26 June 2014 by defenceWeb
The demand for armoured and counter-IED vehicles in Africa is expected to reach $1.2 billion by 2024 as the market shifts to North Africa, the Middle East and Asia, according to a new report.
The Global Armoured and Counter IED Vehicles Market 2014-2024 report said that budget cuts in Europe and the United States and the withdrawal of the US and its allies from Iraq and Afghanistan have shifted the market to the Middle East and Asia. The report predicted that the global armoured and counter IED vehicles market is expected to experience a compound annual growth rate (CAGR) of 3.33% during 2014-2024.
The Asia Pacific followed by North America are expected to be the largest armoured and counter IED vehicle markets with cumulative market share of more than 55%. Demand for mine-resistant, ambush protected (MRAP) vehicles from the Middle East is expected to be robust due to security concerns in the region. Saudi Arabia and Israel are expected to lead the armoured and counter IED vehicles market in the Middle East.
The establishment of production facilities in the United Arab Emirates, Jordan and Algeria will further boost the armoured vehicles market in the region, especially as these countries export to their neighbours.
In Africa, security threats are increasing the defence budgets of African countries, especially the growing threat of Islamist militants. Despite limited budgets, a number of modernisation programmes and procurement initiatives are valued continent-wide at up to $20 billion over the next decade for armoured and tactical vehicles alone, according to forecasts at the Armoured Vehicles Africa conference in July 2013.
The conference predicted that of the $20 billion to be spent in Africa by 2023, Algeria will account for most spending. The country is buying around 1 200 Fuchs APCs from Germany, which will assemble them in the North African nation. Algeria is also jointly producing the NIMR vehicle in conjunction with the United Arab Emirates and recently ordered more than 300 T-90 tanks from Russia.
Algeria’s neighbour Morocco is also upgrading its armour, having recently received 88 BearCat APCs. Libya, slowly rebuilding its armed forces, recently ordered 350 BRDM wheeled reconnaissance vehicles and BVP-1 infantry fighting vehicles.
Nigeria is a large market for armoured vehicles and is procuring many diverse types, from China and the West and has unveiled its own indigenously produced APC as well.
Some of the big spenders identified by the conference include Nigeria, Kenya and South Africa, although North Africa is the biggest market. An indication of the state of the market came earlier this month when Streit Group signed a deal for 480 armoured vehicles with a North African country.
Due to the Badger infantry fighting vehicle (IFV) programme in South Africa, which will see the delivery of 238 vehicles over ten years, the market for MRAPS is expected to grow at a CAGR of 14.1% over the forecast period there. Projects Sapula and Vistula are also expected to contribute to market growth in South Africa (these projects will replace Pumas and Casspirs and acquire new trucks).
According to South African vehicle manufacturer BAE Systems Land Systems South Africa, the company is seeing new vehicle projects emerging with an uptick in business expected in 2016 in both police and military markets. Demand is expected to come mainly from Africa, the Middle East, South America and Eastern Europe.
“A lot of African and European countries will, within the next few years, need to start replacing old and now obsolete armoured vehicles that are now 30 to 40 years old,” Land Systems South Africa business development and communications director Natasha Pheiffer told Engineering News recently.
South Africa, long regarded as a leader in armoured vehicle development, sold 452 new and refurbished armoured vehicles to 20 different countries in 2013 alone, in deals worth R2.421 billion.
Certain African countries face notable threats, including Mali, the Central African Republic, the Democratic Republic of Congo, Somalia and Sudan. Conflict in these countries has driven the armoured vehicles market and alkso resulted in international peacekeeping forces becoming involved and even supplying vehicles – for instance, the United States has arranged the supply of Puma vehicles to Mali.
Due to the growing demand in Africa, many foreign countries are offering their armoured vehicles to the continent, such as Russia, China, Italy, the UAE, Serbia and the Ukraine.
According to the Global Armoured and Counter IED Vehicles Market 2014-2024 report, infantry fighting vehicles are expected to dominate the wold armoured vehicles market with a share of 28.1% while the market for MRAPs will decline. The demand for Main Battle Tanks is projected to increase, with the market size of MBTs expected to grow at a CAGR of 4.18% during forecast period. Armoured Personnel Carriers are expected to record a marginal increase.
Peacekeeping missions, security threats, the rise in asymmetric warfare, international peacekeeping missions and modernization initiatives are expected to channel more funds towards the armoured vehicles market. However, challenges to the market include global budget cuts, the withdrawal from Iraq and Afghanistan by the United States and its allies and the high cost of high tech armour solutions. In addition, the increase in demand for refurbished vehicles poses a threat to new projects and unmanned systems are increasingly taking the place of manned armoured and counter-IED vehicles.
On the technology front, the report noted that hybrid engines are becoming increasingly popular while vehicle-mounted directed energy weapons, using laser beams, will be the new weapons for armoured vehicles, the report said. Other technological developments include E-Camouflage technology and active protection systems.