Defence Insight: Year in review (Land)
The past 12 months have proven to be a particularly eventful year for the armoured vehicle market, with several major contracts finalised, decisions announced and new products unveiled. Not only do these developments reinforce many of the existing trends in the market, but they also provide a glimpse into its future and suggest that it may be entering a period of transition.
Reflecting the continued pre-eminence of the wheeled sector of the market, the trade shows this year were dominated by new wheeled platforms ranging from light, tactical 4x4 protected vehicles to heavier 8x8 IFVs.
A significant number of these platforms emanated from up and coming manufacturers based in countries not typically associated with the production of armoured vehicles, such as the UAE, which demonstrated the imposing Calidus Wahash 8x8 at IDEX in the beginning of the year, and Thailand, where expanded product ranges comprising 4x4s, MRAPs and 8x8s were showcased by Chaiseri and Panus Assembly at D&S in November.
The diversification of the supplier base is a testament to the confidence among OEMs that there will be sufficient demand for these types of platforms in the near future to justify this investment. Moreover, the emergence of smaller enterprises aimed primarily at supplying their local and regional markets points to the importance of local industrial participation, investment and offsets in securing contracts, with governments keen to see their own industrial base profit from major defence programmes.
This has had an especially noticeable effect on the wheeled armoured vehicle market across the globe. Apart from a few government-to-government sales (notably the sale of the Oshkosh JLTV to Montenegro, Lithuania and Slovenia – all countries without an established defence industry), most of the major contracts in this sector stipulated a large degree of local participation, whether it be the British Army’s contract for the Boxer 8x8 or Indonesia’s agreement for PT Pindad to licence-produce the Pandur II 8x8.
Although the flurry of contracts announced in 2019 and the continuation of several ongoing tenders suggests a healthy, growing market in the near-term future, the question of how sustainable this growth will be must also be addressed. With 8x8 platforms set to have a service life of perhaps as many as 40 years, it is possible that the market will not remain large enough to accommodate everyone.
Yet while the wheeled market shows no signs of stalling in the short-term, 2019 was perhaps more remarkable for several milestones in the procurement of new tracked armoured vehicles. Having somewhat neglected their tracked armoured vehicle fleets since the end of the Cold War, Western militaries have begun to seek replacements for legacy platforms that will be more capable in a potential near-peer conflict.
Two major procurement programmes encapsulate the resurgence of activity in the tracked vehicle market: the US Army’s Optionally Manned Fighting Vehicle (OMFV) and the Australian Army’s Land 400 Phase 3 tender, both of which are intended to select a new tracked IFV.
The former saw a particularly contentious development as the KF41 Lynx, considered to be a favourite among many commentators, was excluded from competing the prototype phase on a technicality, leaving General Dynamics Land Systems as the sole competitor. While this has led to fears of insufficient competition and that the technical requirements may not be feasible, the Army’s decision to stick to its ambitious timetable shows that there is now a sense that new platforms must be procured urgently to address such capability shortfalls.
Conversely, there have been fewer signs of activity in the realm of MBTs, though Russia has carried out numerous deliveries and signed new contracts for export variants of its T-72 and T-90 MBTs. For many militaries, the emphasis continues to be on upgrading ever-diminishing fleets of Cold War-era tanks, as the procurement of new platforms is not forecast until the distant future. Therefore, while there are some requirements for new MBTs in countries such as Oman, the MBT market is not expected to see a dramatic uptick in spending until later in the following decade.
Moving to self-propelled artillery, the market for these systems continued to show strong growth in 2019, though there are also signs of change. Due to the emphasis on expeditionary operations, systems based on wheeled chassis have become more prominent as a result of their greater strategic and operational mobility compared to their tracked counterparts.
Nevertheless, the incursion of wheeled platforms has not entirely displaced traditional tracked systems. For instance, in Europe, one of the most active regions of this market, the first Hanwha K9 Thunder was delivered to Norway this year, Estonia exercised an option for an additional six K9s and Poland took delivery of another battalion of Krabs.
Overall, no sector of the armoured vehicles market has lain dormant during 2019. In terms of value and activity, the wheeled armoured vehicle segment continues to retain its dominant position. However, 2019 also signals a transition toward the procurement of more tracked vehicles, which Defence Insight anticipates could see the balance in the market shift by the middle of the next decade.
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