The military frigates market is anticipated to register a CAGR of over 3.5% during the forecast period.
- Development and procurement of new frigates have gained importance in the past few years, due to the increasing border issues and territorial conflicts at sea.
- The ongoing replacement programs in various countries to replace the current aging fleet of combat ships with modern detection and weapon systems equipped frigates that have anti-ship, anti-submarine, and air-defense capabilities are propelling the growth of the market.
Key Market Trends
Development of New Frigates is Expected to Drive the Growth of the Military Frigates Market
The development of new frigates is one of the key drivers in the military frigates market. With a major focus on high lethality and low detection capabilities of the frigates, the development of frigates is picking up pace over the past few years. The development of new frigates is gaining importance in the US in recent years. A new program of guided missile frigate FFG(X) is in progress and includes the construction of about 20 FFG(X) next-generation frigates by 2030. The US Navy selected five shipbuilders: Austal USA, Fincantieri SpA, General Dynamics, Huntington Ingalls Industries, and Lockheed Martin and is currently evaluating their designs. It intends to award the contract for the first frigate by 2020. Similarly, the United Kingdom is currently evaluating BAE Systems, Babcock, and Atlas Elektronik UK for design, development, and manufacturing of its new Type 31e frigate that is intended to enter service by 2020, along with the more capable Type 26 frigate. Such new programs may propel the growth of the military frigates market during the forecast period.
The Asia-Pacific Region to Experience the Highest Growth During the Forecast Period
The Asia-Pacific region is anticipated to have the highest growth during the forecast period. The escalated tensions between the countries in this region have led to countries increasing their military spending. Thus, this is boosting the growth of the market during the forecast period. The countries, like South Korea, Australia, India, China, and Indonesia, are investing in the development, building, and procurement of new frigates in this region. In late 2018, India’s Goa Shipyard Limited (GSL) signed a USD 500 million deal with Rosoboronexport of Russia to indigenously manufacture two stealth frigates with technology transfer. Similarly, under Australia’s SEA 5000 Phase 1 project (Future Frigate Project), the country signed a deal with BAE Systems worth USD 26 billion to take the delivery of nine high-end anti-submarine warfare frigates by the end of next decade. Additionally, the presence of shipbuilding companies, like Austal, China State Shipbuilding Corporation, and Hyundai Heavy Industries (HHI) is also supporting the growth of frigates in this region.
The military frigates market is fragmented with many companies taking a minor share of the market. Some of the prominent players in the market are Lockheed Martin Corporation, Austal, United Shipbuilding Corporation, Fincantieri SpA, and Naval Group. The major issue faced by the companies is of limited geographical presence. For instance, BAE Systems supports the frigate programs of the United Kingdom and Australia, Austal supports frigates in Australia and the United States, and United Shipbuilding Corporation majorly supports the programs of Russia. Due to such limited geographical presence, the market is highly fragmented with many companies taking a part of the share. The collaborations and partnerships between the players to support the frigate development programs of the naval forces may help the companies to gain a strong and leading position in the market.
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