Vetronics Market Regional Analysis

What Makes Asia-Pacific a Leader in Vetronics?

The Asia-Pacific region is a strong market for vetronics, and is continuing to expand, primarily due to increases in defense spending, and modernization programs that countries are pursuing to modernize their military capabilities. Countries like China, India, Japan and South Korea continue to increase defense spending to secure the defense of their respective nations, especially as tensions grow in regions like the South China Sea. Growing expenditures on defense procurement are leading to a focus on modernizations for military vehicles, such as vetronics command and control, communications, and navigation systems. A good example is India's procurement of 693 armament upgrades to the Infantry Combat Vehicles. On top of modernization for purpose-built military vehicles, the integration of advanced technologies like artificial intelligence and the internet of things (IoT), to upgrade less capable military platforms, is also an emerging trend leading to demands for modern vetronics. Countries can gain better situational awareness and be operationally more efficient in several areas as these technologies apply across all terrains and conditions in the Asia-Pacific region.

Japan Vetronics Market

​ Japan's vetronics market is experiencing consistent growth due to the country's commitment to modernizing its military capabilities with new electronic technologies for military vehicles. The growth in vetronics market is supported by overall rising defense expenditures associated with national and regional security issues stemming from tensions with neighboring countries and the necessity to utilize advanced technological capabilities. The Japan Ministry of Defense wants to improve capability in constraining, command, control, communication, and navigation systems in ground combat vehicles, including the acquisition and implementation of AI and cyber security features.

• The upgrade of Japan's main battle tanks and armored vehicles to new advanced vetronics was announced in July 2023. The objective of the upgrade is to achieve improved situational awareness, interoperability, and operational efficiency across any type of terrain.

China Vetronics Market

​ The vetronics sector in China is expanding at a rapid rate, as a result of considerable modernization efforts in its defense sector and defense spending increases. The People's Liberation Army (PLA) is increasing the usage of aerospace electrical systems, or vetronics systems, in armored land vehicles to improve capabilities in command, control, communications, navigation, and intelligence. Vital factors resulting in growth of vetronics includes the emerging trend towards artificial intelligence (AI) driven systems, drone and robotics development, and the emphasis shifting from platform-centric warfare to network-centric warfare. The PLA modernization projects and programs are ultimately aimed towards improving situational awareness and operational effectiveness across military platforms, with a balanced focus on improved performance of systems.

• In October 2019, when China unveiled the ZBD-04A Infantry Fighting Vehicle (IFV) to the world having developed it over the previous two years at the 70th birthday of the Peoples Republic of China, the motor vehicle to the PLA was a new generation IFV presented with a digital information system, battle management system, digital radio, and Beidou satellite navigation, showcasing Chinas commitment to bring its vetronics to the next level.

India Vetronics Market

The vetronics market in India is experiencing tremendous growth due to India's increased focus on the modernization of the defense sector and self-reliance initiatives. The increase in demand for vetronics is due to multiple factors, including the "Make in India" program and higher defense budgets, as well as emerging advanced technologies like artificial intelligence (AI), the internet of things (IoT), and cybersecurity in military vehicles and platforms. The Indian Army is rolling out an initiative called Future Infantry Soldier as a System (F-INSAS) that seeks to provide the soldier with the best possible platforms for communications and situational awareness.

• At Aero India 2025, India featured next-generation defence technologies, such as AI-enabled-unmanned aerial vehicles (UAVs) and autonomous warfare systems, which were promoting India's ambitions to expand its vetronics capabilities.

Why is North America Seen as a Highly Opportune Region?

The North American market for vetronics is growing rapidly, primarily driven by the United States' significant defense budget and ongoing military modernization initiatives. The U.S. Army Next-Generation Combat Vehicle (NGCV) program, including work on the Optionally Manned Fighting Vehicle (OMFV), is a representative example of modernizing old platforms with new, networked equipment. These will be used to improve battlefield communications, situational awareness, and operational effectiveness. In Canada, the shift to the LAV 6.0 Armored Combat Support Vehicle fleet is an affirmation of land-based platform improvement using cutting-edge vetronics. The emphasis in the region on embedding artificial intelligence, cybersecurity features, and autonomy in military vehicles is again driving the market growth

United States Vetronics Market

The industry background of U.S. vetronics is optimistic. This optimism is due to a heavy defense budget and a strategy that stresses modernizing the military capability. It refers to the adoption of state-of-the-art technologies, such as AI, machine learning, and autonomous systems for military vehicles, for which the primary stimulants are expected to be improvements in situational awareness, decision making, and battlefield operations. The robotic combat vehicle project is a perfect example; in this case, the autonomous travel and threat recognition functionality are provided through AI. Also to meet the emerging threats is additional motivation for advanced vetronics to protect them against future threats.

• In February 2023, the U.S. army announced a contract with General Dynamics worth $481.6 million for the maintenance and upgrades of the AN/MLQ-44 Prophet-Enhanced SIGINT vetronics system, which highlighted continued investment in state-of-the-art electronic warfare solutions.

Canada Vetronics Market

The Canada vetronics market is expected to see steady growth with increasing defense modernization programs as well as increased demand for new military vehicles with embedded electronic systems to support the troop on the battleground. The investment from the Canadian government into new armored vehicle fleets and battlefield communications systems is contributing to an increase in demand. AI, IoT, and cybersecurity developments that are being integrated into defense platforms, as well as continued collaboration with NATO partners and advances in the military technology space are also driving more demand and therefore, growth in the Canada vetronics market. Situational awareness capabilities, vehicle survivability and mission effectiveness are leading the charge for continued innovation and adoption of new vetronics systems in Canada.

• In August 2019, General Dynamics Land Systems-Canada received a $2 billion contract to provide the Canadian Armed Forces with 360 LAV 6.0 armored vehicles for improved armored vehicle capability.