The Submarine Market is expected to register a CAGR of over 4% during the forecast period.
- The growing emphasis of many countries toward modernizing their naval defense units, like submarines, surface-mine countermeasure, unmanned underwater vehicles, and other combat and tactical UUVs, is expected to drive the submarine market in the years to come.
- The increasing maritime threats, like sea-based terrorism and other illegal activities, pose a challenge to the militaries. In order to counter these, submarines are used for surveillance and under-sea attack purposes.
- Growing emphasis on the indigenous production of advanced submarines by various countries is opening new avenues for the market.
Key Market Trends
SSN Segment is Expected to Register the Highest CAGR During the Forecast Period
Currently, the SSN segment has the highest market share out of all the segments. The advantages offered by these submarines compared to the other types, like being faster, more efficient, and having longer endurance capabilities are the main reason behind the militaries going for these submarines. In addition, SSN submarines do not have to dive to surface periodically for air, which preserves their stealth attribute. Due to these advantages and their better warfare capabilities, the SSN segment is also projected to register the highest CAGR during the forecast period.
North America is Expected to Dominate the Market During the Forecast Period
In 2018, North America dominated the submarine market. Factors, like the high military spending of the United States and the aggressive procurement of submarines, coupled with the increased focus on unmanned underwater vehicles, are the main drivers for the high share of the region. Additionally, the revenues from North America are projected to register the highest CAGR during the forecast period. Development of advanced submarines and the focus of the United States on procuring next-generation submarines are the main reasons for the high anticipated growth of the market in the region. Moreover, increasing focus on the Virginia-class submarines that are being built by the US, may contribute to the strong growth of the market in the region in the years to come.
Huntington Ingalls Industries, BAE Systems plc, Daewoo Shipbuilding & Marine Engineering, General Dynamics Corporation, and Hyundai Heavy Industries are some of the prominent players in the market. Players in the market are trying to make use of the technological advancements to develop and launch new generation submarines, thereby attracting a larger range of customers. Countries in Asia-Pacific are investing huge amounts for procuring new submarines. Players can shift their focus on these countries from countries, like the US, which have already made long term contracts with the existing players. Acquisitions of other players can also help the existing players gain a huge market share. In January 2019, Hyundai Heavy Industries Group signed a deal to consolidate two of South Korea's biggest shipbuilders, thereby helping Hyundai Heavy Industries Group to increase its market revenues.
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