Land Combat Systems

There are multiple security drivers that shape the global combat vehicle market. Most prevalent and enduring amongst these drivers are current and anticipated future threats, obsolescence of current capabilities, and the size of defense budgets. These three factors shape the market by creating demands for capabilities necessary to deter or defeat adversaries within each nation’s means.

This chapter provides an overview of the global combat vehicle market by describing security drivers, market and vehicle trends, global firms, key products, and recent technological innovations. It also provides general analysis and conclusions about the worldwide combat vehicle market. Subsequent chapters provide greater detail and analysis of regional and national combat vehicle markets and stand on their own to allow the reader interest driven investigation.

Global Tensions. The most important driver of demand for combat vehicles in the global market is the nature and extent of the threats nations face. Areas of the world experiencing considerable amount of interstate tensions and conflicts, such as the Middle East and North Africa, generally have a relatively high demand for combat vehicles. Regions of the world experiencing low levels of interstate tension and conflict, such as South America, spend very little on combat vehicles. Indeed, significant spending on acquiring, upgrading and sustaining combat vehicles was
observed during the last two decades in the following “hot spots” around the globe:

• Afghanistan (civil war)
• Algeria – Morocco (territorial conflict)
• Armenia – Azerbaijan (territorial and ethnic conflict)
• China – Japan (tensions in the East China Sea, Senkaku Islands dispute)
• China – Philippines & Vietnam (territorial disputes in the South China Sea)
• India – China (border dispute)
• India – Pakistan (territorial and ethnic conflict)
• Iraq (civil war)
• Iran – Gulf Cooperation Council States (regional non-state actor proxy conflict)
• Israel (territorial and ethnic conflict)
• Korea (border tensions)
• Libya (civil war)
• Russia – Baltic Nations (Estonia, Latvia, Lithuania)
• Russia - Georgia (territorial and ethnic conflict)
• Russia - Ukraine (Crimea, territorial and ethnic conflict)
• Syria (civil war)
• Turkey (Kurds, Syria)
• Venezuela (civil unrest)
• Yemen (civil war)

Defense Spending. In addition to threats to national security, a nation’s fiscal capacity to fund defense programs is an important determinant of demand for combat vehicles. A nation facing relatively low threats but possessing a high fiscal capacity to fund national defense may spend more on combat vehicles than a nation facing high threats but possessing few resources. Countries facing similar threats might buy very different combat vehicles simply due to differences in fiscal resources. A wealthy country might buy expensive tanks and highly capable tracked infantry fighting vehicles (IFV) to address a particular threat while a less wealthy country might address a similar threat by supplying its land forces with a fleet of wheeled 8x8 combat vehicles equipped with small and medium caliber weapons and anti-tank guided missiles. Around the globe, the demand for combat vehicles often tracks changes in economic conditions. When oil prices decline, nations in the Middle East tend reduce and slow down spending on combat vehicles due to reduced fiscal resources. Similarly, spending on combat vehicles by European nations declined significantly during and after the great recession of 2008-2009.

Fleet Obsolescence. Another important driver of combat vehicle spending is the rate at which combat vehicles become obsolete in the face of new threats or technology. More lethal anti-tank guided missiles (ATGMs), rocket-propelled grenades (RPGs), improvised explosive devices
(IEDs), and cyber warfare have motivated countries to either modernize their combat vehicles or procure new ones. Similarly, new technologies make it possible to design models with new capabilities. For example, some nations are beginning to experiment with having manned vehicles operate in tandem with an unmanned partner. As this technology matures, it will likely result in radically different vehicle designs. Even in the absence of revolutionary changes in technology, nations eventually buy new models for economic reasons. Older vehicles generally tend to cost more to man and operate than new and only provide a fraction of the capabilities of current models. As more nations abandon older models in favor of new, it becomes increasingly difficult and more expensive to acquire repair parts needed sustain aging fleets. This additional sustainment cost gives impetus for nations to replace older combat vehicles with newer models.

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