2. TABLE OF CONTENTS
About the research…………………………………..…..............
Capabilities and requirements…………………………............
The Asia market in perspective………………….…................
Appendix A……………………………….…………….………….
Appendix B………………………………….……….……..……..
About Defence IQ…………………………….….….…………….
Armoured Vehicles India 2012…………………….……..……..
Page 2
3. ABOUT THE RESEARCH
This report will explore how the future of Asia’s armoured vehicle market is likely to
evolve over the next decade. The report is based on a survey of 144 senior executives
and professionals within the armoured vehicle domain, which includes both commercial
and military respondents. The analysis of the survey data has been supplemented with
proprietary interviews and desktop research.
The majority of survey respondents were from the commercial sector, accounting for
69% of total responses. Military personnel form the remaining 31% (Figure 1), which
includes ranking Colonels, Lieutenant Colonels, and Captains. Looking at the chart
below, the United States had the highest representation in the survey (19%) followed by
the UK (13%). A significant number of respondents are based in Asia with India having
31%
the highest proportion (12%) followed by Australia (8%) and Singapore (5%). Other
Asian countries represented include Indonesia, South Korea, Pakistan, the Philippines,
Vietnam and Cambodia.
69%
Figure 1:
Breakdown of respondents by country and type
USA UK India Australia Singapore Other
Commercial Military
Commercial Military
19%
31%
43%
13%
69%
12%
5% 8%
Page 3
4. CAPABILITIES AND REQUIREMENTS
Countering the IED threat is the most important armoured vehicle attribute for Asian
requirements according to survey respondents, with 54% revealing that blast protection
is “critical.”
However, taking the top two responses together from Figure 2 (i.e. respondents
specifying “critical” and “important”), protection from small arms ballistic attack is
generally considered to be the main design requirement for 83% of respondents. Based
on this analysis, IED protection then dramatically falls into third place with 79% behind
reliability in second, which 81% of participants specified as being “critical” or
“important.”
For a direct comparison on what respondents think India specifically will be seeking
most for their armoured vehicles please see Appendix A.
Figure 2:
Analysis of key armoured vehicle attributes in Asia
Unimportant Necessary Important Critical
Ballistic protection 13% 5% 40% 43%
Blast protection / counter-IED 10% 11% 25% 54%
Mission range 7% 36% 41% 15%
Adaptability 12% 27% 36% 25%
Mobility 6% 16% 42% 36%
Transportability 7% 23% 48% 22%
Cost (affordability) 8% 16% 33% 43%
Reliability 8% 11% 39% 42%
RPG protection 11% 14% 38% 37%
Page 4
5. Figure 3:
Global* analysis of key armoured vehicle requirements
Unimportant Necessary Important Critical
Cost (affordability) 9% 17% 42% 33%
Reliability 8%5% 32% 55%
Mobility 4% 19% 59% 18%
Blast protection / counter-IED 7% 12%
4% 78%
Ballistic protection 7% 12% 24% 57%
*Taken from
Armoured Vehicles 2012
In Defence IQ’s Armoured Vehicles 2012 Report released earlier this year, 57% of
respondents identified ballistic protection as a critical attribute (Figure 3), which is
significantly above the 43% looking specifically at the Asia region. There is a similar
contrast with blast protection – 78% in the global report compared with just 54% in this
one – although the IED threat will be explored in greater detail later in this report.
This perception gap suggests Asian customers are less concerned with protection and
instead consider secondary or tertiary factors, such as cost and mobility, to be more
relevant than their counterparts in the West or those currently engaged in combat and
combat support missions.
This is further evidenced when looking at the disparity with reliability, which with 55% of
respondents identifying it as a critical attribute it’s 13% up on the 42% in the global
report. Even more stark is mobility, which twice as many respondents thought to be
critical for Asia (36%) compared to the global market (18%).
Page 5
6. Why does the Asian market put less emphasis on the protection component of
armoured vehicles and give more credence to a wider range of attributes than other
regions do?
One answer could be that it has been some time since an Asian country was deeply
committed to a war on foreign soil. Simply, if you’re not being shot at the need for
ballistic and blast protection understandably diminishes.
Looking at Figure 4, however, the assumption that Asia compromises on protection is
soon put into perspective when respondents were asked to prioritise armoured vehicle
capabilities. (For a direct comparison on what respondents think will be the most
important capability for India specifically please see Appendix B).
Figure 4:
The most important capability for
Asian countries
19%
26%
Mobility
Survivability
Reliability
55%
Figure 4 highlights that survivability (55%) is more than twice as important as reliability
(26%), and nearly three times that of mobility (19%).
While this shows that, in accordance with Figures 2 and 3, protection, reliability and
mobility respectively line up as key attributes, it is only when respondents are asked for
the key attribute that survivability is prioritised.
When considering armoured vehicle capabilities, Asian customers and end users look
at a number of different options. However, when asked what the priority should be,
protection is the obvious stand-out attribute.
Page 6
7. The consensus leads to protection being the dominant design requirement for armoured
vehicles over the next ten years. When thinking about the standard Performance
Triangle for armoured vehicle engineers (seen below left), the focus on protection
needs to be considered in the context of its high priority. It could be redesigned to look
similar to the figure below:
Figure 5:
The Performance Triangle
Standard Updated
PROTECTION PROTECTION
PERFORMANCE
SURVIVABILITY
WEIGHT COST
WEIGHT COST
Page 7
8. Confirming the data analysis in Figure 3, the graph below highlights that the IED is
considered to be the most significant threat that Asian procurers of armoured vehicles
should seek to protect against. A comfortable 18% margin sits between IED/blast (78%)
and the next most potent threat, small arms ballistic attack (50%).
That seems a fairly decisive result. However, compared to the response from the global
report, the emphasis on IEDs is noticeably reduced; 95% of respondents identified IEDs
as the key threat for global requirements, which is 17% more than for Asia alone.
With NATO nations bogged down in Afghanistan where the IED threat has increased in
frequency and lethality, the requirement for innovative counter-IED technologies has
been the primary driver for industry. The need to protect against IEDs is directly
proportional to the frequency with which a nation is likely to face the threat. In Asia, that
prospect is considerably lower than for the United States military for example.
“Protection can be offset by mobility. It is the
mobility with which we can overcome the
protection requirements … we need to have light
armoured vehicles with high power-to-weight
ratios and high mobility, which is the only way I
think we can achieve better protection.”
Brig. Gen. C.P. Mohanty,
North Kivu Brigade Commander,
MONUSCO Mission to the DRC, United
Nations
Page 8
9. Asian countries adhere closer to the judgment of Brig. Gen. Norbert Huber, Head of Fire
Development Division at the Austrian MoD, who said at a recent industry conference
that: “IEDs are important, but they are certainly not the only threat we should consider in
the future … We always try to win the last war without giving much consideration about
how to win the next.”
One survey respondent also said: “The Western emphasis on counter-IED protection
will be largely irrelevant to Asian customers.”
But how true is that?
Lt. Gen. Michael Barbero, the Director of the U.S. DoD’s Joint IED Defeat Organisation
(JIEDDO), recently declared that: “The IED will be the focal point for any future
conflicts.”
Lt. Col. (Rtd.) Jim Storr, an independent defence analyst and specialist in the field of
military strategy, agreed with Barbero:
“Wherever we are going we are not going towards another Cold War … the future
threat landscape will include IEDs.”
We might find that the true answer lies somewhere in between. Jon Hawkes, Senior
Analyst at IHS Jane's DS Forecast, provides a satisfying interpretation:
“As has been clear for a while now many countries which do not require significant IED
and mine protection are nonetheless purchasing equipment which has significant
capability in this area as they are very much ‘in fashion’ and a highly desired symbol of
being a modern military.”
Page 9
10. With just 14% of respondents identifying CBRN (Chemical, Biological, Radiological and
Nuclear) as a threat in Figure 6, it’s clear that few within the industry are concerned
about the potential risk it poses to armoured vehicle personnel.
Is this direction sensible? Or is this an area that needs to be addressed now in
preparation for the future threat landscape?
Figure 6:
Overview of the most significant threats
78%
60%
58%
46%
37%
14%
22%
CBRN
Small arms
HMG
ballistic Blast /
ballistic Directed
attack (up IEDs RPG
attack energy
to 7.62mm) Unfamiliar
(STANAG systems and difficult
Level IV attack terrain /
and
climate
similar)
The IED wasn’t considered to be a significant threat to the survivability of vehicles pre-
Iraq and Afghanistan. It is always difficult to predict and prepare for the “next” threat. In
which case, shouldn’t we (armoured vehicle manufacturers, the military, governments)
at least start think about the possibility of an upturn in offensive CBRN capabilities?
Page 10
11. Lieutenant General Sir John Kiszely, Former Director of the UK Defence Academy and
National President of the Royal British Legion, certainly thinks so, calling chemical
warfare the “hidden threat” of the future. He warned of the dangers of only acquiring
equipment relevant for today’s battlefield:
“Counter-insurgency is the flavour of the moment … (but we) have to focus on what is
the character and future of conflict,” Kiszely said at an industry conference in the UK in
February. “Unpredictability and uncertainty must be two of the major factors,” when
considering current requirements.
Page 11
12. Looking at Figure 7, the majority of respondents (76%) believe armoured personnel
carriers (APC) will be in highest demand in Asia over the next ten years while light
armoured vehicles closely follow (69%).
Figure 7:
Overview of most in-demand armoured vehicle for Asian
requirements
Armoured personnel carrier
Light armoured vehicle
Reconnaissance vehicles
Main battle tanks
Unmanned ground vehicles
0%
20%
40%
60%
80%
The interesting thing to note here again relates back to the global armoured vehicles
study conducted in January where this statistic was in the reverse. There, 69%
identified the light armoured vehicle as the top vehicle with the APC following on 63%.
The role reversal is indicative of the Asia-specific requirements. Less likely to be used in
a combat situation, the real demand from the Asian armoured vehicle customer is for
logistic support.
General Sir Peter Wall, Chief of the General Staff at the UK Ministry of Defence, said as
much in a recent speech:
“The role of the tank has shifted subtly ... (in the future) tanks will be used primarily in
support of troops.”
Page 12
13. While only 27% of respondents thought Unmanned Ground Vehicles (UGVs) would be
in demand over the next ten years, the fact that it’s only just behind the main battle tank
(29%) demonstrates a substantial leap forward in technological advance and mission
relevance in itself. Ten years ago the main battle tank was still considered to be a highly
valued and useful military asset; in contrast, unmanned vehicles were still the
pipedreams of scientists. There is no doubt that UGVs will continue to develop at a
rapid rate and in another ten years time the demand for them will soar.
“The IED will be the focal point for any future conflict.”
Lt. Gen. Michael Barbero, Director, Joint IED Defeat
Organisation, Office of the Secretary, U.S. DoD
Page 13
14. THE ASIA MARKET IN PERSPECTIVE
India is the heartbeat of the APAC region as it continues to invest in its defence
industrial base and build a world-class military force. Looking at Figure 8, 70% of
respondents agree that India is the number one target market for growth over the next
decade, almost double that of its closest rival China on 41%.
Figure 8:
Analysis of Asian countries presenting greatest
potential for growth over next 10 years
0% 10% 20% 30% 40% 50% 60% 70% 80%
India
China
South Korea
Australia
Indonesia
Pakistan
Singapore
Vietnam
Malaysia
Philippines
North Korea
Japan
Sri Lanka
New Zealand
Bangladesh
Page 14
15. In a recent address to delegates at an industry conference, Lt. Gen. (Rtd.) Dalip
Bhardwaj, the former Director General of Mechanised Forces in the Indian Army, said:
“In India, the aerospace and defence market is growing at an unprecedented rate and is
emerging as a key participant in the Asia-Pacific region.”
But India isn’t just the principal growth market in Asia; it is globally too. In January, 57%
of respondents identified India as the top potential market in the world for growth in
Defence IQ’s Armoured Vehicles 2012 report.
In his 2012 New Year message, Indian Prime Minister Dr. Manmohan Singh, said: “Our
Army, our Navy and our Air Force require modernisation and upgradation of personnel
and systems. Ensuring this will remain my most important task as Prime Minister.”
It’s little wonder India is viewed as such a captive market: Earlier this year Stockholm
International Peace Research Institute (SIPRI) announced that India was the world's
largest arms importer, receiving 9% of the volume of international arms transfers during
2006–2010. At the time Siemon Wezeman of the SIPRI Arms Transfers Programme
said:
“Indian imports of major conventional weapons are driven by a range of factors. The
most often cited relate to rivalries with Pakistan and China as well as internal security
challenges. As an importer, India is demanding offsets and transfers of technology to
boost its own arms industry, and, in order to secure orders, major suppliers are
agreeing to such demands.”
“Against the complex nature of future threats and
challenges, in the elongated spectrum of conflict, the
Indian Armed Forces are committed to delivering security.
Strategic transformation based on a judicious mix of a
capability and threat-based approach against the
backdrop of anticipated technology and fiscal
development is exciting. The moment has arrived when
India is on the threshold of economic and technological
surge.”
Lieutenant General J.P. Singh (Rtd.),
Former Deputy Chief of Staff,
Indian Army
Page 15
16. “The global defence industry is now truly at an
inflection point. It is moving East, towards China, the
Middle East, and to India. In India, the aerospace
and defence market is growing at an unprecedented
rate and is emerging as a key participant in the
Asia-Pacific region. India’s defence forces are on a
modernisation overdrive and are hence one of the
largest military spenders in the world.”
Lt. Gen. (Rtd.) Dalip Bhardwaj, PVSM,VSM,
Former Director General of Mechanised Forces,
Indian Army
Page 16
17. Singapore comes in a lowly seventh place which is perhaps surprising. The country has
a booming defence industry and a number of Singapore-based companies, such as
Singapore Technologies Engineering and its land vehicle arm ST Kinetics, are players
on the world stage. For example, in 2008 the firm beat off competition from UK MoD
darling BAE Systems to win the £150 million contract to supply an all-terrain vehicle.
The company’s Bronco armoured vehicle was renamed the Warthog by the British, who
ordered over 100 under an Urgent Operational Requirement (UOR).
At the time, Simon Cox, the Programme Manager at the UK MoD, explained how the
Singapore firm had exceeded expectations.
“We appreciate the close, flexible and constructive working relationship with ST
Kinetics. They are a great company to work with and the Bronco has exceeded our
expectations in terms of quality, capability and performance. We are delighted with their
product, attitude and the progress jointly made in a very short time indeed.”
“Indian imports of major conventional weapons
are driven by a range of factors. The most
often cited relate to rivalries with Pakistan and
China as well as internal security challenges.
As an importer, India is demanding offsets and
transfers of technology to boost its own arms
industry, and, in order to secure orders, major
suppliers are agreeing to such demands.”
Siemon Wezeman, Senior Fellow,
SIPRI Arms Transfers Programme
Page 17
18. Where will Asian customers procure their armoured vehicles from over the next ten
years?
According to the survey data (Figure 9), those that do not manufacture the vehicles
indigenously will predominantly acquire them from North America and Western Europe
with nearly half of all respondents indicating these two regions would be targeted by
Asia.
41% of respondents think Asian countries will procure their armoured vehicles from their
own country over the next ten years. Is this truly the case? Or would a 20 year
timeframe be more realistic?
For example, India is known to be building up its infrastructure and has designs on
becoming a self-sufficient military power in the near future. However, analysts predict
that infighting, bureaucracy and corruption are currently blighting India’s efforts to
become a self-sufficient defence behemoth and this is unlikely to change for at least the
next five years.
Projects such as the $20 billion MMRCA (medium multi-role combat aircraft), for which
Dassault’s Rafale has been preliminarily chosen, will spur foreign companies to sell to
India, but what about investing in India?
The Indian government restricts foreign investors from owning more than 26% of any
company based in the country. It’s a much maligned law and one that many feel is in
desperate need of a rethink if India is to rapidly develop its own defence industry and
security infrastructure. There is an increasingly vocal lobby calling for private sector
reform in India and the belief is if these problems can be resolved then India could
become the haven for investors it has long promised. At the moment, it is merely
promising to be one.
Page 18
19. Figure 9:
Analysis of which regions Asian countries will procure from
over the next decade
Own country (indigenous)
50%
South America 40% East Europe
30%
20%
Australasia 10% North America
0%
Middle East Africa
Other Asia West Europe
Africa only resonated with 16% of respondents but the defence industry is developing
apace in the region. In a recent interview with Defence IQ Ivor Ichikowitz, the founder of
South Africa’s Paramount Group, explained how his company is innovating within the
defence and aerospace industry and what it will take for Africa to be taken seriously as
a military power.
“My personal goal is to be able to grow a world-class, global defence and aerospace
business out of Africa,” said Ichikowitz. “I’m a great believer in the fact that no country or
continent can emerge from a developing economy to a developed economy without a
strong aerospace and defence industry. My goal is to prove that that’s possible.”
One considerable step in achieving that goal will be taken towards the end of this year
when Paramount unveils its AHRLAC (Advanced High-performance Reconnaissance
Light Aircraft), a versatile unmanned aerial vehicle and the first aircraft to have been
entirely conceived and built in Africa.
Page 19
20. Aside form North America and Europe, the Middle East was the other notable region,
seen by 28% of respondents to be a viable armoured vehicle market. A number of firms
are gaining significant traction in the global marketplace, including the Streit Group, who
have recently opened a base in Pakistan to supply the Asian market after already
having an manufacturing site in Mumbai, India.
“The UAE is a very well located country geographically … you have access to Asia,
Africa, Europe and the other Middle East countries … you’re connected to all the world,”
Guerman Goutorov, the Chairman of Streit Group, told Defence IQ in an exclusive
interview.
In April the firm opened the largest armoured vehicle manufacturing site in the world in
Ras Al Khaimah, UAE. At 1.4 million square feet and a cost of $21.8 million, the
company looks well placed to supply demand in Asia.
Page 20
21. When considering the supply and demand for armoured vehicles over the next decade
the global economic crisis must also be factored in.
While the West continues to cite it as a ‘global’ crisis, many in the East think of it as the
‘North Atlantic economic crisis’ as economies in the APAC region expand. Will the
economic woe in the West affect procurement in the East?
With defence budgets declining in North America and Europe, the Asian market is seen
as the key region for armoured vehicle manufacturers and suppliers to expand into.
BAE already has a Joint Venture with India-based Mahindra – called Defence Land
Systems India – and now other primes and second tier vendors are swiftly following
suit.
What are the challenges for vendors looking to gain traction in Asia?
The three key issues are understanding and awareness of the tenders available;
overcoming bureaucratic issues and maintaining full transparency throughout the
process; and, as is often the case, communication problems.
To overcome these challenges perhaps the traditional approach will have to change.
Rather than remaining armoured vehicle integrators and continuing to control the
process from a base in the region, one respondent suggested that companies should
become ‘Design Houses’ by supplying the Asian market with advice and transferring
their IP to partners in the region.
Page 21
22. APPENDIX A
QUESTION
Thinking specifically about India, in terms of the country's key armoured vehicle requirements
over the next 10 years please rate the following attributes on a scale from 1 - 4 (1 =
unimportant, 4 = critical).
Unimportant Necessary Important Critical
0% 20% 40% 60% 80% 100%
Ballistic protection 8% 10% 36% 46%
Blast protection / counter-IED 10% 10% 25% 55%
Mission range 11% 23% 48% 19%
Adaptability 15% 26% 37% 22%
Mobility 10% 8% 48% 34%
Transportability 11% 29% 44% 16%
Cost (affordability) 9% 18% 33% 40%
Reliability 10% 12% 35% 43%
RPG protection 13% 18% 37% 32%
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23. APPENDIX B
QUESTION
Thinking specifically about India, which of the following is the most important armoured vehicle
capability over the next ten years?
16%
32%
Mobility
Survivability
Reliability
52%
Page 22
24. ABOUT DEFENCE IQ
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26. DISCLAIMER
This report is provided for information purposes only. This report may not be reproduced,
published or distributed by an recipient for any purpose. The company accepts no responsibility
whatsoever for any direct or indirect losses arising from the use of this report or its contents.
Images courtesy of U.S. DoD and Indian Army.
About the author
Andrew Elwell is the Editor-in-Chief of Defence IQ. He has previously worked
as a survivability specialist for a provider of ballistic and blast armour
systems. Andrew holds a BA in History and American Studies from the
University of Nottingham. He can be reached on andrew.elwell@iqpc.co.uk.
Connect with Andrew on LinkedIn
Follow him on Twitter: DefenceIQ and @AJElwell
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