Armored Vehicle Upgrade and Retrofit Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Type (Armored Personnel Carrier [APC], Infantry Fighting Vehicle [IFV], Mine-resistant Ambush Protected [MRAP], Main Battle Tank [MBT]), By Design Type (Wheeled Armored Vehicles and Tracked Armored Vehicles) By Region, By Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 6.98 Billion
CAGR (2026-2031)	6.75%
Fastest Growing Segment	Tracked Armored Vehicle
Largest Market	North America
Market Size (2031)	USD 10.33 Billion

Market Overview

The Global Armored Vehicle Upgrade and Retrofit Market will grow from USD 6.98 Billion in 2025 to USD 10.33 Billion by 2031 at a 6.75% CAGR. The Global Armored Vehicle Upgrade and Retrofit Market focuses on the systemic modernization of existing military land platforms to enhance survivability, mobility, and firepower without incurring the high costs of new vehicle procurement. Key drivers supporting this market include the critical need to extend the service life of aging fleets and the fiscal imperative to maximize defense budgets through cost-effective refurbishment programs. Additionally, the increasing prevalence of asymmetric warfare threats compels armed forces to rapidly adapt legacy systems with improved armor and electronic countermeasures.

One significant challenge impeding market expansion is the technical difficulty of integrating modern digital architectures into legacy analog platforms that have limited size, weight, and power capacities. These compatibility issues often result in significant engineering delays and cost overruns during the installation of advanced protection suites. According to the Stockholm International Peace Research Institute, in 2024, global military expenditure increased by 9.4 percent to reach $2.7 trillion, underscoring the intense financial commitment nations are making toward modernizing their defense inventories.

Key Market Drivers

The cost efficiency of fleet modernization versus new procurement is a primary catalyst propelling the Global Armored Vehicle Upgrade and Retrofit Market. Defense ministries are increasingly opting to extend the operational life of legacy platforms through comprehensive retrofit programs, which offer a fiscally prudent alternative to the prohibitive expenses associated with developing and manufacturing next-generation vehicles. This approach allows armed forces to maintain combat readiness and address logistical obsolescence while redirecting capital toward other strategic priorities. Highlighting this trend, according to The Defense Post, August 2024, in the 'US Army Taps General Dynamics for Stryker Vehicle Sustainment' article, General Dynamics Land Systems accepted a $174.4 million contract to repair and retrofit the U.S. Army's Stryker family of vehicles, extending the fleet's service validity through 2029.

The integration of Active Protection Systems (APS) and advanced armor materials constitutes a second critical driver, necessitated by the proliferation of asymmetric warfare threats such as anti-tank guided missiles and loitering munitions. As conventional armor becomes insufficient against modern kinetic threats, military operators are rapidly retrofitting vehicles with hard-kill APS solutions that can detect and neutralize incoming projectiles before impact. This technological pivot is evident in recent procurement activities; for instance, according to Defense Mirror, November 2024, in the 'Elbit Systems to Equip U.S. Army Bradley Vehicles with Iron Fist APS' article, Elbit Systems announced a contract worth approximately $127 million to supply its Iron Fist APS for the upgrade of Bradley Infantry Fighting Vehicles. Underscoring the broader scale of these modernization efforts, according to International Defence Analysis, in 2024, Oshkosh Defense was awarded a $1.54 billion contract to upgrade the U.S. Army's Family of Heavy Tactical Vehicles.

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Key Market Challenges

The technical difficulty of integrating modern digital architectures into legacy analog platforms with limited size, weight, and power (SWaP) capacities constitutes a primary obstruction to the growth of the Global Armored Vehicle Upgrade and Retrofit Market. Legacy armored vehicles were not originally engineered to sustain the high energy burdens and thermal loads imposed by contemporary sub-systems, such as active protection suites, digital battle management, and advanced sensor arrays. To accommodate these technologies, defense contractors must often fundamentally redesign a vehicle’s electrical generation and cooling architectures, a process that is both labor-intensive and technically complex.

These systemic compatibility issues frequently result in extended prototyping phases and significant cost overruns, which directly diminish the cost-effectiveness argument that typically drives the retrofit market. Consequently, modernization programs face engineering delays that postpone revenue recognition and can deter armed forces requiring rapid deployment of upgraded assets. According to the Aerospace, Security and Defence Industries Association of Europe, in 2024, the defense sector's turnover increased by 13.8 percent to reach €183.4 billion. While this data illustrates robust industrial activity, the efficiency of capital deployment within the specific vehicle retrofit segment is noticeably throttled by these persistent integration complexities, preventing the market from realizing its maximum growth potential.

Key Market Trends

The Adoption of Hybrid-Electric Powertrain Retrofits is emerging as a critical trend, driven by the operational necessity for "Silent Watch" capabilities and the increasing electrical power demands of modern sub-systems. Unlike traditional diesel engines, hybrid retrofits allow armored vehicles to operate high-energy assets—such as active protection systems, electronic warfare suites, and communication arrays—without idling the main engine, thereby significantly reducing the vehicle's thermal and acoustic signatures. This electrification also eases the logistical burden of fuel transport in contested environments while providing instant torque for improved mobility. Illustrating this shift, according to Soldier Systems, April 2025, in the 'MATBOCK, LLC of Virginia Beach, VA, Is Awarded $17.3m Phase 4 Contract Modification' article, MATBOCK received a $17.3 million contract modification to develop and deliver hybrid-electric prototypes of the Joint Light Tactical Vehicle for the U.S. Army, utilizing existing platforms to validate fuel savings and off-board power generation capabilities.

Simultaneously, the Upgrading to Digital Vetronics and Glass Cockpits is reshaping the market as armed forces transition from analog gauges to fully integrated digital architectures. This trend focuses on installing open-architecture backbones (MOSA) that fuse data from disparate sensors into a unified "glass cockpit" display, enabling crews to maintain 360-degree situational awareness during closed-hatch operations. This digital foundation is essential for supporting future AI-driven decision aids and ensuring interoperability with network-centric battlefield management systems. Highlighting the scale of these modernization efforts, according to Defence Industry Europe, December 2024, in the 'U.S. Army awards new contract to BAE Systems for Bradley combat vehicles' article, BAE Systems secured a $656.2 million contract to modernize the Bradley fleet with advanced optoelectronic systems and digital command interfaces, transforming legacy hulls into digitally connected combat platforms.

Segmental Insights

The Tracked Armored Vehicle segment is currently positioning itself as the fastest-growing category in the Global Armored Vehicle Upgrade and Retrofit Market due to an increasing focus on heavy mobility and survivability. Defense entities such as the U.S. Army are prioritizing modernization programs for legacy main battle tanks and infantry fighting vehicles to counter evolving ballistic threats without incurring the substantial costs of new procurement. These retrofits primarily address the need for powertrain enhancements and armor reinforcement, ensuring that tracked platforms maintain operational effectiveness in challenging terrains where wheeled alternatives often face limitations.

Regional Insights

North America currently dominates the Global Armored Vehicle Upgrade and Retrofit Market, primarily driven by the United States Department of Defense's sustained commitment to fleet modernization. Rather than focusing solely on new procurements, the U.S. strategy emphasizes extending the operational life of existing platforms through comprehensive retrofits. These programs involve integrating advanced protection, mobility, and communication technologies to ensure combat readiness against evolving threats. Furthermore, the concentration of key defense manufacturers within the region enables the efficient execution of these large-scale upgrade contracts, maintaining North America's status as the primary revenue generator in this sector.

Recent Developments

• In December 2025, Rheinmetall UK was awarded a contract by the NATO Support and Procurement Agency to provide the Trailblazer Driver Vision and Local Situation Awareness System for the UK Ministry of Defence's M270 A2 Multiple Launch Rocket System platform upgrade. The program aimed to equip the armored launchers with modern vehicle vision technology to aid maneuvering in complex environments. The system, already installed on other British combat vehicles like the Challenger 3, was selected to standardise capabilities across the fleet. Prototypes were scheduled for delivery in early 2026, with main production following later that year.
• In August 2024, General Dynamics Land Systems accepted a contract valued at $174.4 million to repair and retrofit the U.S. Army's Stryker family of vehicles. The project, facilitated by the U.S. Department of Defense, was scheduled to continue until February 2029. The Stryker, an eight-wheeled armored fighting vehicle, required these sustainment services to maintain its operational readiness for armored and infantry brigade combat teams. The work involved upgrading the platform's capabilities to ensure it remained effective against evolving threats, supporting the army's ongoing fleet modernization and lifecycle management strategies.
• In May 2024, Elbit Systems announced that it had been awarded a contract worth $37 million to supply Iron Fist Active Protection Systems for the U.S. Army's Bradley M2A4E1 Infantry Fighting Vehicles. The company detailed that the system would be integrated over a 24-month period to enhance the defensive capabilities of the fleet. The upgrade was designed to provide 360-degree protection against a range of anti-armor threats, including rockets, missiles, and drones. This contract was part of the U.S. Army's broader effort to modernize its armored assets and improve survivability in hostile environments.
• In March 2024, BAE Systems signed a contract with the Danish Ministry of Defence Acquisition and Logistics Organisation for the Mid-Life Upgrade of the Danish CV90 fleet. This agreement, which followed a previous framework for repair and maintenance, involved integrating the new D-series turret into the infantry fighting vehicles. The upgrade aimed to improve vehicle balance and lethality by introducing a variety of weaponry options. Additionally, the modernization included equipping the vehicles with rubber tracks to decrease weight and reduce noise and vibration, thereby minimizing crew fatigue and enhancing long-term operational capabilities.

Key Market Players

• General Dynamics Corporation
• RHEINMETALL AG
• BAE Systems PLC
• Textron Inc.
• Elbit Systems Ltd
• Oshkosh Corporation
• KNDS N.V.
• FNSS Savunma Sistemleri A.Ş.
• Thales S.A.
• Ruag International Holding AG

By Type	By Design Type	By Region
Armored Personnel Carrier [APC] Infantry Fighting Vehicle [IFV] Mine-resistant Ambush Protected [MRAP] Main Battle Tank [MBT]	Wheeled Armored Vehicles and Tracked Armored Vehicles	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Armored Vehicle Upgrade and Retrofit Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Armored Vehicle Upgrade and Retrofit Market, By Type:

• Armored Personnel Carrier [APC]
• Infantry Fighting Vehicle [IFV]
• Mine-resistant Ambush Protected [MRAP]
• Main Battle Tank [MBT]

• Armored Vehicle Upgrade and Retrofit Market, By Design Type:

• Wheeled Armored Vehicles and Tracked Armored Vehicles

• Armored Vehicle Upgrade and Retrofit Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE