NEWTOWN, Conn. -- The Forecast International Weapons Group expects the international light wheeled vehicle market to produce over 52,600 light wheeled vehicles, worth at least $18.8 billion, through 2028.
JLTV: Potential Dominance
The U.S. Department of Defense maintains a revised procurement objective of 53,582 Joint Light Tactical Vehicles (49,099 for the U.S. Army and 4,483 for the U.S. Marine Corps). The U.S. Government Accountability Office (GAO) estimates that the Department of Defense will spend over $53.3 billion on the JLTV program - $1.082 billion for RDT&E and at least $52.298 billion for procurement.
In August 2015, the U.S. Army awarded Oshkosh Defense a $6.7 billion firm-fixed-price contract for JLTV production. Once it does finally enter serial production, we believe the JLTV will dominate the light wheeled vehicles market, just as the HMMWV did between 2005 and 2009.
Despite projected budget shortfalls that lead us to significantly downgrade our forecast for the program, we believe the JLTV could still account for nearly 65.7 percent of production, worth over 47 percent of the market value, through 2028.
Reports of the HMMWV's demise appear to have been greatly exaggerated. On August 29, 2017, the U.S. Army awarded AM General a contract worth over $2.2 billion for up to 11,560 new-production HMMWV Expanded Capacity Vehicles through 2023. All of these vehicles are designated for Foreign Military Sales (FMS) customers, with the first customer being Afghanistan.
With this FMS contract, the HMMWV maintains 19.13 percent of production, worth 7.79 percent of the market value, through 2028.
With the JLTV still in its early stages, we note that the HMMWV has regained its former position as the single largest market factor in terms of active serial production. If we remove anticipated JLTV production from the market forecast, we find the HMMWV still dominates the market with 55.71 percent of all light wheeled vehicle production worldwide, worth 14.7 percent of the market, through 2028.