Military Fighting Vehicle Manufacturing in France - Market Size, Industry Analysis, Trends and Forecasts (2025-2029)

Military Fighting Vehicle Manufacturing in France industry analysis

The industry has been shaped by France’s recent strategic defence initiatives. Stemming from the Strategic Defence and National Security Review of 2017 and bolstered further by the Military Programming Law (LPM) 2019-2025, there has been a marked increase in defence spending in recent years. France is committed to modernising its military equipment, addressing mounting global security threats and reaching NATO's defence spending target. Central to this initiative is the SCORPION program, which aims to produce cutting-edge military vehicles in response to both domestic and foreign demands.
Revenue is forecast to climb at a compound annual rate of 0.8% over the five years through 2025 to reach €1.3 billion. The SCORPION project has been instrumental in driving output over the period, with orders for thousands of new and upgraded vehicles, boosting revenue among manufacturers. Increased public defence budgets and greater focus on national security following Russia’s invasion of Ukraine have also supported growth, particularly in 2022, when soaring steel prices incited a hike in vehicle prices. Export opportunities, such as Belgium's €1.5 billion order for vehicles produced as part of the SCORPION program, have further diversified income streams. Revenue is set to expand by 2.5% in 2025.
Revenue is slated to creep upwards at a compound annual rate of 0.5% over the five years through 2030, reaching €1.3 billion. The upcoming Military Programming Law (LPM) 2024-2029 plans substantial budgetary increases, providing opportunities for military vehicle manufacturers to expand production capacities. Although the SCORPION program’s delivery rate is set to slow, continued funding for the program will ensure sustained output.

Trends and Insights

• France & Germany dominate European manufacturing revenue. According to Eurostat, Germany and France collectively generated 70.1% of military fighting vehicle manufacturing revenue in 2020, hosting the industry’s major player, KMW+NEXTER Defense Systems NV.
• The Russia-Ukraine conflict boosts orders of wheeled armoured military vehicles. In July 2023, Rheinmetall announced it would open an armoured vehicle plant in West Ukraine at an estimated cost of €200 million, with a capacity to produce 400 vehicles annually.
• Manufacturers compete on quality, innovation, delivery times and reputation. Quality competition is solid between manufacturers and high production costs mean companies must secure large orders to make manufacturing worthwhile.