Besides heightening tension in geopolitical level and high obsolescence rates of existing war vehicles, new threats in battle fields and increasing defense budget are other two prominent factors to drive its market.

Heightening Tension in Geopolitical level: It is one of the main reasons that is inflating the demand for combat vehicles. The ongoing tension in the Korean Peninsula is leading South Korea and Japan to strengthen their military power with combat vehicles especially, Main Battle Tanks (MBTs) and Armourned Personnel Carriers (APCs).

Similarly, straining relation between India and Pakistan is one of the reasons for India to procure over 650 Russian T-90 tanks from Russia. It (India) is also likely to build around 1000 units of the same model domestically in technological assistance with Russia. Pakistan, on the other hand, is also increasing its MBT force with new procurement.

War Vehicles Reaching at Obsolete Phase of Service: The existing war vehicles at present are quite old. To ensure their (MBTs, APCs, etc.) operational efficiency, upgradation is must. Countries from Asia Pacific region such as India, Bangladesh, Vietnam, etc. are in the course of upgradation of warfare vehicles.

For instance, India is planning to upgrade T-72 MBT force. Similarly, Malaysia and Singapore are focusing on gradual upgradation of existing fleets.

New Threats in Battle Fields Unfolding New Opportunities for Tank Industry: The traditional threats experienced in COIN (counter-insurgency) missions like Improvised Explosive Devices (IEDs), Rocket Propelled Grenades (RPGs) and Anti-Tank Guided Missiles(ATGMs) raise the need of close collaboration between armed forces and the tank industry. For example, the US made M1A2 SEP v.3 Abrams and Russian made Terminator tanks have improved lethality and survivability in comparison to other older tanks.

Increasing Defense Budget: In Asia, the heightening regional tensions in Korean Peninsula, straining Indo-Pak relation, unrest in Middle East, etc. are compelling countries to increase their defense budget every year. As a result, the market of MBTs, APCs and Protected Patrol Vehicles (PPVs) are prospering in this part of the world. In the list of world’s top 10 countries with largest defense budget, five are Asians—China, Saudi Arabia, India, Japan and South Korea. Collectively, they had allocated a total of over US $418 billion budgets for defense last year.

The revival of global combat vehicles market will open up big market opportunities for combat vehicle manufacturers till the end of 2026. And countries from Asia Pacific and Middle East are expected to purchase large numbers of MBTs, APCs and PPVs in next nine years.


Subarna Poudel is a researcher with Frost & Sullivan. He can be reached at subarna.poudel@frost.com


Sapan Agarwal drives content and marketing for Frost & Sullivan. Sapan is based out of Kuala Lumpur Malaysia and can be reached at sapan.agarwal@frost.com | +603 6204 5830