Eastern armour: the Asian market for military ground vehicles

Eastern armour: the Asian market for military ground vehicles [Content preview Subscribe to Jane s Defence Weekly for full article] Asian spending on armoured vehicles during the next decade is likely to reach USD166 billion. Daksh Nakra investigates where the money is being spent The defence and security challenges faced by Asian countries have increased significantly during the past decade, leading governments to take substantive steps to augment military ground capabilities to defend their territorial integrity: measures that have been supported by the expansion of these countries economies. Consequently, the region has experienced new strategic alliances through trade partnerships that have strengthened domestic defence industries and boosted exports. Asian military ground vehicle spending: Top 10 countries (2017 26). (IHS Markit) 1717399 China, India, and South Korea are among the world s top 10 spenders on military vehicles and are likely to contribute more than USD126 billion to the global market during the next decade. The 10- year forecast for military ground vehicles (MGVs) for the 2017 26 period suggests that overall Asian spending will be USD166 billion. This high spend is primarily attributable to China s assertiveness, increasing North Korean aggression, and concerns about internal threats and border protection for a number of buyers. Page 1 of 14

Global military ground vehicle spending: Top 10 countries (2017 26). (IHS Markit) 1717400 Even though countries like the United States and Russia continue to be the dominant suppliers of military equipment to the region, domestic industries in Asia are maturing toward being able to independently fulfil their countries requirements. [Continued in full version ] Military ground vehicle spending by vehicle segment (2017 26). (IHS Markit) China 1717402 China remains the top spender on military vehicles in Asia, with a 10-year spend of USD72.6 billion and a strong compound annual growth rate (CAGR) of 5.89%, which reflects its intentions to reduce its dependency on Soviet-era heavy forces and to establish a more modern, professional, and flexible force. The doctrine of the People s Liberation Army (PLA) emphasises a capability to conduct high-tempo conventional joint warfare within the region, supported by consistently high levels of research and development (R&D) funding. Although China has evolved from its dependency on equipment sourced from Russia to domestically designed and developed Page 2 of 14

platforms, it continues to mirror Western and Russian vehicle designs rather than adopting a distinct domestic approach. As China has improved its indigenous design and production capabilities, the country has also increased its focus on exports, leading to an increase in military vehicle sales to South America and Africa as well as limited inroads being made in the East European market. Meanwhile, China has recently been able to forge ties and drive exports to regional militaries such as Bangladesh, Indonesia, Myanmar, the Philippines, and Thailand. China s position as a primary supplier to Southeast Asia is interesting, considering that it is Beijing s geopolitical assertiveness that is driving much of the military modernisation in the region. China: Military ground vehicle spending. (IHS Markit) 1717394 In 2017 a new Chinese IFV prototype was reported to be under trial. Understood to be the successor of the ZBD-04/ZDB-04A, it is likely to be equipped with a new domestically developed 40 mm cased telescopic ammunition (CTA) cannon. Other Chinese AFVs in development include a new 6x6 amphibious armoured vehicle in two configurations and a high-speed amphibious 4x4 armoured personnel carrier (APC) prototype that weighs 5.5 tonnes and can attain speeds of up to 50 km/h in calm water. Given that China is in the process of expanding its marine and airborne infantry, these new amphibious vehicles offer enhanced firepower and mobility for PLA marine expeditionary forces. This supports the PLA s broader strategic direction as laid out in its 2015 white paper, which called for a re-orientation from theatre defence to trans-theatre mobility and the establishment of smaller, multifunctional, and modular units. The PLA has also begun equipping its Southern Theatre Command with a new light tank to deploy opposite India in the Tibetan plateau. Page 3 of 14

China has begun equipping its Southern Theatre Command with new light tanks like the one pictured here, which is reportedly called the Xinqingtan. It carries a 105 mm gun and is designed specifically for mountain combat. (Via Guancha.cn) 1704280 Meanwhile, the PLA is understood to be developing optionally manned technology for its logistic supply trucks, which it will possibly employ for unmanned logistic convoy movement similar to that envisaged by the US Army s Autonomous Ground Resupply (AGR) project. It is possible that, as a result of the continued reduction in the size of the PLA, smart supply vehicles could have a role to play in maintaining and supporting front-line units. The China North Industries Corporation (Norinco) has already developed a prototype known as the Norinco Crew Task Support Unmanned Mobile Platform, which is capable of autonomous operation, tele-operation, follower behaviour, and waypoint navigation. With this technology developed and tested by the Chinese defence industry, it is possible that the system has been transplanted onto recently shown prototype 8x8 tactical trucks. The PLA is carrying out trials with unmanned Norinco truck prototypes. (Chinese MND) 1706835 Norinco is at the forefront of China s drive to restructure its defence-industrial base. Beyond catering to the requirements of the PLA, it is developing and aggressively marketing a wide variety of platforms for export, mostly cost-effective mirrors of Western AFVs. In 2017 it developed a new version of the ZTL-11 wheeled tank destroyer for the export market under the designation ST1. Page 4 of 14

The hull now uses components from the ZBL-08 8x8 APC, which is fielded by the PLA and marketed for export as the VN1. A pair of Norinco ZTL-11 wheeled tank destroyers of People s Liberation Army Navy (PLAN) Marines. (PLAN) 1711880 Several other vehicles have been promoted for export by Norinco, including the VN17 IFV, armed with a 30 mm cannon and two HJ-12 anti-tank missile launchers; an anti-tank variant of the VN12 IFV, armed with a 105 mm gun; an improved version of the VN1 APC, armed with a 30 mm gun and HJ-73 anti-tank missile launcher; the SA2 mobile air-defence system based on a 6x6 truck and equipped with a 76.2 mm/59 calibre anti-aircraft gun capable of firing laser-guided projectiles; the VP11 mine-resistant ambush-protected (MRAP) vehicle; and a VP10 8x8 APC variant configured with a turret-mounted 105 mm gun and 7.62 mm co-axial machine gun. [Continued in full version ] China s GL-5 APS mounted on a VT-4 main battle tank being activated to counter an incoming anti-tank missile. (Norinco) 1707225 India Despite several defence procurement and spending reforms, Indian military vehicle procurements continue to stall and face technical difficulties owing to delays in decision-making; the country s complex Defence Procurement Procedure (DPP); corruption; and the insistence on furthering the Page 5 of 14

government s Make in India initiative without any significant increase in R&D spending or additional support for the country's private defence industry. India: Military ground vehicle spending. (IHS Markit) 1717395 Last year the Indian Ministry of Defence (MoD) scrapped longstanding and critical procurements of land systems worth USD2.5 billion, including for short-range surface-to-air missiles (SAMs) for about USD2 billion, 204 armoured recovery vehicles to support T-90 regiments for USD275 million, and 702 light armoured multipurpose vehicles for USD190 million. However, India has replaced South Korea as the second largest vehicle buyer in the region, with a 10-year spending forecast of USD30.4 billion and a robust CAGR of 6.9% due to a few significant contracts placed by the Indian MoD to boost land capabilities. In May 2017 Larsen and Tubro (L&T) received a USD700 million contract for the production and supply of 100 modified South Korean K9 Thunder 155 mm self-propelled howitzers (SPHs) over 42 months. The largest land equipment contract ever awarded to an Indian private firm, the contract includes co-production of the K9 Vajra, as the vehicle will be designated, with the original equipment manufacturer Hanwha Techwin. The K9 Vajra has been modified to cater for the army s requirements and will use 50% indigenously sourced parts. In July 2017 a much-delayed USD371 million contract was awarded to state-owned Indian defence company Bharat Electronics Limited and the Ordnance Factory Board (OFB) to upgrade 693 Indian Army BMP-2 IFVs. Despite having been fielded for some years, the Arjun main battle tank (MBT) has yet to gain traction with the Indian Army. Extensive modifications led to the re-engineered Arjun Mk II, which was recommended for adoption after 6,000 hours of desert trials and 73 distinct technical improvements over its predecessor. Despite these changes the army remained wary of any commitment and requested a substantial weight reduction, but without affecting any of its 73 enhanced capabilities. A further 20 enhancements have been solicited along with a laserprotection suite. Meanwhile, in October 2017, the Defence Research and Development Page 6 of 14

Organisation (DRDO) announced further refinements to the Arjun Mk II and expressed optimism that at least two armoured regiments would adopt the vehicle. An Indian Arjun Mk II MBT undergoes trials in Rajasthan. (DRDO) 1454189 Instead of the originally planned widespread adoption of the Arjun, it is likely that there will be an order for a further 700 licence-built T-90S Bhishmas from the OFB in the second quarter of 2018. Concurrently India will also be inducting 494 T-90MS MBTs that it acquired in kit form from Russia for USD2 billion to supplement the Bhishma MBTs. Since both variants have been procured without the Russian Shtora soft-kill protection system, DRDO has been assigned to produce an indigenous APS, however previous experience would indicate that this is unlikely to materialise in the near to mid-term. India has ordered 494 T-90MS MBTs in kit form from Russia. (Rosoboronexport) 1710712 Page 7 of 14

Meanwhile, plans are in place related to the Bhishma 2, which is a comprehensive upgrade programme proposed for the T-90S and also forms part of the proposed 700-platform T-90S order. The order would also benefit the OFB by enhancing its production share of the tank from 74% to 96% by manufacturing most of the electronics and mission systems indigenously. The upgrade will include the installation of a new panoramic sight and fire-control system (FCS) for the tank commander, an automatic transmission for improving fuel efficiency, an automatic target tracker, and a completely digital architecture to ensure that the tank can be upgraded in the future. Similar upgrades have already been installed in more than 1,000 in-service T-72 Ajeya MBTs. To match the pace of modernisation of its adversaries, and with the need to replace legacy equipment, India has issued a second request for information (RFI) for the Future Ready Combat Vehicle (FRCV; the previous RFI was released in 2015). Under the project 1,770 multipurpose platforms will be procured to replace the more than 1,400 T-72 MBTs currently in service. The project will be implemented under the recently announced strategic partnership model of India s DPP 2016. The FRCV is broadly modelled on Russia s Armata Universal Combat Platform (the programme for which includes the T-14 MBT and the T-15 heavy IFV), with plans to develop a range of variants on the same chassis, including combat engineering vehicles, armoured recovery vehicles, APCs, and self-propelled artillery systems. The FRCV is an ambitious project, just like its predecessors: the Future Main Battle Tank (FMBT) and accompanying Future Infantry Combat Vehicle (FICV), the latter of which sought to replace more than 2,500 BMP-2s. These projects are now more than a decade behind the original schedule. South Korea [Continued in full version ] South Korea has maintained its position among the top three military vehicle spenders in Asia with a solid CAGR of 4.38%. During the next 10 years it is anticipated that the country will invest USD22.9 billion to modernise its land-warfare capabilities, primarily to address the threat from North Korea. The Republic of Korea Army (RoKA) plans to acquire manoeuvre and rapid-strike capabilities to maintain a significant qualitative edge over the Korean People s Army (KPA). Page 8 of 14

South Korea: Military ground vehicle spending. (IHS Markit) 1717396 South Korea s plans to produce additional Hyundai Rotem K2 (Black Panther) MBTs have been delayed by three years due to technical issues with the platform s indigenously developed transmission system. The country is now considering importing the transmission from a foreign contractor. An initial batch of 100 K2s ordered in 2011 with deliveries commencing in 2014 were fitted with the German MTU 883 diesel engine and Renk transmission system. The RoKA is expected to order more than 600 K2 MBTs to replace its ageing inventories of US-made M47 Patton tanks and older versions of the K1 MBT, which have been in service since the 1980s. K806 (pictured) and K808 wheeled armoured vehicles are entering production for the RoKA under a contract worth USD358 million. (IHS Markit) 1679377 Hyundai Rotem has also developed two prototypes of a new combat engineering vehicle (CEV) for the RoKA s engineer regiments to enable them to undertake a wide range of battlefield missions to support assaulting formations. A production contract is expected in the near future. In December 2017 Hyundai Rotem received a USD358 million contract from South Korea s Defense Acquisition Program Administration (DAPA) to mass produce 6x6 K806 and 8x8 K808 wheeled armoured combat vehicles for the RoKA. The contract follows on from 16 pre-production vehicles that were delivered to the RoKA in late 2016. Although actual numbers were not disclosed it is expected that there will be about 100 16-tonne K806 vehicles and 500 20-tonne K808s. Hyundai Rotem is thought to have the capacity to build about 100 of these vehicles a year. The RoKA is simultaneously aiming to enhance the effectiveness of its artillery forces by introducing new and more-capable rocket artillery and SPHs. The service is now deploying the latest Hanwha Corporation Chun-Mu K239 Long Range Multiple Rocket Launcher (LRMR), which can accommodate a range of calibres of both unguided and Page 9 of 14

guided ammunition. The system can fire 239 mm guided rockets up to 80 km, 227 mm unguided rockets up to a range of 45 km, and can also be equipped with a 130 mm pod for launching K30 and K33 unguided rockets, which have a stated range of 30 km and 36 km respectively. Deliveries of the LRMRL began in August 2015 and it is likely that 58 systems will have been procured by the end of 2018. The RoKA has begun deployment of the Hanwha Corporation Chun-Mu K239 LRMRL, which can accommodate a range of calibres of unguided and guided ammunition. (IHS Markit) 1703942 Meanwhile, the Korean MoD has decided to proceed with an upgrade programme for the RoKA s K9 SPHs, with Hanwha having already developed a new variant called the K9A1. The current fleet is likely to be upgraded to the K9A1 standard imminently and future new-build purchases are likely to be to the new standard. The K9A1 will feature a new Windows OS-based FCS, an 8 kw auxiliary power system, infrared optics, a safety mechanism to prevent operation of the turret when the hatch is opened, and new GPS and inertial navigation systems. Hanwha Techwin has developed an upgraded K9 Thunder SPH called the K9A1, which is likely to be adopted by the RoKA. (Hanwha Techwin) 1717401 Trials of the Hanwha Techwin EVO-105 truck-mounted howitzer were completed in 2016 and the system will be mass produced from this year. The EVO-105 consists of a standard KIA KM500 6x6 Page 10 of 14

five-tonne truck chassis with the rear cargo area modified to accept the upper part of the 105 mm M101 towed gun from the United States. The system also features a modified version of the FCS from the K9 Thunder. DAPA has begun development of a new 120 mm self-propelled mortar based on the Korean Infantry Fighting Vehicle (KIFV) that features a turntable-mounted, rifled 120 mm mortar. However, according to officials the mortar could also be installed in other platforms deployed by the RoKA, including the K21 Next Generation Infantry Fighting Vehicle (NIFV) and the more recent K808. The RoKA currently operates the KIFV integrated with the K242A1 107 mm and K281A1 81 mm mortar systems. Additionally, Hyundai Rotem has been selected to provide the RoKA s next-generation command post vehicle (CPV) and will deliver 500 of these to replace the in-service K277 CPVs based on the ageing M113 chassis. Pakistan [Continued in full version ] Pakistan s 10-year vehicle spend of USD9.5 billion at a strong CAGR of 11.83% has been focused on containing the long-term threat from India and addressing internal security challenges. Procurement has until recently been supported by financial aid from United States, but in recent times deteriorating relations between the two nations have led the US Trump Administration to declare that it is suspending military aid to Pakistan until Islamabad can prove its commitment to Washington s strategic defence and security priorities, including the so-called war on terror. In light of this China has consequently emerged as a trusted and reliable defence partner for Pakistan, providing financial aid and loans to facilitate military sales to Pakistan to increase its strategic influence. Also, since both countries share strategic concerns over India, enhanced defence procurement activity is certain to feature in relations between Pakistan and China. Pakistan: Military ground vehicle spending. (IHS Markit) 1717397 After considerable delays the Pakistan Army has started receiving the Al Khalid-1 MBT, which is a modestly upgraded version of its predecessor: the Al Khalid/MBT 2000. The army received nine tanks in 2016 and an estimated 18 in 2017. The tank s manufacturer, Heavy Industries Taxila Page 11 of 14

(HIT), is understood to be able to produce only 18 Al Khalid-1s per year on average, despite having the capacity to build 50, due to significant budgetary issues. The Al Khalid-I ( I for Improved), also called the Al Khalid-2, is expected to be the leading programme for the Pakistan Army during the next decade. A next-generation tank under joint development by HIT with Norinco s assistance since 2013, the Al Khalid-2 will be powered by a 1,500-hp engine and will feature further improvements to its mobility, armour, and fire- and guncontrol systems. Ukraine will be supplying engines for the tank, under a memorandum of understanding (MOU) signed in late 2016, while Turkey s Aselsan could be supplying nextgeneration electronics for the tank. Series production of the Al Khalid-2 is expected to begin after 2022. To maintain parity with India the Pakistan Army must look to upgrade the tanks it already has in service to bridge the gap until the enhanced new-build Al Khalid-2 can enter service, so Pakistan s T-80UD MBTs are undergoing a modest upgrade in the meantime with the procurement of 88 driver night sights from Ukraine. Pakistan is reportedly also seeking a new SPH to standardise on the 155 mm calibre and has shown interest in the Turkish T-155 Firtina system K9 Thunder (license-produced). It also plans to procure self-propelled mortars to provide organic fire support to its mechanised formations. Other Pakistani requirements include the procurement of new APCs to replace the country s ageing M113 APCs. Plausible considerations for this could be the Chinese VN1 and Yugoimport's Lazar-2; both are being offered with licensed production, with three evaluation units of the latter ordered in 2013. Pakistani manufacturer Blitzkrieg Defense has developed the new Hamza 8 8 multirole combat vehicle, but the current economic conditions are unlikely to allow for large-scale procurement in the near term. Japan [Continued in full version ] Japan s projected vehicle spend of USD9.29 billion during the next 10 years will be directed towards maintaining a formidable defensive posture and sustaining a technological and qualitative edge over its regional rivals. The immediate military threat from North Korea and the longer-term strategic threat from China, along with internal security threats that are arising due to terrorism, are also deciding factors in the country's procurement strategy. Japan is principally dependent on its own mature industry for procurement, which is committed to developing leading-edge technology for its vehicles and other equipment procurements. The Japan Ground Self-Defence Force (JGSDF) is continuing to procure Type 10 MBTs. For its heavy armour and firepower requirement, 97 Type 10 MBTs will be produced by 2018 19 to supplement the Type 90 MBTs within the 300-strong JGSDF tank inventory. Since the first deliveries in 2012, 78 tanks have been delivered. The JGSDF has inducted the recently developed Type 16 Mobile Combat Vehicle (MCV), which is based on a new 8x8 design, with 99 vehicles reported to have entered service. The Type 16 is a highly agile vehicle that weighs about 26 tonnes and is armed with a 105 mm rifled gun. Page 12 of 14

Japan: Military ground vehicle spending. (IHS Markit) 1717398 Meanwhile, Japan s MoD has unveiled a prototype of an 8x8 improved wheeled APC from Japanese supplier Komatsu, which is intended to replace the 389 Type 96 APCs currently in service. The new vehicle has been designed for international peacekeeping mission requirements and rapid deployment to defend Japanese islands. Japan has unveiled a prototype APC (pictured) that is expected to replace the Komatsu Type 96 APC currently in use by the JGSDF. (Japanese MoD) 1692757 After acquiring four AAV7 vehicles in 2013 the Japanese MoD announced a contract award for 30 new AAV7A1 RAM/RS variants in 2016 for USD149 million. Another 11 AAVs were funded in fiscal year 2016 (FY 2016) and the final 11 in FY 2017, bringing the total to 52 vehicles. Further spending [Continued in full version ] Beyond the top spenders Asian nations have been highly active in procurements and upgrades. Indonesia contracted a further 18 CAESAR 155 mm/52-calibre SPHs to augment its existing inventory of 37 vehicles and also ordered Steyr Pandur II 8x8 APCs from the Czech Republic, Page 13 of 14

along with Tatra tactical trucks and General Dynamics M3 amphibious bridging and ferrying systems for USD39 million. Meanwhile, Thailand has ordered 38 VT4/MBT-3000 MBTs from China in two separate orders worth more than USD200 million. The country has also ordered 34 8x8 VN1 APCs from Norinco to strengthen its mechanised capabilities. [Continued in full version ] For the full version and more content: Jane's Defence Industry and Markets Intelligence Centre This analysis is taken from Jane s Defence Industry & Markets Intelligence Centre, which provides world-leading analysis of commercial, industrial and technological defence developments, budget and programme forecasts, and insight into new and emerging defence markets around the world. Jane s defence industry and markets news and analysis is also available within Jane s Defence Weekly. To learn more and to subscribe to Jane s Defence Weekly online, offline or print visit http://magazines.ihs.com/ For advertising solutions visit Jane s Advertising Page 14 of 14