The military ground vehicle armor market: Strategies for coping with decline

Marcia Price (Vector Strategy Inc., Southern Pines, N.C.) serves up predictions for the ground vehicle armor market and offers armor manufacturers a strategy for dealing with the current downturn.


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As suppliers of antiballistic composites know too well, this market has experienced declining demand in the past year. The near-term does not look any better. Composite materials required to meet the 2011 needs of the U.S. Army’s military ground vehicle armor procurement program amounted to only 6 million lb (nearly 2,722 metric tonnes). This is a significant decline from peak composite-material requirements of nearly 25 million lb (11,340 metric tonnes) in prerecession 2008.

As the demand for military ground vehicle armor has declined, the industry also has experienced decreased pricing for all armor materials. The decline has ranged from 15 to 55 percent, depending on the material type. Specifically, most fiber and composites prices have declined 20 to 25 percent from 2008 to 2011. Thus, reduced demand and reduced pricing have contributed to the significant decline in armor composites and fiber values.
After a significant retrenchment of U.S. Army military ground vehicle armor procurement funding in 2012 and 2013, composite material requirements might recover by 2016 to 2011 levels.

The Army’s Mine Resistant Ambush Protected (MRAP) vehicle program was the impetus for extraordinary requirements for composites from 2007 through 2009, and production capacity within the composites industry expanded to meet these requirements. This level of demand is unlikely to be experienced again unless current or future contingency operations require a fleet of new vehicles, or if existing vehicles require significant armoring against a new threat that is best defeated with composites.

Although a modest recovery in the antiballistic composites market is forecasted, this recovery is difficult to predict. The failure of the U.S. Congressional Super Committee and the pending 2012 U.S. presidential election make it likely that future defense procurement and U.S. Army vehicle modernization plans will remain either in limbo or in constant flux over the next 12 to 18 months.

As the market moves toward 2020, demand for composite armor should be driven by the HMMWV Modernized Expanded Capacity Vehicle (MECV), the Joint Light Tactical Vehicle (JLTV), a replacement for the M113 Armored Personnel Carrier and the Ground Combat Vehicle (GCV). However, the industry is likely to see these programs move forward more slowly than previous programs as annual funding for procurement and, perhaps, even research and development is reduced.

What can composite manufacturers do during this period of declining demand and uncertainty? Stay focused on ballistic armor research and development efforts. The market will return, and companies need to be ready to support this future demand for advanced armor solutions. Threat levels will undoubtedly increase, and lightweight, multi-threat armor solutions will be procured. To address declining antiballistic composite sales, manufacturers’ action items can include the following:


  • Support these development efforts as much as possible with government funding by submitting research topics to Small Business Innovation Research (SBIR) solicitations, broad agency announcements and internal research and development (IRAD) programs.
  • Develop strategies to address nonmilitary and non-U.S. antiballistics
  •     markets.
  • Focus on commercial applications until the demand for antiballistic composites returns.

Another strategy is to acquire another business entity or to be acquired. We see three trends along these lines in current defense-industry acquisitions. The first trend is defense firms acquiring new capabilities totally outside their core business. The second is defense firms acquiring companies that give them the opportunity to supply entire subsystems rather than the single components of the subsystems that they supply today. Finally, we see companies vertically integrating, particularly downstream. For example, a raw material supplier might acquire a company that gives it fabrication capability.

Composites manufacturers that generated a significant portion of their 2007 to 2010 sales from the antiballistic ground vehicle market will need to look at alternative business-development strategies if they hope to replace diminished sales. The alternatives include replacing defense sales with commercial sales, rationalizing their business to adjust to current sales volume, or seeking a suitor. Unfortunately, the defense market is cyclic, and the current fiscal environment yields great uncertainty for antiballistic composites manufacturers in the near term.

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