Analysis: New prospects in shrinking MRAP market

The US Department of Defense (DoD) awarded Mine Resistant Ambush Protected (MRAP) vehicle contracts valued at USD2.8 billion during 2008: down from the peak of USD7.2 billion during the previous year, but still indicative of a strong market.

As in 2007 a variety of different vehicles were ordered, with four companies the prime benificiaries.

BAE Systems, Navistar, Force Protection and General Dynamics Land Systems - Canada (GDLS-C) all gained a proportion of the 10 MRAP contracts that were awarded in 2008. Two organisations, however, were clearly out in front: Navistar and BAE Systems secured 85 per cent of contracts awarded.

Market leaders and contract wins

BAE Systems took 43 per cent of the market share with total orders worth USD1.3 billion. Navistar - a truck company that entered the defence market in 2003 and secured its first US contract in 2007 - was a close second with USD1.2 billion, equating to 42 per cent. GDLS-C received orders worth USD371 million, while Force Protection gained least from the USD2.8 billion outlay, having received orders worth USD59.2 million.

The main reason for BAE Systems' success in the MRAP market is perhaps the fact that three of the five vehicles in the programme were designed and manufactured by BAE companies. These are the Caiman (manufactured by BAE Mobility & Protection Systems, formerly Armor Holdings); RG-33 (made by BAE Land and Armaments, formerly United Defense); and RG-31 (produced by BAE Systems Land Systems OMC, South Africa).

The Caiman provided the greatest gains for BAE Systems, and a single USD481.8 million order was placed in March for 1,024 vehicles. 265 of 821 words