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The escalating worries about national security and regional stability stand out as significant catalysts propelling an upsurge in military expenditures among emerging nations. These countries, as their economies burgeon and influence expands, become increasingly aware of potential threats to their autonomy and territorial integrity. The prevailing uncertain geopolitical climate, unresolved border disputes, and ongoing regional conflicts collectively underscore the imperative to fortify defense capabilities.
The confluence of economic growth and augmented fiscal capacity further amplifies the trajectory of heightened defense spending in developing nations. As these countries experience economic expansion, leading to an increase in their GDP growth rates, they naturally allocate a larger proportion of their budgets to defense, aiming to modernize their armed forces. In the year 2021, global military spending witnessed a 0.7% real-term increase, amounting to USD 2,113 billion. Data from the Stockholm International Peace Research Institute reveals that the United States, China, India, the UK, and Russia emerged as the top five spenders, collectively constituting 62% of the total expenditure.
Beyond external threats, numerous emerging countries grapple with internal security challenges, such as terrorism, rebellions, and state border clashes. To effectively counter these multifaceted threats, they invest in the modernization and reinforcement of their military forces. This involves enhancing armament and intelligence capacities, alongside the establishment of indigenous defense industries to reduce dependence on foreign suppliers.
Collaborative efforts between military entities and defense contractors exemplify the commitment to fortify national defense capabilities. For instance, the US Army and BAE Systems have joined forces to expedite the manufacturing of the new Armored Multi-Purpose Vehicle. This strategic collaboration aims to streamline the replacement of aging M113 armored troop carriers, ensuring a more efficient and technologically advanced military fleet.
In essence, the surge in military spending in emerging countries is a multifaceted response to a complex set of challenges. From external geopolitical uncertainties to internal security threats, nations find themselves compelled to allocate resources to bolster their defense apparatus. As economic prosperity intertwines with strategic concerns, the trajectory of increased military spending becomes a pivotal aspect of navigating the intricate landscape of global security and stability.
Covered Aspects:
| Report Attribute/Metric | Details |
|---|---|
| Market Opportunities | · Rise of vehicle intercom in the defense sector· Modernization of military and law enforcement sectors |
| Market Dynamics | · Increasing military expenditure of developing countries· Increasing need for smooth and uninterrupted communication |
Vehicle Intercom System Market Highlights:
Global Vehicle Intercom System Market Overview
Vehicle Intercom System Market Size was valued at USD 804.2 Million in 2023. The Vehicle Intercom System Market industry is projected to grow from USD 854.0604 Million in 2024 to USD 1383.3 Million by 2032, exhibiting a compound annual growth rate (CAGR) of 6.21% during the forecast period (2024 - 2032). Increasing military expenditure of developing countries and increasing need for smooth and uninterrupted communication are driving the market growth.
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
Vehicle Intercom System Market Opportunity
- Increasing Military Expenditure Of Developing Countries
The escalation in military expenditure in developing nations is propelled by several key drivers. First and foremost, mounting apprehensions regarding national security and regional stability serve as primary catalysts. As these countries witness economic growth and an increase in their global influence, they become acutely aware of potential threats to their sovereignty and territorial integrity. The prevailing geopolitical uncertainty, unresolved border disputes, and ongoing regional conflicts all contribute to the imperative to fortify their defense capabilities. Furthermore, the economic expansion experienced by these developing countries plays a pivotal role in this phenomenon. As their economies flourish, accompanied by robust GDP growth rates, they allocate a greater proportion of their budgets towards defense to facilitate the modernization of their armed forces. In 2021, the global military expenditure surged to USD 2,113 billion, reflecting a 0.7% increase in real terms. Notably, the top five spenders—namely the United States, China, India, the United Kingdom, and Russia—accounted for a substantial 62% of the total expenditure, underscoring the significance of their military investments on a global scale. In conclusion, the upswing in military spending in developing nations mirrors a proactive approach to safeguarding national interests and maintaining regional stability in response to security concerns, economic growth, and the evolving global landscape.
Recent News:
In January 2024, Axnes Inc., a wireless-communications supplier, will partner with the U.S. Army Program Executive Office, Ground Combat Systems (PEO GCS) to conduct field tests and assessments of the Axnes PNG Wireless Intercom System (WICS) on the M88 armored recovery vehicle. Axnes has entered into an arrangement with the Army to provide the PNG WICS to 105 M88 recovery vehicles. This will improve the safety and situational awareness of both mounted and dismounted personnel during important recovery missions. The PNG utilizes a user-friendly interface and enables simultaneous two-way speech conversation in real-time, allowing users to complete other tasks without using their hands. Three battalions will conduct field tests of the PNG WICS using a fleet of 105 M88 trucks.
Vehicle Intercom System Market Technology Segment Insights
Vehicle Intercom System Technology Insights
Based on Technology, the Vehicle Intercom System Market segmentation includes Analog and Digital. The Digital segment held the majority share in 2022, contributing around ~61 % to the market revenue primarily due to its superior audio quality, noise-cancellation features, and compatibility with modern communication technologies, making it the preferred choice for advanced military and commercial vehicle communication systems.
FIGURE 1 : VEHICLE INTERCOM SYSTEM MARKET, BY TECHNOLOGY, 2022 & 2032 (USD MILLION)
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
Vehicle Intercom System Application Insights
Based on Application, the Vehicle Intercom System Market segmentation includes Military Vehicles, Commercial Vehicles, Airport Ground Support Vehicles, and Emergency Vehicles. The Military Vehicles segment held the majority share in 2022 contributing around ~59% to the market revenue. This can be attributed to the critical need for secure and efficient communication within military vehicles, enhancing situational awareness and mission effectiveness.
Vehicle Intercom System Component Insights
Based on the Component, the Vehicle Intercom System Market segmentation includes Central Unit, Crew Control Unit, Wireless Intercom Unit, Headset Dismounted Interface, Intercom User Unit (IUU), Radio Interface Unit, Loudspeaker Unit, Wire/Cable, Tactical Ethernet Switch And Adapter. The Central Unit segment claims the largest market share in the Vehicle Intercom System Market, underscoring its pivotal role in managing and coordinating communication within vehicle intercom systems. This dominance is attributed to the central unit's crucial function in ensuring seamless and organized communication among various components and users, making it a key element for effective vehicle intercom systems.
Vehicle Intercom System Type Insights
Based on Type, the Vehicle Intercom System Market segmentation includes Wired and Wireless. The Wired segment likely dominates the Vehicle Intercom System Market due to its reliability and security benefits. Wired systems are preferred for critical applications, such as military and emergency vehicles, where dependable and secure communication is essential.
Vehicle Intercom System Regional Insights
By Region, the study provides market insights into North America, Europe, Asia-Pacific, Middle East & Africa, and South America.
In terms of revenue, North America held the share of 29.6% in the Vehicle Intercom System Market in 2022. Economic situations, technological improvements, rapidly evolving connectivity changes in the transportation industry, growing military expenses, and regulatory changes can all have an impact on the need for vehicle intercom systems in North America. These systems are often employed to facilitate communication among soldiers, drivers, passengers, and other individuals in commercial vehicles, rescue vehicles, and military applications. Due to the growing concerns of defense and security requirements, demand for military vehicle intercommunication systems in North America has remained strong. These systems are critical in maintaining good interaction and cooperation among crew members on a variety of military platforms, such as armored vehicles, tanks, and other combat vehicles. The growing emphasis on military modernization, as well as the necessity to improve the capabilities of armored forces, has increased demand for advanced intercom systems.
FIGURE 2 : VEHICLE INTERCOM SYSTEM MARKET SIZE BY REGION 2022 & 2032
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
Further, the major countries studied in the market report are the U.S., Canada, Germany, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.
The Europe held largest market in the world. The demand for military vehicle intercommunication systems in major European countries exhibited similar patterns driven by defense priorities, geopolitical considerations, transportation, public safety, and technological advancements, and the need to enhance military capabilities. Due to the continued involvement in international conflicts, NATO operations, and various other security efforts, countries such as Germany, France, the UK, and Italy continue to have a high demand for military vehicle intercommunication systems. These countries prioritized modernizing their defense forces in order to preserve operational flexibility and effectively respond to evolving security challenges. Furthermore, the increased emphasis on defense modernization and investment in innovative technology increased the demand for cutting-edge intercom solutions.
Asia Pacific is expected to witness the fastest growth in the Vehicle Intercom System market. The rapid development of transportation infrastructure, growth in population, and the need for increased communication and public safety in various vehicle types drove demand for car intercom systems in nations such as China, India, and Japan. Furthermore, the growing emphasis on emergency services and disaster response skills boosted the demand for vehicle communication systems in major Asian countries. During a crisis, communication systems in emergency vehicles permitted quick communication between responders and command centers, boosting response times and coordination.
Vehicle Intercom System Key Market Players & Competitive Insights
The market for vehicle intercom systems is experiencing rapid growth and intense competition owing to the increasing military expenditure of developing countries and the increasing need for smooth and uninterrupted communication. The report provides an analysis of the competitive landscape within the vehicle intercom system market industry, focusing on key players, market share, product offerings, technological advancements, and strategic initiatives. The competitive landscape of the vehicle intercom system market is characterized by a mix of established players with a strong market presence and innovative startups that are disrupting the industry with novel solutions. Understanding the competitive dynamics within the market is essential for businesses and investors to make informed decisions and stay ahead in this dynamic and evolving sector.
According to MRFR analysis, the growth of the vehicle intercom system market is dependent on market conditions. The key vendors in the market are General Dynamics Mission Systems, L3Harris, WB Electronics, Elbit, EID, Thales, SCI Sanmina, Aliter Technologies, IDE Intracom Defense, Cobham, Kongsberg, MER Group, Mesit, Telephonics.
These companies are focusing on enhancing their products with the integration of improved technologies. Moreover, these companies are prominent providers of vehicle intercom systems and compete in the vehicle intercom system market to increase their geographic presence, expand their customer base, and form strategic partnerships.
Key Companies in the Vehicle Intercom System Market include
- General Dynamics Mission Systems
- L3Harris
- WB Electronics
- Elbit
- EID
- Thales
- SCI Sanmina
- Aliter Technologies
- IDE Intracom Defense
- Cobham
- Kongsberg
- MER Group
- Mesit
- Telephonics
Vehicle Intercom System Industry Developments
- In March 2024, the Swedish company INVISIO entered into a contract to provide and include its Intercom and Vehicle systems for a customer in Europe. The Intercom system, which will act as the interface between staff on foot and personnel in vehicles, has a price tag of 230 million kronor ($22 million). The vehicle radios, sourced from a third party, have a value of 235 million kronor ($23 million). The company will serve as the principal contractor for the whole execution of Dismounted Soldier systems, encompassing installation and training. The deliveries are scheduled to occur from the second to fourth quarters of 2024, while maintenance and spare part packages are anticipated to be received in 2025 and 2026 respectively.
- In July 2023, L3Harris has been awarded a $ 10,424,820 contract to provide the Indonesian government with communication and electronics equipment, as well as engineering technical services. The contract includes the delivery of multi-band radios, very high and ultra-frequency radios, high frequency radios, Battle Management Systems, intercom systems, maintenance benches, accessories, and spares. The work will be performed in Indonesia, with an expected completion date of February 28, 2025.
- In October 2022, The WB GROUP debuted the FONET MK2 digital vehicle communication platform and the SILENT NETWORK military communications system at the AUSA show in the U.S.
- In September 2022, The agreement for the creation of the GLADIUS 2 surveillance and strike unmanned system has been signed at the International Defence Industry Exhibition, in the midst of the Deputy Prime Minister and Minister of National Defence, Poland.
Vehicle Intercom System Market Segmentation
Vehicle Intercom System Technology Outlook
- Analog
- Digital
Vehicle Intercom System Application Outlook
- Military Vehicles
- Commercial Vehicles
- Airport Ground Support Vehicles
- Emergency Vehicles
Vehicle Intercom System Component Outlook
- Central Unit
- Crew Control Unit
- Wireless Intercom Unit
- Headset Dismounted Interface
- Intercom User Unit (IUU)
- Radio Interface Unit
- Loudspeaker Unit
- Wire/Cable
- Tactical Ethernet Switch And Adapter
Vehicle Intercom System Type Outlook
- Wired
- Wireless
Vehicle Intercom System Regional Outlook
North America
US
Canada
Europe
UK
Germany
France
Italy
Spain
Rest of Europe
Asia-Pacific
China
Japan
India
Australia
South Korea
Rest of Asia Pacific
Middle East & Africa
GCC Countries
South Africa
Rest of Middle East & Africa
South America
Chile
Brazil
Rest of South America
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