The North America ammunition market is anticipated to register a CAGR of over 4% during the forecast period.
- The rapid growth in military spending with the increase in procurement of advanced land, sea, and air vehicles and development in technologically advanced systems is driving the market during the forecast period.
- Also, the increasing investments in R&D for military modernization plans for the procurement of the latest equipment to replace its existing ammunition assets is one of the major factors driving the market.
Key Market Trends
Military Segment to Dominate the Market
The military segment currently dominates the market, and it is expected to continue its domination, in terms of market share, over the forecast period. This can be attributed mainly due to the increase in the procurement of ammunition by the armed forces, local enforcement agencies, and border security forces to subdue the threats arising due to terrorism, territorial conflicts, and geopolitical tensions. The countries in this region are procuring the ammunition systems to protect their borders, which is generating demand for the market. For instance, in March 2020, the US Army purchased additional advanced BONUS munitions manufactured by BAE Systems plc and Nexter Group. BONUS is a 155-millimeter munition designed for destroying armored targets and will be employed by the Army’s fleet of M109 self-propelled howitzers and M777 ultra-lightweight towed howitzers. The US Army had purchased BONUS through the NATO Support and Procurement Agency (NSPA), which provides effective and cost-efficient multinational solutions to the Alliance. Additionally, in March 2020, BAE Systems plc was awarded a contract of USD 339 million by the US Army for the modification of production of 48 vehicle sets of M109A7 Self-propelled Howitzer (SPH) and its companion, the M992A3 Carrier, Ammunition, Tracked (CAT) vehicle and includes post-delivery support and spare parts. The program offers enhanced indirect-fire artillery capabilities to the Army’s Armored Brigade Combat Teams (ABCTs) with new technologies for power generation and survivability. The procurement of such vehicles is expected to bolster the demand for associated ammunition for the integrated weapon systems.
Increased Procurement is Driving the US' Market Share
The ammunition market in the US is expected to continue its growth at a constant rate during the forecast period primarily due to massive military spending from this region. Also, newer technological developments are being carried out by the US Army to re-supply pinned down troops with ammunition, during a firefight. The US Army currently is making use of GPS guided mortar shells, known as Ammunition Resupply Projectile (ARP), which possesses the capability of resupplying 5.56 mm rounds to the troops during a firefight, by making use of parasails during the landing process. The advancements in technology in ammunitions are driving the market in the US. For instance, in November 2019, BAE Systems plc was awarded research and development funding by the US Army to create an advanced radar jamming technology that will improve air survivability and mission effectiveness for U.S. Army rotary-wing aircraft and unmanned aerial systems. Additionally, in December 2019, BAE Systems plc received a contract of USD 249 Million from the US Army for the modification of 60 M109A7 self-propelled howitzers that will bring improved artillery capabilities to the Army’s ABCTs. Such developments are anticipated to drive the North America ammunition market during the forecast period.
The prominent players of the North America Ammunition market are BAE Systems plc, General Dynamics Corporation, Northrop Grumman Corporation, Rheinmetall AG, and Nexter group KNDS. The increasing need for arms and ammunition is allowing strengthening their local and government-owned ammunition companies. The companies are currently focusing on the design and manufacture of more lethal ammunition to increase their market share. Rheinmetall AG is one of the major players in the market that is providing artillery ammunition through multiple joint ventures in various regions. For instance, in June 2019, the UK Competition and Markets Authority (CMA), approved the military vehicle joint venture between Rheinmetall Defense and BAE Systems plc. Also, in September 2019, BAE Systems plc and Marshall Aerospace and Defense Group have signed an agreement to collaborate on advanced technologies for various next-generation air platforms. Additionally, in March 2020, Rheinmetall AG (NIOA) munitions announced that it is set to produce and export medium-caliber ammunition for US Joint Strike Fighter (JSF) program. Countries in this region are supporting local manufacturing companies to facilitate the need of their respective armed forces and law enforcement agencies, thereby helping the local companies to have a significant share in the market studied.
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