Forecast evaluates market for military armor applications

Vector Strategy's forecast of U.S. military ground vehicle and armor procurement presents three scenarios based on different potential budget outcomes in the United States.

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Vector Strategy (Southern Pines, N.C., USA) has published “US Military Ground Vehicle and Armor Procurement Forecast 2020.” Vector Strategy developed three scenarios in the report. The first scenario reflects the FY13 budget as requested by the U.S. Department of Defense (DOD). The second scenario adds procurement to support production lines in FY13 through FY16. A final scenario projects vehicle procurement if additional DOD funding cuts are made, beyond those already incorporated in the FY13 budget request, to further address the national debt crisis.

Highlights from the report include:

  • The DOD has cut its vehicle procurement outlook for FY14 to FY20 by an average of $2.2 billion annually compared to what it was outlining last year to what it indicates in its FY13 budget request and in its current program modernization plans.
  • U.S. military ground vehicle procurement in FY13 contracts 39 percent from FY12 levels.
  • FY14 represents the lowest year of U.S. military ground vehicle procurement over the entire forecast horizon. After a procurement decline of 39 percent in FY13, the market will experience another decline of 44 percent in FY14.
  • As new vehicle modernization programs and new platforms initiate in FY15 to FY20, vehicle procurement climbs at an average annual growth rate of 36 percent from FY15 to FY20.
  • The best hypothesis for FY13 to FY20 vehicle procurement funding is a blend of financially modest additions to keep the industry sustained in FY13 to FY16, and then reductions to GCV and JLTV procurement rates in FY17 to FY20 to rein in extremely high vehicle funding requirements. Vector presents an alternative forecast of FY13 to FY20 that provides a more balanced outlook for the U.S. military vehicle industry and is an outlook that the U.S. Congress is more likely to support.
  • U.S. Army leadership has conservatively indicated that future TWV Approved Acquisition Objectives (AAOs) could fall 30 percent from current TWV AAOs. The decline could be even higher.
  • Although most national news services are devoted to coverage of the 2012 Presidential race and election, the 2012 U.S. Senate elections are likely more influential on how the U.S. will address the national deficit crisis in the future.

Vector Strategy's forecast can be purchased for $3,495 (single site license) or $5,245 (enterprise-wide license for corporations with multiple divisions). Contact Lisa Kandalaft at +1 407-325-2612 or lkandalaft@vector-strategy.com for more information.