February 28, 2012

‘Armoured Vehicles 2012’ industry report

This article is a summary of Defence IQ’s ‘Armoured Vehicles 2012’ industry report, which explores how the future of the global armoured vehicle market is likely to evolve over the next decade. The report is based on a survey of 196 senior executives and professionals within the armoured vehicle domain, which includes both commercial and military respondents.
Topics examined include; armoured vehicle design requirements, key emerging global markets, the lessons learned from Iraq and Afghanistan, and the impact of the global economic meltdown as defence budgets (at least in the traditionally big-spending defence nations) continue to wane.
The majority of survey respondents derived from the commercial sector, accounting for 69% of total responses. Military personnel form the remaining 31%, which includes ranking Colonels, Lieutenant Colonels, and Captains. Almost half of survey participants are based in either the UK (28%) or the United States (19%). However, with the armoured vehicle community being so diverse and disparate, answers were sourced from nations all over the globe including Iran, Singapore, Brazil, UAE, Pakistan, Tunisia, South Africa, Brazil, Poland, Bahrain, Saudi Arabia, and so the list goes on; in total, responses were gathered from individuals in 36 distinct countries across every continent.
“IEDs, IEDs, IEDs”
What are the critical threats armoured vehicles should be designed to protect against in the future?
In the graph below we can see that both commercial (95%) and military respondents (89%) identified the roadside bomb as the most critical threat “when considering the future battlespace”.
Improvised Explosive Devices (IEDs) are plainly the key threat vehicles should look to protect against over the next decade, that is apparent from the graph, but the number of responses citing the exact same answer – “IEDs, IEDs, IEDs” – is unequivocal and revealing. Firstly, this illustrates that there is a patent unanimity among vehicle experts that IEDs are the number one most significant threat facing road-transported military personnel. But it also highlights rather well that, such is their prevalence and devastating impact, they present the number two and three most potent danger to armoured vehicles as well: “IEDs, IEDs, IEDs.” All other threats, though clear and present, must be considered ancillary to the biggest killer on the frontlines and backstreets: IEDs.
The impact of IEDs underpins one of the key lessons learned from Iraq and Afghanistan: Armoured vehicles should be fit for purpose and procured based on requirements, not price. The use of the Snatch Land Rover in the early days of the conflict is reported to have cost the lives of numerous UK service personnel, leading to it being infamously known as a “death trap.” The Snatch is a sound, reliable vehicle for the arena it was originally designed for – in Iraq and Afghanistan it was not fit for purpose. Understanding the threat environment and providing adequate equipment to combat it is fundamental; because of Iraq and Afghanistan the public, let alone the military, will not settle for anything less.
The term “when considering the future battlespace” is worth exploring here too. IEDs are currently the number one killer of forces abroad, primarily locked in counterinsurgency operations facing an enemy almost unseen, often indiscriminate, and always dangerous. The overwhelming sentiment here suggests that this type of warfare will linger for at least the next ten years – nodding towards continued operations in the Middle East and potential conflict in North Africa. President Obama and Defense Secretary Leon Panetta recently unveiled the U.S.’s revised global defence strategy, which marks a step-change in focus moving from Europe towards Asia. While eyes may be turning east, it seems the grunt work will continue to take place in the MEA region as any potential conflict in the Far East would not be one of counterinsurgency where IEDs were utilised as the principal form of attack.
Although, perhaps it is worth remembering what Brigadier General Norbert Huber, Head of Force Development Division at the Austrian MoD, told delegates at the recent International Armoured Vehicles 2012 conference:
“We always try to win the last war without giving much consideration about how to win the next war.”
Survivability: Balancing the capability gap
When designing an armoured vehicle, which attributes should be afforded the most significance? What are the key criteria around which everything else should revolve? For armoured vehicle designers there is always a play-off between cost, protection and weight. “If only I knew which was more important,” they say. “Which do I prioritise – cost, weight, or protection?”
The answer is protection.
Whether respondents are in the military or industry, the consensus leads to protection being the dominant design requirement for armoured vehicles over the next ten years. 76% of commercial respondents and 66% of military respondents identified IED and blast as the key requirement, closely followed by ballistic protection (with 57% and 58% respectively).
Cost misses the podium altogether, managing to just about scrape it’s way into fourth place for both sets of respondents. Even with the bleak economic climate as a backdrop, cost is not perceived to be a primary concern. These findings are supported by Colonel Pekka Toveri, Commanding Officer Armoured Brigade PL5, Finnish Army, who revealed that for mission operations the top three priorities were protection, mobility and firepower, in that order.
Perhaps the most surprising finding from the survey is the low response rate for “power/weight ratio.” While it’s apparent that protection is the chief concern, this always works in harmony with the ‘weight’ aspect; taking these two together, we arrive at what is actually the fundamental issue: performance. Performance infers survivability, survivability is an upshot of performance. As a result, weight and protection are directly proportional.
“We will not neglect mobility … in fact survivability is in a way a balance between protection, fire power and mobility,” said Brigadier General Chris Gildenhuys, Chief of the South African Armour Foundation, South African Army, at International Armoured Vehicles South Africa last year.
Mobility, which is predominantly regulated by the power-to-weight ratio, is particularly relevant to the light armoured vehicle variant.
“Protection can be offset by mobility,” said Brigadier General C.P. Mohanty, North Kivu Brigade Commander, MONUSCO Mission to the DRC, United Nations. “It is the mobility with which we can overcome the protection requirements … we need to have light armoured vehicles with high power-to-weight ratios and high mobility, which is the only way I think we can achieve better protection.”
Economic downturn sparks strategic shift
The sluggish economy is an overriding concern for industry and the military alike as the impact of budget cuts begins to put pressure on all links in the supply chain.
When asked what the most significant factor affecting armoured vehicle procurement will be over the next decade, “economic instability” came away with a resounding 79% of the vote. The next closest issue, “required technology not being commercially available,” was 53% adrift, with just 26% identifying it as an important factor. Economic instability is not just an inconvenient issue presenting short-term discomfort, it’s a cancer.
With the U.S. Department of Defence (DoD) required to make cuts in the order of $450 billion over the next ten years, we can see why. But in the recent briefing at the Pentagon where Obama and Panetta delivered their new defence strategy, both were quick to stress that America’s war-fighting strategy had to change regardless of fiscal constraints. The threats of the 21st Century require it. "The size of our defence budgets has to be driven by a strategy, not the other way around,” said Obama. Panetta went on to state: "The savings we've been mandated to achieve must be driven by strategy ... not by numbers alone."
Cost aside then, war-fighting and business strategies must adapt to the changing political environment. Obama said that the U.S. government is now “turning the page” on the post-9/11 world and moving onto a new chapter. If this is the case, let’s hope the contents of the next one read more like an instruction manual. That’s because this is a fundamental challenge that has previously dogged the armoured vehicle industry: Miscommunication between the public and private sector.
Top-down communication breakdown is one the central woes identified by a recent Public Accounts Committee (PAC) report on the UK’s armoured vehicle procurement process, entitled ‘The cost-effective delivery of an armoured vehicle capability.’ “Over the past six years the Department has removed £47.4 billion from its equipment programme up to 2020-21,” the report states. But here’s the key statistic; of that £47.4 billion funding gap, £10.8 billion (23%) has been removed from armour vehicle projects alone.
Armoured vehicle programmes, it seems, have been easy prey. That must change. While the UK government is not cutting current capacity, it is constricting future capability. Armoured vehicles will be procured over the next decade, but they will not be the bespoke, next-generation variant once envisioned. R&D is the real loser in this economic climate; it’s not just the drawbacks and downgrades being felt today, but the stifling of innovation for tomorrow.
But is this the case universally? Military respondents were asked the following question: To what extent will budget cuts impact armoured vehicle procurement over the next 10 years? Colonel István Talián, of the Hungarian Embassy’s Defence Section, rather succinctly replied as follows:
“In Europe critically, in the US heavily, in Asia insignificantly.”
In the West it is known as the ‘Global economic crisis’, but for many prospering nations such as China and India, it is merely the ‘North Atlantic economic crisis’.
Land of hope and glory
Identifying and exploiting new and emerging markets is the critical next step for global armoured vehicle designers, manufacturers and integrators.
With India highlighted by 57% of all respondents as the country with the greatest potential for growth, there’s little confusion about where priorities lie. Looking at the graph, there is a marked, steady trend from low to high. That is until you get to the very top, until you get to India.
In his recent New Year message, Indian Prime Minister Dr. Manmohan Singh, asserted: “Our Army, our Navy and our Air Force require modernisation and upgradation of personnel and systems. Ensuring this will remain my most important task as Prime Minister.”
It’s no secret India will spend a great deal on defence and security over the next decade as it seeks to establish a world class and robust national security infrastructure, but it’s unclear how much of this business will go to international tender. India has designs on a policy of self-sufficiency whenever possible; the armoured vehicle industry would be unwise to pin all its hopes on one country.
Underpinning the sentiment expressed by Taliàn that the state of the European market is critical, the bottom five countries surveyed are all European: Germany (11%), France (10%), Other Europe (7%), Poland (5%) and Sweden (4%). With the U.S. set to remove its troops from European shores and station them in the Asia-Pacific region, it certainly looks like the European defence market is in peril. Add the EU crisis into the balance and you could argue it’s toxic.
Geopolitically, the two most interesting countries in the top ten here are Australia and Turkey. Australia will be of vital strategic importance to the U.S. as China continues to impress its dominance not just in the East, but as it begins its own Manifest Destiny and encroaches on the West too. Tensions between Australia and China are already strained because of America’s heightened regional influence; it remains to be seen how this dynamic will play out and what the consequences could be for the armoured vehicle industry. In December the Australian government took what it described as “the next step” in its $7.5 billion Project Overlander programme that will provide the Australian Defence Force with around 7,500 new vehicles over the next decade. Rheinmetall MAN Military Vehicles Australia and Thales Australia were down-selected to supply the variants. Turkey is also a geopolitical cornerstone, being quite literally the gateway between East and West, and central to any Middle East strategies in the future. This aside, it also has the world’s fourth largest army and a defence manufacturing base which is on the uptick.
29% of respondents indicated that China will be an important growth market over the next decade. While its ambitions and wealth are undoubtedly accelerating, the question remains how to penetrate this market and take advantage of the country’s growing economy and military might. China is arguably a bigger market than India and before conducting this survey we may have expected the results for India and China to have been the other way around. However, respondents have clearly shown that while China may spend more money on defence over the next ten years, India is a far more accessible market and the one where industry can gain the most traction in.
The conclusion that it’s ‘all eyes to the East’ may not be a surprising one. The absolute conviction and commitment to India as the Promised Land perhaps should be.


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