Europe Armored Fighting Vehicle Market By Type (Armored Personnel Carriers (APCs), Combat Support Vehicles, Infantry Fighting Vehicles (IFVs), Main Battle Tanks (MBTs), Reconnaissance Vehicles, Self-Propelled Artillery), By Vehicle (Tracked, Wheeled), By Application (Defense, Homeland Security), By Country, Competition, Opportunities & Forecast, 2020-2030F

Market Overview

Europe Armored Fighting Vehicle Market was valued at USD 9.1 Billion in 2024 and is expected to reach USD 12.8 Billion by 2030 with a CAGR of 6.02% during the forecast period. The Europe Armored Fighting Vehicle (AFV) market is experiencing robust growth as nations in the region continue to modernize their armed forces. As geopolitical tensions rise, there is a growing need to strengthen defense capabilities with state-of-the-art armored vehicles. Countries are focusing on upgrading their fleets to enhance operational readiness and adapt to evolving security threats. These efforts are supported by increased defense spending, which ensures that European military forces are well-equipped to face contemporary challenges. For instance, World military expenditure soared to USD 2718 billion in 2024, marking a 9.4% increase from 2023 the sharpest year-on-year rise since the end of the Cold War. This marks the 10th consecutive annual increase, with military spending now accounting for 2.5% of global GDP.

Market Drivers

Increasing Defense Budgets

As security concerns rise, many European nations are significantly increasing their defense budgets to ensure that their armed forces remain prepared and capable. The heightened need to address both external and internal threats has led to increased investment in modern defense systems, including armored fighting vehicles. The robust funding is enabling military forces to procure state-of-the-art AFVs that improve operational capabilities and safeguard national interests in a rapidly changing security landscape. For instance, European military expenditure (including Russia) rose by 17%, reaching USD 693 billion in 2024. Germany's defense budget grew by 28% to USD 88.5 billion, becoming the largest spender in Western Europe. Russia increased spending by 38% to USD 149 billion, while Ukraine spent USD 64.7 billion, equaling 34% of its GDP the highest military burden globally.

Technological Advancements

Technological innovation is a major driver in the growth of the European AFV market. The continuous development of advanced systems such as active protection systems, autonomous navigation, and advanced communication networks is transforming armored vehicles. These technological upgrades not only enhance the efficiency and safety of AFVs but also increase their effectiveness in complex combat scenarios. The integration of cutting-edge technologies is a key factor in attracting investment from both defense contractors and governments across Europe.

Geopolitical Tensions

Europe’s geopolitical landscape is becoming increasingly complex, with rising tensions in certain regions and the need to address military threats from neighboring countries. These concerns have led to an urgent need for modern and versatile armored vehicles to ensure national security. Military forces across Europe are focusing on upgrading and expanding their AFV fleets to enhance their operational readiness and combat capabilities in light of rising security threats. For instance, all 32 NATO members increased military budgets in 2024, with combined spending reaching USD 1506 billion 55% of global defense expenditure. A record 18 NATO countries met or exceeded 2% of GDP in defense spending, up from 11 in 2023. The United States alone spent USD 997 billion, accounting for 66% of NATO’s total and 37% of global military expenditure.

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Key Market Challenges

High Cost of Advanced Technologies

While technological advancements are driving the growth of the AFV market, the high cost of developing and deploying these advanced systems remains a significant challenge. The integration of new technologies, such as AI, advanced armor, and autonomous capabilities, can add significant expense to the production of armored vehicles. For some countries with limited defense budgets, the cost of procuring next-generation AFVs may be a barrier to upgrading their fleets, hindering the adoption of new technologies in a timely manner.

Maintenance and Lifecycle Costs

Maintaining the operational readiness of armored fighting vehicles is a costly and resource-intensive process. The lifecycle costs of AFVs, including repairs, upgrades, and regular maintenance, can be substantial. These ongoing costs place a financial burden on defense budgets, especially when vehicles have long service lives and require continuous modernization. Ensuring that AFVs remain operational and effective over time can be a challenge for many European countries, particularly those with constrained resources.

Key Market Trends

Shift Towards Autonomous Vehicles

Autonomous vehicles are becoming increasingly prevalent in the European AFV market. The growing interest in autonomous and unmanned armored vehicles is driven by the desire to reduce human exposure to danger in hostile environments. The integration of artificial intelligence, machine learning, and advanced sensors into armored vehicles allows for greater operational autonomy. This trend is expected to transform the way military forces engage in combat, offering enhanced efficiency and safety for personnel on the ground.

Increasing Focus on Cybersecurity

With the rise of digital technologies in armored vehicles, cybersecurity has become a critical concern for military forces across Europe. Modern AFVs rely on secure communication networks, navigation systems, and electronic warfare capabilities, making them vulnerable to cyberattacks. Ensuring the cybersecurity of these systems is paramount to safeguarding military operations and ensuring the integrity of vehicle systems during combat. The increasing focus on cyber threats is driving the development of robust cybersecurity measures for AFVs in the European market.

Demand for Multirole Vehicles

European defense forces are increasingly seeking multirole armored vehicles capable of performing a wide variety of tasks. The demand for versatile platforms, such as Infantry Fighting Vehicles (IFVs) and Combat Support Vehicles (CSVs), is growing as these vehicles can be adapted for various mission types, from peacekeeping to offensive operations. The ability to deploy a single vehicle for different roles offers increased flexibility and cost efficiency, which is why multirole vehicles are gaining traction in the European AFV market.

Segmental Insights

Type Insights

The Europe Armored Fighting Vehicle market includes several key categories tailored to specific combat roles. Armored Personnel Carriers (APCs) transport troops safely with mobility and protection, making them ideal for varied missions. Combat Support Vehicles (CSVs) assist with reconnaissance, fire support, and battlefield management, enhancing operational coordination. Infantry Fighting Vehicles (IFVs) offer a balance of heavy armament, protection, and troop transport, vital for mechanized combat. Main Battle Tanks (MBTs) are heavily armored and armed for direct engagements, forming the backbone of offensive operations. Reconnaissance Vehicles provide fast, agile intelligence gathering with advanced surveillance tools. Self-Propelled Artillery delivers mobile, long-range firepower. Each vehicle type plays a critical role in strengthening combat capabilities across different missions.

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Country Insights

Germany plays a key role in Europe’s armored fighting vehicle development, supported by a strong industrial base and advanced defense technology. The country is modernizing its land forces through new vehicle acquisitions and upgrades of existing platforms, spanning tanks, IFVs, artillery, and support units. These efforts aim to boost mobility, firepower, and survivability in response to evolving security threats and NATO commitments. For instance, as per SIPRI’s latest report, Germany’s military spending soared to USD 88.5 billion in 2024, making it the world’s fourth-largest defense spender and the highest in Central and Western Europe since reunification. This 28% annual increase, fueled by Berlin’s USD 115 billion special fund.

Recent Developments

• In 2025, the UK Ministry of Defence confirmed the delivery of 91 Ajax tracked reconnaissance vehicles to replace the aging CVR(T) series. Built on the ASCOD 2 platform, Ajax offers improved mobility, firepower, and integration, with six mission-specific variants. Despite early technical issues, the program is a key part of British Army modernization, with nearly 500 more units expected.
• Germany awarded a contract in February 2025 for 256 Piranha V armored vehicles under its TaWAN project to boost mobile military communications. These 30-ton, 8x8 vehicles will include 15-meter telescopic towers for battlefield connectivity, with deliveries starting in 2026. The move is part of broader efforts to modernize command and control infrastructure.
• In April 2025, Spain's Tecnove partnered with Ukraine’s Praktika to produce Djura and Kozak armored vehicles locally. Based on Toyota and V-hull platforms, the vehicles will serve medical, troop transport, and special ops roles, enhancing Spain’s role in global armored vehicle supply.
• In 2025, Canada’s Roshel is considering setting up an armored vehicle plant in Poland to boost production of its Senator MRAPs amid rising demand from Europe and Ukraine, aiming to expand capacity and strengthen supply to NATO partners.

Key Market Players

• BAE Systems
• General Dynamics European Land Systems (GDELS)
• Krauss-Maffei Wegmann (KMW)
• Lockheed Martin
• Nexter Systems
• Oshkosh Defense
• Polska Grupa Zbrojeniowa (PGZ)
• Rheinmetall AG
• Rosoboronexport
• Thales Group

Report Scope:

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

·          Europe Armored Fighting Vehicle Market, By Type:

o   Armored Personnel Carriers (APCs)

o   Combat Support Vehicles

o   Infantry Fighting Vehicles (IFVs)

o   Main Battle Tanks (MBTs)

o   Reconnaissance Vehicles

o   Self-Propelled Artillery

·         Europe Armored Fighting Vehicle Market, By Vehicle:

o   Tracked

o   Wheeled

·         Europe Armored Fighting Vehicle Market, By Application:

o   Defense

o   Homeland Security

·         Europe Armored Fighting Vehicle Market, By Country:

o   Germany

o   United Kingdom

o   France

o   Italy

o   Netherlands

o   Spain

o   Russia

o   Rest of Europe

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the Europe Armored Fighting Vehicle Market.

Available Customizations:

Europe Armored Fighting Vehicle Market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

·         Detailed analysis and profiling of additional market players (up to five).

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