Armoured revival

A German Leopard 2 tank on exercise. Credit: US Department of Defense

The procurement of main battle tanks (MBT) and infantry fighting vehicles (IFV) are the two most in-demand platforms in the military land vehicle market over the next decade, as factors like the Ukraine-Russia war, European rearmament, and China’s superpower status begin to take effect.

The market itself consists of eight categories: armored personnel carrier, IFV, MBT, armored multirole vehicle, tactical truck, support vehicle, armored engineering vehicle and light utility vehicle. Of these, the IFV and MBT segments would dominate the sector, at a share of 30.9% and 27.1% respectively, followed by armoured personnel carriers (18.1%), armoured multirole vehicles (10.7%), and tactical trucks (6.6%), making up the top five most in-demand platform types.

Analysis conducted by GlobalData in 2024 projected that the global military land vehicles market, valued at $31.6bn last year, was projected to grow at a compound annual growth rate of 4.3% over the forecast period to 2034. The market was expected to reach $48.3bn by 2034 and cumulatively value $431.2bn over the forecast period.

Among geographic segments, Europe is projected to dominate the sector with a share of 43.2%, followed by Asia-Pacific and North America with shares of 20.6% and 20.1%, respectively, indicating the Ukraine war and subsequent European rearmament are driving influences.

Major militaries worldwide are also looking at ways to better protect their investments, with a greater focus on the use of Active Protection Systems (APS) and superior ceramic armor. These advancements provide enhanced vehicle survivability and multi-layered protection against modern threats such as anti-tank munitions and improvised explosive devices.

In addition, uncrewed turrets, remote controlled weapon stations, and micro uncrewed aerial vehicles, along with increased automation and improved sensors, are also driving factors in development and acquisition.  

Now nearly three years since Moscow’s large-scale invasion of its neighbour in February 2022, the Ukraine-Russia war has seen the return to armoured warfare to Europe for the first time in generations. Losses have been huge, with Russia at the end of 2022 calculated as having lost more military equipment than seen during its two Chechen wars combined.

This has since spiralled to tens of thousands of armoured vehicles, Ukraine’s Ministry of Defence claiming as of 7 February 2025 nearly 10,000 Russian tanks and more than 20,000 armoured fighting vehicles have been knocked out. Ukraine’s losses are classified but thought to number many thousands of vehicles.

Much as Ukraine’s equipment has come from allies, with calculations conducted by Global Defence Technology in mid-2024 indicating that Western backers had pledged or provided more than 800 tanks to Ukraine since 2022, of which well over 100 had been lost in combat.

However, it took a year from early 2022 to early 2023 for Western backers to provide tank to Ukraine, starting with the UK and its commitment of 14 Challenger 2s, which likely represented nearly 10% of vehicles available to the British Army at the time. 

Since then, Ukraine’s military has modernised through the provision of a huge range of MBTs, from older ex-Soviet design Russian vehicles still operational in old eastern bloc countries, to modern Western behemoths such as the US Army’s M1A1 Abrams, the UK’s Challenger 2, or the European Leopard 2. 

However, it should be noted that this air-launched missile – more accurately considered an aeroballistic missile as it is not strictly ‘hypersonic’, lacking manoeuvrability at excessive speeds – is believed to be one of the least sophisticated weapons in Russia’s hypersonic arsenal.

Speaking to Global Defence Technology, William Freer, research fellow in national security, Council of Geostrategy, provided his assessment of the fledgling Russian Kinzhal:

“Initially it seemed that the Russians had the right idea in targeting Patriot batteries with their Kinzhals… However, it seems the Patriots were able to deal effectively with this threat, so the Russians no longer use them in this manner as far as I am aware,” Freer said.

Even the best laid plans do not survive the battlefield. Therefore, the Kinzhal was repurposed to enhance conventional missile salvos after their inability to penetrate Western air defence technologies on their own, despite Russian President Vladmir Putin’s bombastic praise of the Kinzhal since it was first produced in 2018. 

According to research conducted by the Kiel Institute for World Economy, from 24 January 2022 to 31 October 2024, Ukraine had also received 1,219 infantry fighting vehicles, such as the European CV90, US Bradley, German Marder, and assorted other types, with a combined value of over $1.5bn.

The number of unspecified platforms, such as armoured personnel carriers and mine resistant armour protected (MRAP) vehicles, donated to Ukraine is unknown, but it will certainly be in the thousands from Nato member states. Rough UK figures alone account for 160 Huskey MRAPs, 78 Bv-206/Viking ATVs, and some 500+ vehicles of assorted types.

Given the scale of support to Ukraine, it is difficult to determine exact numbers across datasets considered reasonably comprehensive, with those provided above a guide. For example, neither the tank or IFV datasets include the UK provision to Ukraine of an unknown number of its old Scimitar light tanks, of which around 97 were thought to be held in storage. The British Army no longer operates the type, so it is conceivable that the entire fleet was donated. 

Against this backdrop, a massive programme of armoured rearmament has begun, with Western militaries looking to replace donated equipment, modernise their fleets, and revert back to combined arms warfare doctrine. Other markets and countries, particularly in Asia, are similarly building up traditional armoured formations, as the world’s power shifts to a multipolar structure.

With fully 58% of the forecast armoured vehicle market share out to 2024, the need for IFVs and MBTs has never been higher, offering industry unique opportunities to capitalise on the demand.

Forecasts of the IFV market show that the estimated global market in 2025 of $9.7bn would rise to $10.7bn through to 2026, the largest single-year jump out to 2034 by which time the sector would be valued at nearly $15.2bn.

Among notable contracts in recent months was the December 2024 award to BAE Systems of a $656.2m deal to produce M2A4 Bradley IFV and M7A4 Bradley Fire Support Team (BFIST) vehicles for the US Army, due for completion by November 2027, in what was a continuation of the ongoing recapitalisation of the US’ Bradley fleet. 

While exact platform numbers for the deal were not revealed, extrapolating figures from previous contracts indicate the award will likely be for several hundred vehicles. The latest Bradley offering from BAE Systems comes in the form of the M2A4E1 variant, which incorporates an APS, improved gunner sight, and more efficient air conditioning for crew comfort.

Other procurement programmes that will contribute to the growth of the IFV market in the years ahead is the UK’s Ajax acquisition, which will see the delivery of 589 infantry and variant armoured vehicles to the British Army. Italy also looks set to be a main focus for IFV, with a purported planned acquisition of over 1,000 Rheinmetall KF-41 IFV and variant platforms over the next decade, in replacement of its VCC-80 Dardo fleet. 

It had been thought prior to the large-scale of Ukraine by Russia in February 2022, and Western experiences in counterinsurgency operations in the 2000s and 2010s, that the role of the main battle tank could be in jeopardy on the battlefield.

However, operations in Ukraine, as well as during Israel’s operations in Gaza, point to the continued relevance of a platform that moves into its second century of active use.

Forecasts of the main battle tank sector show that the estimated global market in 2025 of $9.07bn would rise nearly $9.6bn through to 2026, reaching $13.3bn by 2034.

Programmes are multiple across all major militaries, with Europe again a leading market as it moves to bolster its armoured capabilities against a very real threat in Russia. Such procurements over the coming decade include the UK’s Challenger 3 acquisition (148 vehicles), Poland K2 MBTs from South Korea (180 units, of which 77 have been delivered) and M1A2 (SEPv3) Abrams (250 on order, of which 28 are delivered), and Gemany’s planned Leopard 2A8 purchase, which will see around 120 units acquired into the 2030s.

China’s own MBT aspirations, as ever with the country’s military procurement, are opaque, although its development of the third-generation Type 99A tank by Norinco points towards its continued relevance for the CCP and the People’s Liberation Army. The UK’s International Institute for Strategic Studies states that China has around 1,300 Type 99 tanks in service.

The US remains the largest market for MBTs however and is forecast by GlobalData to spend nearly $10bn on land vehicle modernisation in 2034, up from around $6.4bn at present.  

As the Ukraine-Russia war rages, Western countries embark on a once-in-a-generation rearmament process, and China’s own rise to a superpower on parity with the United States, it looks as if Francis Fukuyama’s claim of a world entering The End of History, and the immovable dominance of Liberal Democracy, appears premature at best.

Across every calculable metric, the need and desire for armoured vehicles is increasing, with reasons including replenishment of battlefield losses (Russia is forecast to be spending $5.5bn by 2024 on tanks along), modernisation (see Germany’s spend that will top $2bn in the next decade), or recapitalisation (Poland will spend $221bn through to 2029 on military acquisitions).

This provides opportunity for an in the armoured vehicle industry able to provide flexibility in their sales processes to enter new markets (see Poland with the K2 MBT), embark on long-term development programmes such as the pan-European Main Ground Combat Systems initiative, or the modernisation of existing fleets (see the UK’s Challenger 3).

Older armoured platforms such as the CV90 IFV also continue to show their value, pointing further to the need for a design to offer a spiral development pathway over what is usually a multi-decade-long service life. 

Australia could be one of the main beneficiaries of this dramatic increase in demand, where private companies and local governments alike are eager to expand the country’s nascent rare earths production. In 2021, Australia produced the fourth-most rare earths in the world. It’s total annual production of 19,958 tonnes remains significantly less than the mammoth 152,407 tonnes produced by China, but a dramatic improvement over the 1,995 tonnes produced domestically in 2011.

The dominance of China in the rare earths space has also encouraged other countries, notably the US, to look further afield for rare earth deposits to diversify their supply of the increasingly vital minerals. With the US eager to ringfence rare earth production within its allies as part of the Inflation Reduction Act, including potentially allowing the Department of Defense to invest in Australian rare earths, there could be an unexpected windfall for Australian rare earths producers.