April 23, 2012 - Vector Strategy Releases New US Military Ground Vehicle and Armor Forecast.
Vector Strategy has published a new release of their US Military Ground Vehicle and Armor Procurement Forecast. The new forecast was released on April 20, 2012 and is available for immediate purchase and electronic delivery.
Vector Strategy developed three scenarios for future vehicle and armor procurement within their new forecast. The first scenario reflects the FY13 budget and its Future Year Defense Plan (FYDP) as requested by the US Army and the USMC in February 2012. The second scenario adds funding back into the budget to support production lines in FY13 through FY16. A final scenario projects vehicle procurement if additional DoD funding cuts are made, beyond those already incorporated in the FY13 budget request, to further address the national debt crisis.
According to Marcia Price, president of Vector Strategy, "After analyzing the FY13 budget as requested, we found two potential issues. First, funding in FY14 to FY16 is not adequate to keep production lines warm and funding in FY18 to FY20 is not realistic in light of current and future fiscal environments."
As new vehicle modernization programs and new platforms initiate in FY15 to FY20, vehicle procurement climbs at an average annual growth rate of 36% from FY15 to FY20. This growth rate reflects DoD plans outlined in the FY13 budget request and in program timelines communicated by the DoD at recent conferences and industry days. Vector Strategy does not believe this is a realistic growth rate for military ground vehicle procurement for FY15 to FY20.
"The US Army appears to have front-end loaded cuts in vehicle procurement funding in FY14 to FY16, at the expense of production line loading during those fiscal years. This provides them with more funding available in FY17 to FY20 for new vehicle modernization programs like the AMPV, GCV, and the more substantial Abrams ECP 1 and Bradley ECP 2", continues Ms. Price. Although, the DoD has reduced their outlook for total funding by $259 billion for FY13 to FY17 when comparing their FY12 budget to their FY13 budget , the DoD seems to have hit US Army ground vehicle funding particularly hard in FY14 to FY16 within their FY13 budget request.
An AMPV acceleration, additional HMMWV recapitalizations and Abrams upgrades, HET procurement, and a Stryker ECP/modernization are some of the assumptions Vector Strategy has incorporated in their Scenario B to keep production lines warm from FY13 to FY16.
Ms. Price explains, "We've made financially modest assumptions to keep the industry sustained in FY13 to FY16; likewise, we've made some cuts to procurement rates of the GCV and JLTV in FY17 to FY20 to rein in vehicle funding. Overall, our alternative forecast of FY13 to FY20 provides a more balanced outlook for the US military vehicle industry. It will be interesting to see what path Congress takes as they mark-up the FY13 budget request. We'd be happy to advise them."
Additional conclusions and more information from US Military Ground Vehicle and Armor Procurement Forecast can be found on Vector Strategy's website at www.vector-strategy.com. Follow Vector Strategy on twitter to get insight on industry news and commentary at www.twitter.com/vectorstrategy.
About Vector Strategy, Inc. Vector Strategy offers reports, publications, and other market research services to the military armor industry. Vector Strategy advises companies of technology trends, government procurement, market size and growth, industry players, supply chain issues, and other intelligence that business executives need to make informed decisions and build effective strategic plans.
For more information contact Ms. Marcia Price, Vector Strategy at 910-585-6228 or mprice@vector-strategy.com.
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