Armored Vehicle Market to Reach USD 62.0 Billion by 2035, Growing at 4.8% CAGR | Iveco Defence Vehicles, KamAZ, Leonardo S.p.A.

According to the report, the global armored vehicle market is likely to grow from USD 38.8 Billion in 2025 to USD 62.0 Billion in 2035 at a highest CAGR of 4.8% during the time period. The global armored vehicles market is growing exponentially, due to modernization initiatives, technological innovations, and increased military expenditures in various locations.

Similarly, the modernization program of the Leopard 2 in Germany is aimed at boosting the firepower, situational awareness and survivability of NATO missions. Artificial intelligence and autonomous navigation is applied in technological advances like Rheinmetall, Mission Master unmanned ground vehicles to aid in reconnaissance and logistics due to the increasing demand in an all-purpose and intelligent armored platform. Additionally, the increasing geopolitical tensions, asymmetric warfare and border security issues are also fueling the acquisition of multi-purpose and highly survivable vehicles. Hybrid-electric propulsion and modular designs are also under consideration by manufacturers to enhance fuel efficiency and versatility in various terrain to meet the sustainability and operational efficiency targets.

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Regional Analysis of Global Armored Vehicle Market

North America has the highest demand of armored vehicles because the U.S has many modernization programs and well-structured military facilities. As an example, General Dynamics is modernizing the M1A2 Abrams fleet to have improved armor, AI-controlled targeting, and mobility, to satisfy the changing operational needs and to be mobile to fight in multi-theaters. Effective defense budgets and ever-inventive strategies cement the market control in the region. The constant demand and market leadership is based on the strong strategic investments and technological improvement of North America.

The Asian Pacific region is witnessing a booming growth due to the development by regional insecurities, military fleet modernization, and the pursuit of multi-role armored vehicles by the various countries such as India, South Korea, and Japan to enhance the military strength.

The modernization efforts and modernization of the existing platforms of Europe is led by NATO, including the Leopard 2 designed by Germany and the Leclerc designed by France, which increases the combat readiness and the interoperability of the allied forces.

Prominent players operating in the global armored vehicle market are Ashok Leyland Defence, BAE Systems plc, Denel Vehicle Systems, Elbit Systems Ltd., FNSS Savunma Sistemleri A.Ş., General Dynamics Corporation, Hanwha Defense, Iveco Defence Vehicles, KamAZ, Leonardo S.p.A., Lockheed Martin Corporation, Navistar Defense, Norinco, Paramount Group, Rafael Advanced Defense Systems, Rheinmetall AG, ST Engineering, Tata Advanced Systems Limited (TASL), Thales Group, and Other Key Players.

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Key Driver, Restraint, and Growth Opportunity Shaping the Global Armored Vehicle Market

The growing requirement of quick reaction forces and missions in various environments is creating demand of all-purpose armoured carriers. As an example, JLTV platforms of Oshoosh Defense are both highly mobile and highly protective, being able to deploy quickly in the city, desert, and mountainous environments. It is able to provide mission preparedness and flexibility of operation.

Armored vehicles demand high-tech materials, electronic specialized products, and weapon systems, and have high cost of production and maintenance. Limited purchasing and slow procurement cycles can be hampered by smaller budgets on defense spending on the emerging economies and logistical difficulties keeping the systems available in remote locations.

Increasing insecurity challenges in Asia-Pacific, Middle East, and Africa are availing frontiers to the armored vehicle makers. Firms such as Hanwha Defense and Paramount Group are launching both affordable and customized platforms to these areas to allow superior defense and generate new business streams in the growing economies.

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Recent Development and Strategic Overview:

In September 2025, BAE Systems is collaborating with Forterra to fast-track development of a self-driving version of the U.S. Army's Armored Multi-Purpose Vehicle, BAE's recently launched "capability kit" modernization push. The collaboration will deliver a prototype of an autonomous AMPV by 2026 followed by a demonstration, compressing the traditionally years-long development cycle into something closer to the pace of commercial technology.

In July 2025, Rheinmetall MAN Military Vehicles unveiled new TGS-Mil Protected armored truck, powered by a MAN D2676 six-cylinder diesel engine with up to 382 kW/520 hp and up to 2,650 Nm of torque. With the TGS-Mil Protected, RMMV is capable of offer both protected and unprotected variants within the same modular system, providing flexibility, fleet harmonization and reduced life-cycle costs for new and already existing customers alike.

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Key Trend: Shift Toward Hybrid and Electric Propulsion in Armored Vehicles

The use of hybrid and electric propulsion systems in armored vehicles is increasingly becoming popular as a way of improving fuel efficiency and lessening logistic footprints. Other manufacturers, such as Osho Bush, are also considering the hybrid-electric drive systems on military platforms, which would reduce the consumption of conventional sources of fuel.

This is a change caused by the necessity of sustainable operations and the necessity to decrease the effects of military activities on the environment. The hybrid system has advantages of being quieter in operation and the inability to generate sound when in the electric mode which is handy in reconnaissance operations.

The shift of hybrid and electric propulsion will also be in line with sustainability and it will impact the future designs and operations of armored vehicles.

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