabilities through acquiring advanced vehicles. In accordance with the findings of the U.S. Department of State, as of 2023, the NIA investigated 21 terrorism-related cases and arrested 65 suspects with attachments to ISIS in India. In addition, the need for the modernization of the army as countries are moving toward modern armored mobility in place of obsolete equipment to provide better mobility, protection, and firepower is a contributing factor. It is evident in the region's procurement of new combat vehicles and the development of indigenous defense industries. The introduction of unmanned systems, artificial intelligence (AI), and improved situational awareness features that lead to armored vehicles that are more survivable and resourceful to the changing needs of modern warfare is also fueling the market expansion. Along with this, expanded defense budgets across the region are supporting the acquisition of such advanced systems, thereby strengthening the growth of the market. In addition, governments in the region are spending more to build military capabilities and further push the market of armored vehicles. Therefore, the Asia-Pacific armored vehicles market has great potential in regard to rising geopolitical tension, military modernization, technological development, and growing defense spending. 

Europe Armored Vehicles Market Analysis

Geopolitical instability, such as that of Ukraine, is urging European nations to enhance their defense systems by developing advanced armored vehicles. Moreover, in view of these security concerns, a huge budget increase is expected among the European countries for their defense services. According to the European Commission, a budget of close to USD 8.21 billion for 2021-2027 is dedicated to the European Defense Fund. Technology is another aspect that fuels the growth of this market. For example, the application of artificial intelligence in unmanned systems, combined with advanced communication technologies, is growing with respect to armored vehicles' improved operational effectiveness and survivability in modern battlefields characterized by increased reliance on rapid information-sharing and autonomous operations. Additionally, the European defense industry is experiencing consolidation and collaboration among key players. Partnerships are leading to the production of new combat tanks and armored vehicles to meet the demand for modern military equipment. Besides this, the pressure for sustainability and environmental regulations is driving the development of hybrid and electric propulsion systems for armored vehicles. These innovations aim to reduce fuel consumption and minimize the carbon footprint. Furthermore, European manufacturers are exporting advanced armored vehicles to regions, such as the Middle East and Asia, boosting production capacity and technological innovation.

Latin America Armored Vehicles Market Analysis

The demand of armored vehicle market is growing in the Latin American region for many reasons. One of the factors is the rising security threats that come in forms like organized crime and civil unrest, thus leading countries to intensify their defense systems and increase the demand for armored vehicles. Reports show that the homicide rate in most parts of Latin America is thrice that of the world's average. Other contributing factors include the need for modernization of the military where countries emphasize on getting rid of old equipment and procure new ones as this improves mobility and protection through technology. Such developments include modern communications systems and improvement of armor materials. Other factors that strengthened partnerships between local manufacturers and international defense companies to come up with affordable solutions that suit the local environment is propelling the market expansion. All these factors catalytically lead to the development of the armored vehicle market in the region.

Middle East and Africa Armored Vehicles Market Analysis

The armored vehicles market in the Middle East and Africa has seen a favorable trend due to various factors in the region. Regional security challenges, threats of terrorism, and geopolitical upheavals among countries prompted them to increase their defense budgets for boosting armored vehicle acquisitions. Military modernization deals are also a major factor where nations are acquiring replacement armor because of the aging of equipment to improve mobility, cover, or operational efficiency. As per IMARC Group, the Saudi Arabia defense market is projected to register a CAGR growth of 3.96% during the period between 2024 and 2032. The market in this region also entails multiple advances in technology, including improvements in communication systems and armor materials for applicability in engine industries. In addition to that, establishment of biennial cost-saving solutions that fit into regional needs with collaborative partnerships with local manufacturing base and foreign defense companies is a contributing trend.

Competitive Landscape:

Through collaborations, increased manufacturing capabilities, and innovation, major industry participants are propelling the armored vehicles market growth. They are focusing on the development of innovative technologies like autonomous driving systems, active protection systems, and hybrid propulsion to fulfill current combat and security requirements. To meet a variety of operational needs, significant R&D expenditures are also directed toward improving vehicle mobility, survivability, and adaptability. By working together with governments and defense agencies, they are expanding their market reach and providing customized solutions for military modernization initiatives. Additionally, as a result of growing defense spending and geopolitical concerns, manufacturers are boosting production to meet the growing demand worldwide.

The report provides a comprehensive analysis of the competitive landscape in the armored vehicles market with detailed profiles of all major companies, including:

• BAE Systems plc
• Elbit Systems Ltd.
• General Dynamics Corporation
• INKAS Armored Vehicle Manufacturing
• International Armored Group
• IVECO
• Krauss-Maffei Wegmann GmbH & Co. KG (KMW+Nexter Defense Systems N.V.)
• Lenco Armored Vehicles Inc
• Lockheed Martin Corporation
• Oshkosh Defense, LLC (Oshkosh Corporation)
• Rheinmetall AG
• Textron Inc. 

Latest News and Developments:

• September 2024: Morocco partnered with India’s Tata Advanced Systems Limited (TASL) to locally produce WhAP 8×8 armored combat vehicles in Casablanca. The facility will begin operations within a year, aiming to manufacture 100 vehicles annually and expand Morocco’s defense industry. The project includes financial incentives and plans to increase local integration to 50% over time.
• July 2024: Indra launched a research lab in Spain to develop and enhance mission systems for the Spanish Army’s 8x8 Dragon and tracked support vehicles. The lab enables software evolution, training, maintenance, and testing, ensuring technological advancement throughout the vehicles’ lifecycle. Indra is also involved in European R&D projects for next-generation armored systems.
• December 2024: INKAS Armored Vehicle Manufacturing unveiled the world's first Armored Lexus GX 550. This vehicle smoothly integrates Lexus' characteristic bold style and powerful driving technologies with discrete armored protection. INKAS expertly constructed the armored Lexus GX 550, which enhances the original vehicle's robustness and athletic characteristics with military-grade improvements. 
• August 2024: Hanwha Aerospace inaugurated the Hanwha Armoured Vehicle Centre of Excellence (H-ACE) in Geelong, Australia, marking a significant milestone as the first overseas production base for a Korean defense company. The facility will produce the AS9 Self-Propelled Howitzer and AS10 Armoured Ammunition Resupply Vehicle, alongside the Redback Infantry Fighting Vehicle. This development aims to enhance the defense relationship between Australia and South Korea, integrating local companies into Hanwha's global supply chain, while promoting high-tech vehicle manufacturing in the region.
• November 2023: The United States granted Oshkosh Defense a USD 208 million contract to deliver Joint Light Tactical Vehicles (JLTV), associated trailers, packages, and installed kits. The tranche will be dispersed to the US Army, Air Force, and Marine Corps once delivered. The JLTV was designed to replace the US military's soon-to-be-retired high mobility multipurpose wheeled vehicles, also known as Humvees, produced by AM General. The new fleet has increased cargo capacity and protection and greater battlefield mobility.
• March 2023: Germany announced plans to acquire over 100 Australian-made combat vehicles to enhance its military capabilities, as part of a modernization effort following years of underfunding. An agreement was signed between German and Australian officials for these combat reconnaissance vehicles, based on the Boxer armored fighting vehicle, featuring a 30mm gun. Deliveries are expected to begin in 2025, funded by a €100 billion military modernization initiative established after Russia's invasion of Ukraine. This move aims to replace outdated Wiesel 2 armored vehicles.

Armored Vehicles Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the armored vehicles market from 2019-2033.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the global armored vehicles market.
• The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key country-level markets within each region.
• Porter's Five Forces analysis assists stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the armored vehicles industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.