The close-in weapon systems market is poised to register a CAGR of more than 8% during 2020 - 2025.
- The growing instances of asymmetric warfare and the emphasis on developing advanced warfare systems are the main drivers for the market. However, the design and operational issues regarding the use of automated weaponry, such as remote weapon stations (RWS) and CIWS, may challenge the industry in the short term.
- However, the market is marred by frequent installation and operational challenges associated with autonomous weapon systems, such as the inherent vulnerability to magnetic fields, radio signals, and other electronic attacks.
Key Market Trends
Growing Emphasis on Developing Advanced Combat Systems
During the last decade, many countries developed and fielded their autonomous weapon systems to bolster their military capabilities and strengthen their troops in several conflicts around the world. The proliferation of innovations in the field of sensor technologies, weapon firing systems, and other auxiliary systems is aimed at enhancing the accuracy and performance capabilities of the current generation of CIWS. The emphasis on increasing the autonomy of the weapon systems gave rise to unmanned weapon technologies, such as RWS and CIWS, which can effectively neutralize a target without human intervention. The new variants of CIWS feature advanced optronics that render them exceptionally suitable for urban warfare, thereby helping in reducing the casualties during a war. The increasing induction of armored vehicles equipped with RWS and CIWSsystems for protection against incoming projectiles is driving the demand for such systems. Furthermore, the emergence of sophisticated missiles is driving the defense manufacturers to develop new variants of CIWSto effectively counter the incoming hostile projectile before the impact.
North America Expected to Dominate the Market During the Forecast Period
The United States and Canada are avid users of CIWS in North America. They are currently focusing on upgrading their existing vehicle fleet and their corresponding capabilities. The United States’ FY2020 defense budget prioritizes modernization of military systems to compete with China and Russia on the global front, while emphasizing on day-to-day operations for ongoing conflicts, crisis response, and allied engagement. As per the provisions of the 2020 defense budget, the defense contractors are anticipated to pursue production of the existing CIWS, while conducting extensive R&D for future systems. In September 2018, Raytheon Technologies Corporation was awarded a USD 482 million contract, spanning over six years, to update the MK 15 CIWS deployed by the US Army and the US Navy. Additionally, in January 2018, Raytheon received a USD 570 million contract from the Canadian government, for maintenance and upgrade of 21 units of Phalanx Close-in Weapon Systems installed on the naval fleet. The provisions of the contract include engineering services, project management, support, and disposal services, as well as the procurement of spares and test equipment till 2037. Several procurement and upgrade programs are anticipated to be initiated in the upcoming period, which are envisioned to enhance the business prospects of the North American segment of the market during the forecast period.
The close-in weapon systems market is moderately consolidated, with major players such as Raytheon Technologies Corporation, Leonardo SpA, BAE Systems PLC, Rheinmetall AG, ASELSAN AS, and Thales Group, dominating the market. The growing demand for CIWSis fostering R&D for new optronics and sensor subsystems. Meanwhile, companies are trying to expand their geographical presence in emerging markets, such as Asia-Pacific. In August 2019, ASELSAN AS’ Gokdeniz CIWS was delivered to an undisclosed country in the region. The Gokdeniz CIWS is effective against helicopters, fighters, unmanned aerial systems (UAS), and asymmetric surface naval threats. Also, in January 2018, the Indian Ministry of Defence (MoD) issued a tender worth more than USD 1.5 billion to acquire 61 units of CIWSfrom domestic manufacturers, under the Make in India program. Under the program, the Indian companies will have to collaborate with the foreign manufacturers to build the weapon systems under the 'buy and make' clause of the defense acquisition procedure.
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