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General Dynamics Corporation’s GD Ordinance and Tactical Systems business unit recently secured a $48.9 million modification deal for the production of Ground Mobility Vehicle (GMV) 1.1. The contract was awarded by the U.S. Special Operations Command, Tampa, FL.
Work related to the contract will be executed in Anniston, ALand is expected to get completed by August 2020.
Demand Drives GMV 1.1
With widespread geo-political tension around the globe, many nations are strengthening their arsenals and taking initiatives to upgrade land-combat military vehicles. To this end, it is imperative to mention that GMV 1.1 is an all-terrain vehicle developed especially for use by special operations forces (SOF). It is air-transportable in Boeing’s BA CH-47/MH-47 heavy lift helicopters.
Notably, initial production run of the GMV 1.1 is 1,297 vehicles. These vehicles will be replacing many of the Ground Mobility Vehicles currently in use with United States SOF units. This indicates the huge demand that GMV 1.1 enjoys in the United States.
General Dynamics’ Role
Apart from being one of the world’s two nuclear-powered shipbuilders, General Dynamics boasts proven expertise in offering varies combat proven armored vehicles. Notably, the company enjoys a market-leading position in light armored vehicles (LAVs) with more than 13,000 vehicles in service around the world.
Currently, it is upgrading the Canadian Army’s fleet of LAVs to increase mobility, survivability and lethality, as well as enhance the vehicle’s surveillance suite. In this regard, General Dynamics won a contract worth $1.3 billion in 2019 from Canada for 360 combat support LAVs in eight variants.
The company also has expertise in medium-weight combat vehicles and is currently producing the British Army’s AJAX armored fighting vehicle, a next-generation, medium-weight tracked combat vehicle. This vehicle is expected to be in steady-state production through 2024.
No doubt, the aforementioned discussion indicates the pivotal role that General Dynamics plays in the armored vehicle spacein both its domestic as well as international markets.
Dramatic rise in cross-border conflicts and increasing incidences of asymmetric warfare across the globe have boosted the growth prospects of the armored vehicle market. Per Markets and Markets research firm, the global armored vehicles market size is projected to grow from $11.6 billion in 2020 to $15.4 billion by 2025, at a CAGR of 5.8% during the forecast period.
Such growth prospects are expected to benefit defense players like General Dynamics, Textron TXT and BAE Systems plc BAESY, which have proven their expertise in offering state-of-the-art combat vehicles.
General Dynamics’s stock has lost 18.5% in the past year compared with its industry’s decline of 27.2%.
General Dynamics currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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