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Center of Vehicle Market Shifts to Mideast, N. Africa

Jun. 15, 2014 - 04:15PM   |  
By AWAD MUSTAFA   |   Comments
UAE tanks drive during joint military maneuvers with the French Army in Abu Dhabi. The Mideast and North Africa are expected to become hot combat vehicle markets.
UAE tanks drive during joint military maneuvers with the French Army in Abu Dhabi. The Mideast and North Africa are expected to become hot combat vehicle markets. (Karim Sahib/AFP)
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DUBAI — The global armored vehicles market is projected to reach $28.62 billion by 2019 with the primary drivers being in the Middle East, North Africa and Asia.

According to a report released in May on armored vehicles by MarketsandMarkets, a US-based global market research firm, the advent of sequestration in the United States, the ending of the Afghan war and European budget cuts have led to a drop in armored vehicle demand in those markets, but the Middle East is expected to boost vehicle procurement significantly over the next 10 years and offset anticipated reductions in the US and Europe.

The report bases the market figures on a projected compound annual growth rate of 4.93 percent.

One driver of the surge in demand is the peace initiative missions undertaken by most of the countries in the Middle East, such as participation in Afghanistan by Qatar, the United Arab Emirates and Saudi Arabia, according to the report. Demand for mine-resistant, ambush-protected vehicles (MRAPs) will be sustained globally due to security concerns in the Middle East and Asia-Pacific, it says.

Countries such as Saudi Arabia, Israel and UAE are expected to spend extensively on armored vehicle procurement.

Furthermore, the development of indigenous facilities in the UAE, Jordan and Algeria provide for expansion into new markets such as Yemen, Somalia and Libya, according to other studies.

“The armored vehicle market in the Middle East and North Africa [MENA] region is a very dynamic arena as interstate conflict, insurgency and the evolution of techniques, tactics and procedures are creating an unstable environment for militaries to operate in,” said Matthew Hedges, military analyst at the Institute for Near East and Gulf Military Analysis.

“A lot of vehicles recently procured in the region have been gifted; there is an increasing demand to secure the borders of the states in the MENA region as there is a dire threat to the regional economies through a combined lack of security,” he added.

However, Hedges said, political obstacles prevent advanced capabilities from being transferred to the North African market.

According to a Middle East armored vehicle market analysis by online defense site Defence IQ, countries in the Middle East region, including Turkey, are continuing to modernize their armored vehicles and acquire new fleets.

Reflecting the growth in Middle East demand, this year at the Middle East Special Operations Forces Exhibition and Conference (SOFEX) in Amman, Oshkosh Defense introduced its MRAP All-Terrain Vehicle variants.

Oshkosh said the new M-ATV family of vehicles has evolved to meet a more diverse range of missions and needs for armed forces in the Middle East-North Africa region. The company, has received orders for nearly 10,000 M-ATVs from the US military and Middle East armed forces, including the United Arab Emirates and Saudi Arabia.

“The Oshkosh M-ATV already stands alone as the battle-tested, highly mobile MRAP of choice for a full range of missions,” said John Urias, Oshkosh executive vice president and president of Oshkosh Defense.

“Our new M-ATV variants expand on this life-saving platform to address a more diverse mix of mission profiles and specialized functionality,” he said.

Regionally, Turkey is expected to bolster the armored vehicle export market as its indigenous industry gains traction and matures over the next decade, developing into a world-class hub for armored vehicle capabilities, according to the Defence IQ analysis.

In June, the Qatar Armed Forces Industry Committee reportedly applied to Turkey’s Competition Board to acquire 49 percent of commercial and military vehicle manufacturer BMC. The $357.5 million investment signifies the gulf state’s priority of maintaining a steady flow of armored vehicles in their cache.

According to the market analysis, interest in wheeled vehicles is rising in the region as more governments look at six-wheel- and eight-wheel-drive vehicles to cope with the terrain and because of their lower maintenance costs.

In response, UAE weapons manufacturer Tawazun Holdings instituted indigenous armored vehicle manufacturer Nimr in 2005. The Nimr vehicles are designed to carry out Mideast military, police and peacekeeping missions thanks to a cooling system that allows the vehicle to withstand the harsh desert climate, which can reach as high as 55 degrees Celsius.

Three prototypes were made in 2000; armored six-wheel-drive versions were inaugurated in 2013 with anti-ballistic technology. The vehicles are in use in Jordan, Lebanon and Libya.

The UAE Armed Forces last year ordered 1,800 Nimr armored vehicles from Tawazun Holdings. The firm also signed an agreement in 2012 to establish a joint company producing Nimr armored vehicles in Algeria. The deal with Groupement de la Promotion de l’Industrie Mécanique was designed to create an Algerian-based armored vehicle manufacturer.

This month, an integrated production facility was initiated for the vehicles at the Tawazun Industrial Park in Abu Dhabi. The facility is expected to be fully operational by October 2015.

“The new integrated facility, the first of its kind in the region, will help Nimr Automotive re-establish itself as a well-recognized brand in the international military vehicles industry and render it in a better position to serve its growing customer base,” said Tawazun Chief Executive Officer Saif Mohamed al-Hajeri.

“The new facility will double current production capacity of four-wheel-drive and six-wheel-drive platforms and will lead to the tapping of new markets in the MENA region, while supporting our production activities in Nimr Algeria,” according to Fahad Saif Harhara, CEO of Nimr Automotive.

The UAE market is vast and growing. After decades of conflict, the emirates states are investing in armored vehicle capabilities. It also enjoys geographic benefits. In Abu Dhabi last year, the Streit Group opened the largest armored vehicle manufacturing facility in the world, according to the Defence IQ analysis.

“The UAE is a very well-located country, geographically,” said Guerman Goutorov, Streit’s chairman. “You have access to Asia, Africa, Europe and the other Middle East countries. … You’re connected to the [entire] world.”

According to Hedges, domestic production is increasing within the MENA region, especially the Gulf Cooperation Council.

“However, it is still partners such as the Ukraine, Serbia and France, to name but a few, that are continuing to lead military vehicle production for the MENA region.”

Saudi Arabia, with a limited indigenous defense industry, relies heavily on imports. Most armored vehicles are imported, although the Al-Fahd IFV and the Al-Faris 8-400 APC were manufactured by the Abdallah Al Faris Company for Heavy Industries. Saudi is negotiating a deal for 655 humvees with a further batch of 724 eight-wheel light armored vehicles being delivered and 84 more requested. ■


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