Military Vehicle Market is expected to reach US$ 65.53 Billion by 2031

Growing Military Expenditure Driving Military Vehicle Market Growth

According to our latest study on "Military Vehicle Market Analysis to 2031 – Geography Analysis – by Type, Application, and Technology," the market was valued at US$ 32.47 billion in 2024 and is projected to reach US$ 65.53 billion by 2031; it is anticipated to record a CAGR of 10.8% from 2024 to 2031. The report includes military vehicle market growth prospects owing to the increasing military expenditure across the globe.

Growing Significant Expansion in Military Sector with Surge in Defense Budget 

The military vehicle market is witnessing significant expansion, driven by mounting geopolitical challenges, military modernization programs, and the rising demand for advanced defense technologies. The growth of the military vehicle market in North America is further attributed to significant defense budgets, technological governance in the military and defense sector, and a focus on modernizing military fleets. Military vehicles are dynamic assets in any nation's defense strategy, particularly in Europe, where the global situation demands robust and reliable military competencies. In April 2024, The US Army introduced its newest combat vehicle, the M10 Booker, during a ceremony at Aberdeen Proving Ground. The M10 Booker represents a new, modernized capability for the Army, allowing light maneuver forces to meet modern warfare scenarios. In December 2024, Rheinmetall AG completed its acquisition of American vehicle manufacturer Loc Performance Products for US$ 950 million, which marks its expansion in the US defense market.

Military Vehicle Market Share — by Region, 2023

Source: The Insight Partners Analysis

There is an increased need to procure modern military vehicles. A few of the contracts signed by the government and manufacturers of military vehicles are mentioned below:

In January 2025, the Ministry of Defence signed a contract with Heavy Vehicles Factory, a unit of Armoured Vehicle Nigam Limited, for the procurement of 47 Tank-72 Bridge Laying Tanks (BLT) for the Indian Army at a total cost of ~US$ 180 million.

In 2024, under the contract agreement "High-Precision Complexes," the Russian Army procured a new batch of BTR-MDM amphibious APCs from Rostec State Corporation.

In 2024, India's state-owned BEML, formerly Bharat Earth Movers Limited, sealed contracts with the Indian Ministry of Defence to deliver 8×8 high-mobility vehicles (HMVs) and 50-tonne heavy-duty trailers to the Indian Army.

In 2024, The US Army Contracting Command – Detroit Arsenal (ACC-DTA) presented Oshkosh Defense with a five-year Fixed Price with Economic Price Adjustment Requirements contract for the Family of Heavy Tactical Vehicles (FHTV) V program. The contract, valued at an estimated US$ 1.54 billion, extends Oshkosh's role in delivering new and recapitalized heavy tactical vehicles and associated trailers through 2031.

In 2024, the Japan Ministry of Defense allocated US$ 164 million to procure 24 infantry combat vehicles (ICVs) and US$ 0.05 billion to procure eight maneuver mortar combat vehicles (MMCVs) for the Japan Ground Self-Defense Force (JGSDF).

Rising Military Expenditure Globally with Surge in Adoption of Advanced Technology-Based Vehicles 

Strengthening military expenditure encourages incorporating advanced warfare technologies, such as high-end military vehicles equipped with advanced communication devices, missile detection systems, and surveillance and navigation systems. In addition, with the growing military budget, defense forces procure unmanned vehicles for better combat and surveillance competencies without risking human lives. In addition, a strong military budget allows countries to allocate resources for enhancing and upgrading their ground-based defense systems by integrating advanced software and technologies for more precise operations. This encompasses enhancing or replacing outdated and mature military vehicles with more advanced and capable ones by incorporating high-end communication, surveillance, and navigation systems. For instance, in January 2025, the Ministry of Defense of Ukraine delivered all-wheel-drive military trucks from a domestic manufacturer. These vehicles will be utilized for combat missions. In March 2024, the Ministry of Defence in India authorized a contract to procure 693 Armament Upgrades of Infantry Combat Vehicle BMP2 to BMP2M. This upgrade incorporates a gunner main sight, night enablement, commander panoramic sight, and a fire control system (FCS) with an automatic target tracker. In August 2024, The US Army awarded General Dynamics Land Systems another low-rate initial production contract for the M10 Booker Combat Vehicle. The US$ 322.7 million contract amends an identical contract conferred in June 2024, with a projected completion date of October 2026.

By geography, the military vehicle market is segmented into North America, Europe, Asia Pacific, the Middle East & Africa, and South America. 

The geographic scope of the military vehicle market report offers a detailed regional and country analysis. North America, Europe, Asia Pacific, South America, and the Middle East and Africa are major regions considered in the global military vehicle market. Military vehicles play a major role in the defense sector for transportation, logistics, surveillance, and communication in North America. The growing need for advanced technologies to cater to modern battlefield requirements boosts the demand for advanced military vehicles in North America. In 2022, North America spent US$ 886.3 billion on defense activities; in 2023, it reached ~US$ 903.7 billion. The US is leading the market for military vehicles in North America, followed by Canada and Mexico. The US is one of the highest military spending countries. The growing defense expenditure indicates the country's focus and emphasis on advancing the defense sector to meet the growing need for security. The defense expenditure covers sections such as operation and maintenance, procurement, research and development, testing and evaluation, and military personnel. The growing number of military vehicle orders is boosting the market's growth in North America. For instance, in February 2025,

Advent of Modern Warfare Technologies

Advanced military vehicles with progressive communication and surveillance systems accelerate the development of a comprehensive and accurate analysis, aiding more precise threat measurements and target engagements. Modern warfare scenarios emphasize heightened situational awareness, rapid data sharing, integrated defense systems, improved target engagement, electronic warfare capabilities, and compliance with evolving threats. Thus, the growing adoption of advanced military vehicles equipped with the latest warfare devices and equipment further drives the growth of military vehicles to meet modern battlefield requirements. For instance, in 2024, BAE Systems Australia unveiled an advanced uncrewed ground vehicle (UGV) that offers military commanders an additional tactical option while keeping soldiers safe. The Autonomous Tactical Light Armour System (ATLAS) Collaborative Combat Variant (CCV) is cost efficient, modular, 8x8 UGV, which has been designed and developed by leveraging BAE Systems' autonomous technology. In 2024, General Dynamics Mission Systems incorporated its electronic warfare kit into the Infantry Squad Vehicle. The electronic warfare kit is part of the Tactical Electronic Warfare System-Infantry Brigade Combat Team (TEWS-I), which was primarily a quick-reaction competence built by General Dynamics, presenting a smaller system proposed for infantry vehicles. It was a prototype activity to assist as a risk reduction and requirement guide for the Army's program of record, the Terrestrial Layer System-Brigade Combat Team (TLS-BCT).

ASHOK LEYLAND; BAE Systems Plc; General Dynamics Corporation; NORINCO Group; Oshkosh Defense, LLC; Patria; Rheinmetall AG; Soframe; Tata Motors; Thales Group; Lockheed Martin Corporation; and KNDS France are among the key companies operating in the military vehicle market. Companies operating in the military vehicle market mainly focus on product and service enhancements by integrating advanced features and technologies into their offerings.

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