There has been a need for rapid up-gradation of combat vehicles with advanced electronic information and command systems over the past decade. To provide military forces with improved crew survival, simple navigation, enhanced surveillance efficiency, better inter-vehicle, and intra-vehicle communications, and stronger firepower, global military forces are increasingly modernizing their fleet of vehicles.
Vetronics refers to vehicle electronics that enable military units to integrate various systems such as surveillance, communication, command, and control, electronic warfare, navigation system, vehicle protection systems, power, motorization, and weapons systems, as well as the networking of those systems.
Upgrades to military systems, networking technologies, hazard detection systems, fire suppression systems, communication systems, command, and control (C2) systems, and other systems needed for a mission are included in the modernization programs. Upgrading the military vehicle vetronics systems improves the interoperability of the systems, eliminates the danger and expense of multi-system integration and by reducing their response time, enhances the performance of vehicle operators. Armed forces around the world are modernizing their land vehicle vetronics systems to gain greater capabilities, and reliability on their vehicle platforms.
Vetronics supports the military ground forces by enhancing the intelligence, surveillance, and reconnaissance (ISR) capabilities, which thereby offers increased situational awareness and survivability. Sensors gather mission-critical information to leverage mission effectiveness, warfighter, safety, and ISR, as well as supports in a network-centric battlefield.
Global Military Land Vehicle Electronics (Vetronics) Market accounted for USD 3.64 Billion in the year 2020 and it is anticipated to reach a value of around USD 6.01 Billion by the year 2028. The market growth dynamics account for a CAGR of 5.73% during the forecast period, 2020-2028.
Factors such as strict regulations and consequent delays in procurement processes, however, hinder the growth of the market to some extent. Increasing terrorist attacks and a focus on counter operations, and the launch of vehicle modernization programs by many nations around the world, have created promising opportunities for the military land vehicle electronics (Vetronics) market to grow.
The six major countries that significantly invests in military spending include the US, China, India, Russia, UK and Saudi Arabia. The U.S. spent $649 billion on its military to 2019, according to SIPRI. That’s significantly more than China, second on the list of top military spenders at $261 billion. India, third on the list, spent a relatively modest $71 billion.
Global Military Vetronics Market, by Region are North America; Europe; Asia Pacific; Middle East & Africa; and South America. In terms of region, North America is expected to hold the largest share in the vetronics market during the forecast period. The North America military spending as a percentage of GDP in peacetime fluctuates around half in times of war however, military spending rises dramatically. The higher spending is to support increases in military personnel and the modernization of conventional and nuclear weapons.
North America is expected to dominate the global market with a market value of USD 1.92 Billion owing to the increasing R&D investment in this sector coupled with an infrastructure that supports the same. The early adoption of Vetronics technology in North America is another factor that fuels its market growth. Europe is expected to be the second-largest market with a value of USD 1.50 Billion. APAC is expected to grow with the highest CAGR of 6.17%.
Currently, the US Army has initial strategic initiatives to modernize Bradley Fighting Vehicles, convert M1A1 and M1A2 SEPV1 Abram tanks to the M1A2 SEP V2 configuration, and update MRAP vehicle C4ISR equipment and systems. In addition to these modernization projects, the US Army is increasing the minimal production of a new networked vehicle fleet. As the Army prepares to produce the first MRAPs armed with components of Capability Set 13 (CS-13), significant development and implementation activities also are underway. These kinds of modernization programs will offer a significant opportunity for the global vetronics market.
Russia is among the top nations in the production of MBTs. Russia’s MoD announced the modernization of its fleet with the acquisition of the first batch of T-14 Armata along with T-15 and T-16 at the end of 2018. A small number of T-14 Armatas are currently in service in the Russian Army but the weapon is due to be deployed in greater numbers in the coming years. The T-14 Armata is designed to find a perfect balance between firepower, agility, and safety compared to all previous Russian-made MBTs. In addition to the launch of the T-14 Armata, the Russian Army is introducing numerous programs to update the older T-72B, T-80B / U, and T-90 MBTs.
China is one of the nations that has made the most advancements in its military modernization program in terms of the design and production of MBTs in recent years. The inspiration for Chinese technologies and innovations comes primarily from Russian vehicles, but also Western countries. China publicly announced in 2018 that a new Type 15 light/medium tank was ordered by the PLA. The vehicle was intended for operations of reconnaissance and infantry aid that can function in mountainous regions, forests, and river areas that are not accessible to heavier MBTs.
Military units across the globe have focused on investing in solutions and systems to ensure significant improvement in military operations, and have an edge in the battlefield. Furthermore, increasing need for efficient combat management systems in the defense sector has encouraged prominent players offering military communication, command, and control systems to develop and offer advanced battlefield management systems for military applications.
The growing inclination of various defense forces towards the integration of technologically advanced electronic systems in the military vehicles in order to increase the vehicle’s operational efficiency is driving the vetronics market for military globally. The trend towards military expenditure has led to the demand for new military vehicles or modernizing existing vehicles. The military often looks for established solutions with high Technology Readiness Levels (TRLs) with a fast turnaround, low risk, and cost-effectiveness. This increased the need to quickly implement military vehicles with significantly optimized command systems and electronic information. Currently, such systems are being configured into networks, sharing data in the same platform, with combatants on the ground and between neighbouring platforms.
Based on the application, the military vetronics market is segmented into Unmanned Ground Vehicles; Light Protected Vehicles; Special Purpose Vehicles; Armored Amphibious Vehicles and Others. Major driving factors of the military vetronics market are increasing in tanks for the Vetronics is getting more crucial in allowing military vehicles to perform intelligence, surveillance, and reconnaissance tasks. The demand for unmanned ground vehicles is constantly growing in the military due to wide applications of these vehicles in defense including ISR, combat support, EOD, and transportation.
Meanwhile, the demand for unmanned aerial vehicles or drones is also increasing owing to its use in security, mapping, and surveillance. With the growing demand for unmanned vehicles and drones, Artificial Intelligence (AI) is becoming an important part of modern warfare. AI is being equipped in military systems to efficiently handle large volumes of data. It is also being added to improve self-regulation and self-control of combat systems. The demand for unmanned aerial vehicles is also growing with semi and fully autonomous unmanned aerial vehicles including motion detecting sensors essential for flight control system along with a wide variety autonomous platforms being developed.Manufacturers in the military vetronics market are also focusing on new solutions for faster and smaller drones.
The need for soldier modernization programs undertaken by military forces worldwide. Countries such as the USA, France, India and Australia made major progress in military modernization in recent years and these long-term programs will ensure the continued demand for military vetronics during the forecast period. Changing economy and decreasing defense budget will act as restraint to the vetronics market.
The major customer segment of Ventronics after Defense is Homeland security. Lack of security measures at the border areas make it immensely easy for illegal border crossers, smugglers, and terrorists to breach the border. This hampers the security of a nation, and harms its natural resources. To keep a security check at the border areas, various countries are expected to heavily invest on procuring efficient vetronics systems such as military communication systems, navigation systems, and electronic warfare systems. This is anticipated to drive the overall vetronics market during the forecast period.
The digital battlefield has become a force multiplier in the 21st century that has reshaped how military forces around the globe prepare for and overcome regional and international competitors’ issues. Land vehicles, having become beneficial, interlinked nodes in the field with all-new tactical and logistical abilities, have not escaped the significant impacts of digitalization. The number of advanced electronic systems at ground level has increased over the last two decades as defense departments aim to build their armed forces lighter, faster, and ready to deploy.
Vetronics architecture is evolving to encourage network-enabled operations. Technically, vetronics supports to enhance platform electronics and computing resources, enabling the integration into the military vehicles, and accelerating the support and logistics in operating conditions. Additionally, certain initiatives are driving the adoption of electronics technology for military ground combat vehicles, such as the increased bandwidth, SWaP reduction, and the movement to an open architecture.
In addition, advancement in wireless communication technology has opened new opportunities for the market players. These factors are expected to drive the military communication, command, and control segment, registering the fastest CAGR during the forecast period. In addition, the vehicle electronic warfare system segment is projected to grow at the second-highest CAGR during the forecast period, owing to the growing need for monitoring cross-border activities, identifying enemy’s weaknesses, and facilitating enhanced connectivity between central and remote vetronics systems
With evolving military operations and growing demand for advanced vetronics systems, manufacturers are focusing on the modernization and upgradation of military vehicles. The growing inclination of various defense forces towards the integration of technologically advanced electronic systems in the military vehicles in order to increase the vehicle’s operational efficiency is driving the vetronics market for military globally.
High bandwidth network hardware, HD video streaming, threat detection systems are some of the requirement of armed forces to integrate into their vehicles. This is also resulting in the growing need for advanced vetronics systems to handle various software and hardware upgrades in the military vehicles.
New developments are often related to the digital world, where numerous trends are under development at present. One of them is an on-board, completely digitalized cockpit with multiple wide screens displays to enable a 360-degree knowledge of the situation. The US and Germany are undertaking research projects on such a solution, while Israel is introducing Artificial Intelligence (AI) reasoning to the digitalized cockpit to reduce the crew workload as part of the CARMEL initiative.
Improving on-board electronics also means better diagnostic systems, thereby increasing speed and accuracy of maintenance. New MBTs will rely more and more on vehicle electronics or vetronics. All MBTs will be equipped with Battle Management System (BMS), some already have this system, some would get them after upgrade programs. Also, vetronics is expected to be increasingly sophisticated. New generations of laser/radar systems would allow discovery and identification of enemies at 18/20 km range gaining time in operational theatres to face the threat properly.
The rising demand for new sighting devices as well as infrared cameras and thermal imaging systems is therefore contributing significantly to the growth of the global defense vetronics systems market. The shift of the defense industry towards the embedded technology and development of reduced size, weight, and power consumption (SWaP) rugged systems for extreme military applications is expected to further drive the growth of military vetronics market over the forecast period.
The shift of the defense industry towards the embedded technology and development of reduced size, weight, and power consumption (SWaP) rugged systems for extreme military applications is expected to further drive the growth of military vetronics market over the forecast period. Advanced battery technologies are also influencing the growth in the military vetronics market as it enables the development of central vetronics system that can be connected to various equipment and electronic sensors in the military vehicle. Meanwhile, defense and aerospace technology companies are also collaborating with various military organizations to offer robust, cost-effective, electro-optics and electronics innovations for ground combat vehicles.
Technological trends may be converging to produce a potentially transformative battlefield capability: “stealth tanks. Stealth, is a collection of technologies designed to reduce an object’s observable signature, thereby making detection more difficult. Even if temporary or incomplete, stealth provides a significant tactical advantage.
Manufacturers in the military vetronics market are focusing on developing new systems while reducing the operating and design cost and enhancing the performance. Moreover, limited defense budget inadequate to meet the modernization in military and defense systems in various countries is also resulting in low spending on the advanced products in military vetronics. Hence, manufacturers are focusing on miniaturization of devices and producing lightweight vetronics, thereby reducing the cost of the final product.
Integrating systems that offer real-time information and data is one of the focus areas of the manufacturers. Experts in the military vetronics market expect significant growth in the coming years with the development and adoption of advanced combat vehicle products that can be integrated into systems with minimum investment and time. The vetronics integrators and ground military vehicle manufacturers are focusing on Commercial Off-the-Shelf (COTS) smart displays for vehicle retrofits. As the military modernization programs are ramping up, the demand for vetronics systems is expected to emerge continuously in the future.
Key Players Operating in Military Vetronics Market are Raytheon Company; Lockheed Martin Corporation; SAAB Group; General Dynamics Corporation; Curtiss Wright Corporation; Elbit Systems; Leonardo-Finmeccanica SPA; Harris Corporation; Rheinmetall AG; BAE Systems; General Electric Company; Kongsberg Gruppen ASA; TE Connectivity; Oshkosh Corporation.
Raytheon Company has won $88 million contract for the upgrade and modification of sensor system software and hardware for EA-18G and F/A-18 aircraft to incorporate improvements and updates. The services to be provided include design, evaluation, development, documentation, hardware and software support and test of systems and equipment.
LMT Missiles and Fire Control unit of Lockheed Martin Corp has secured $945.9 million hybrid contract to provide technical support services related to the THAAD missile system in the Kingdom of Saudi Arabia. Oshkosh Defense has won $232.7 million contract from the US Army Tank Automotive and Armaments Command to recapitalize vehicles in its family of heavy tactical vehicles fleet. As per the contract, the company will recapitalize around 407 palletized load system trucks and heavy expanded mobility tactical trucks and also manufacture nearly 601 new palletized load system trailers. BAE Systems has won two contracts of up to $575 million by the US Army for the low rate initial production of armored multi-purpose vehicles and vetronics.
The major players include BAE Systems plc, Cubic Corp., Curtiss-Wright Corp., ECRIN Systems, Elbit Systems Ltd., GACI Rugged Systems, General Dynamics Corp., Kratos Defense & Security Solutions, Inc., L3 Technologies, Inc., Leonardo S.p.A., Lockheed Martin Corp., Northrop Grumman Corp., Pleora Technologies Inc., Rafael Advanced Defese Systems Ltd., Raytheon Technologies Corp., Rheinmetall AG, Saab AB, Serco, Inc., and Thales Group.
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