Armored Vehicles Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2025 - 2032)

Armored Vehicles Market Trends and Growth Drivers

Efforts to Improve ISR and Target Identification Capabilities Are Major Trends

• Defense forces must prioritize better monitoring of maritime and land borders, due to the rising number of terrorist attacks worldwide, particularly those that target border areas.
• The reaction time between the identification of threats and their interception is often very high, making it challenging for the armed forces to deal with the situation successfully and quickly in some circumstances.
• Since robots can conduct enhanced cross-border surveillance and intelligence gathering with a quicker reaction and greater precision, they can serve as the ideal human substitute in certain situations.
• Such robots can efficiently and successfully patrol national boundaries and continuously transmit up-to-the-second information to ground stations. Such vehicles are being provided with armor for enhanced durability.
• Moreover, as they are deployed by defense forces of many nations to carry out target acquisition and surveillance activities, such robots are increasing in demand all over the world, which propels the overall armored vehicles market expansion.

Rising Defense Expenditure Fuels Market

• The key factors driving the growth of the armored vehicles market are the ever-increasing security challenges, faced by government bodies and civilians across the globe, on account of the rising terrorism rate and number of political disputes.
• Additionally, the increasing investment for militarization of law enforcement agencies as part of modernization programs and for weaponry used in advanced combat and counter-terrorist operations, is expected to further propel the demand for armored vehicles during the forecast period.
• Another major driver for the armored vehicles market is the different initiatives being taken by governments across the world for the purpose of protecting the civilians.
• The government of various countries are demanding the latest machinery, in order to counter militant attacks or any emergencies caused due to insurgency.
• Additionally, the growing number of public riots and criminal activities, on the grounds of religion and disparity, in the Asia-Pacific (APAC) and Middle East and Africa (MEA) regions, is further expected to surge the demand for armored vehicles.
• As per the Stockholm International Peace Research Institute, global defense spending has been continuously rising since 2014.
• The top five military powers—the U.S., China, India, Russia, and Saudi Arabia—collectively spent USD 1,481 billion on defense supplies in 2023.
• While the U.S. remained the largest spender, pouring in USD 916 billion, Russia had the biggest increase, spending a massive 24% more in 2023 than 2022.

Armored Vehicles Market Analysis

Product Analysis

Combat vehicles hold the largest share, of 60%, in 2024, credited to the growing geopolitical tension around the world. The Russia–Ukraine conflict, Israel–Hamas–Hezbollah–Houthi situation, and the constant India–Pakistan and India–China hostilities continue to propel the demand for armored combat vehicles. As per the Stockholm International Peace Research Institute, global defense spending grew by 6.8% from 2022 to 2023, reaching USD 2,443 billion. The money is for the acquisition of everything from assault rifles, pistols, and bullets to warships, fighter aircrafts, and main battle tanks.

The combat support bifurcation will have the higher CAGR during the forecast period. This is because of the rising focus on effective support during combat operations in the form of medical and food supplies, logistics, signaling and communications, onsite infrastructure setup (such as temporary bridges), and casualty evacuation. Additionally, defense establishments are looking for versatile combat support vehicles that are adaptable and can be easily modified for different purposes. The rising adoption of asymmetric warfare, wherein the combatants are often not regular military personnel, fuels the market growth in this category.

The following products are analyzed:

• Combat Vehicles (Larger Category)
  • Armored personnel carrier (APC)
  • Infantry fighting vehicles (IFV)
  • Light protected vehicles (LPV)
  • Main battle tanks (MBT)
  • Mine-resistant ambush-protected (MRAP) vehicles
  • Tactical vehicles
  • Others
• Combat Support Vehicles (Faster-Growing Category)
  • Armored supply trucks
  • Armored command & control vehicles
  • Repair & recovery vehicles
  • Unmanned armored ground vehicles (UAGV)
  • Others

Propulsion Analysis

The conventional bifurcation holds the larger share are most combat and combat support vehicles run on diesel engines. This propulsion offers the desired power and load capacity during military operations and speed in case of high-profile rescue missions. Further, diesel propulsion is cost-effective over electric propulsion and offers maneuverability on varied terrain, including deserts, mountains, and wooded area.

The electric category will witness the higher CAGR during the forecast period, of 4%. This will be due to the global shift to electric vehicles in order to reduce emissions. Additionally, electric vehicles are a lot quieter than those with internal combustion engines, which is crucial for stealthy operations and ambushes. Therefore, an increasing number of OEMs are developing electric and hybrid electric armored vehicles customized to national specifications. The U.S. military has already been testing hybrid electric Humvee for deployment across the world.

The report offers insights into these propulsions:

• Conventional (Larger Category)
• Electric (Faster-Growing Category)

Mode of Operation Analysis

The manned bifurcation holds the larger share, 80%. This is because manned vehicles are vastly used in military operations around the world. This is due to the mounting demand for armored personnel carriers (APCs) and light protected vehicles (LPVs) across the globe. Moreover, the burgeoning defense budgets and growing need for these platforms, especially in Asian countries, fuel the market growth. Their key aim is to protect the occupants inside, such as gunners & commanders, higher-ranking military officers, politicians, and prominent businesspersons and celebrities, from small arms fire, grenades, and IEDs. Additionally, based on national requirements, OEMs customize several specifications of these vehicles, such as occupancy and the armor itself.

Unmanned armored ground vehicles will register the faster growth during this decade. This can be ascribed to the growing demand for them owing to their essential function in supporting terrestrial combat and assisting logistics operations onshore, as they can operate in a range of high-risk situations. Moreover, numerous industry giants are investing heavily in R&D to develop indigenous technologies for armored UGVs.

We studied the following modes of operation:

• Manned (Larger Category)
• Unmanned (Faster-Growing Category)

Mobility Analysis

The wheeled category accounts for the larger revenue share in 2024, and it will register the faster growth in the coming years. Such automobiles are gaining popularity due to their low weight, better mobility, and improved combat capabilities. Additionally, the rising incidence of terrorist and hostile attacks in urban areas creates a strong need for armored cars and other wheeled vehicles.

The segment is bifurcated as below:

• Wheeled (Larger and Faster-Growing Category)
• Tracked

Application Analysis

The defense category accounts for the largest share of the revenue in 2024, and it is further expected to maintain its dominance during the forecast period. This can be attributed to the mounting usage of armored personnel carriers (APCs), infantry fighting vehicles (IFVs), LPVs, MBTs, mine-resistant ambush-protected (MRAP), and tactical vehicles for different purposes, growing need to protect armed forces personnel from mine explosions, and the strong focus on safer deployment of infantrymen to battlegrounds or high-risk areas. Moreover, the burgeoning terrorism and cross-border criminal activities have triggered asymmetric warfare between nations, which is expected to further propel the demand for such defense-grade automobiles.

The commercial bifurcation will witness the highest CAGR, of 4.5%, over the forecast period. This is attributed to the increasing concerns over the lives of high-ranking politicians, law enforcement officials, and celebrities. In a volatile geopolitical environment, these and other VIPs are receiving a rising number of death threats, which persuades them to adopt armored vehicles for their protection.

These applications are part of the research scope:

• Defense (Largest Category)
• Commercial (Fastest-Growing Category)
• Others

Armored Vehicles Market Geographical Outlook

North America accounts for the largest revenue share, of 40%, in 2024, and it is further expected to maintain its dominance during the forecast period. This can be attributed to the presence of a large number of military machinery and equipment manufacturers, high adoption rate of advanced technology, and ongoing programs under which the U.S. government is collaborating with industry players to develop advanced vehicles for defense purposes.

The U.S. contributed the majority of the revenue to the market in 2021, and it will further continue the trend in this decade, owing to the rising spending on sea, air, and land-based military equipment, to maintain its military supremacy. Moreover, the nation is heavily investing in the development of newer-generation armored cars, trucks, and tanks.

APAC will register the fastest growth during this decade, at a CAGR of 5%. This can be ascribed to the increasing need for armored vehicles owing to the rising terrorism and cross-border issues, complex geopolitics, growing demand for the modernization of the military, and rising number of industry players. In addition, the growing military spending and increasing demand for medium-sized LPVs for patrolling operations are expected to boost the market growth in the region over the forecast period. Furthermore,

Emerging economies, such as China, India, and South Korea, are the major buyers in the APAC market. This can be ascribed to the growing need for new and highly efficient defense vehicles, owing to the growing count of conflicts among neighboring nations; rising spending to strengthen the military, and several programs of local governments to develop high-tech ammunition and automobiles with the support of local manufacturers.

China holds the largest revenue share in the regional market owing to the large manufacturing base for military equipment, easy availability of resources, and cost-effectiveness of labor.

Europe too holds a significant revenue share due to the increasing frequency of border conflicts among neighboring countries, for instance, the Russia–Ukraine War. Moreover, considering the burgeoning terrorism activities, several governments in the EU are increasingly aiming at procuring vehicles for battle and personnel transportation, for strengthening their defense capabilities. This would also be due to the growing usage of advanced technology in army machinery, rising concerns regarding border safety, and surging frequency of hostile attacks.

Below is the regional breakdown of the market:

• North America (Largest Regional Market)
  • U.S. (Larger and Faster-Growing Country Market)
  • Canada
• Europe
  • Germany (Largest Country Market)
  • France (Fastest-Growing Country Market)
  • U.K.
  • Italy
  • Spain
  • Rest of Europe
• Asia-Pacific (APAC) (Fastest-Growing Regional Market)
  • China (Largest Country Market)
  • India (Fastest-Growing Country Market)
  • Japan
  • South Korea
  • Australia
  • Rest of APAC
• Latin America (LATAM)
  • Brazil (Largest and Fastest-Growing Country Market)
  • Mexico
  • Rest of LATAM
• Middle East and Africa (MEA)
  • Saudi Arabia (Largest and Fastest-Growing Country Market)
  • South Africa
  • Rest of MEA

Armored Vehicles Market Share

Armored Vehicles Market News

• In December 2024, Rheinmetall AG tested the radio and data transmission capabilities of its mobile combat training center MCTC Legatus for the German Armed Forces deployed in Lithuania.
• In November 2024, General Dynamics Corporation received a contract from Latvian Ministry of Defense for tracked combat vehicles named ASCOD. The vehicle features ample interior space despite compact dimensions, easy maneuverability, and additional modular armor for protection from land mines.
• In November 2024, Elbit Systems Ltd. received a USD 127-million contract to upgrade the Bradley infantry fighting vehicles of the U.S. Army with Iron Fist active protection systems.
• In October 2024, Textron Inc. delivered its RIPSAW M3 prototype for Robotic Combat Vehicle (RCV) Phase I: Platform Prototype program of the U.S. Army.