The weapons and ammunition market is expected to exhibit a growth rate of more than 3.5% during the forecast period (2020-2025).
- The global military expenditure in 2019 was around USD 1.97 trillion representing a YoY growth of 3.6% and around 2.2% of the global GDP. An increase in defense spending is an indicator of the procurement of new weaponry and associated ammunition, signifying dispersion of new contracts by the global armed forces.
- The increase in terrorism and other insurgent activities on a global level has encouraged defense agencies of several nations to intensify their countermeasure capabilities against a variety of threats. Countries such as the US, Russia, China, and India have been increasing the number of troops deployed across their national borders as well as borders of their respective allies. The increased deployment of troops has led to the rapid procurement of weapons to ensure their safety.
Key Market Trends
High Demand for Newer Generation Portable Explosive Weapon Systems
The evolution of the battlefield environment has necessitated the subsequent upgrade and customization of armament. Currently, the US Army is focusing on improving the short-range air-defense capabilities of brigade combat teams. The emergence of unmanned aerial systems (UASs), cruise missiles, and long-range rockets (LRRs) pose a threat to ground infantry troops. Hence, the US Army has prioritized Short-Range Air Defense (SHORAD) and has started reactivating units back to this core competency. In May 2018, Russian manufacturer KBP Instrument Design Bureau showcased its latest generation of the 9K333 Verba man-portable surface-to-air missile system, which can effectively engage an approaching or receding aircraft, helicopter, cruise missile, or UAV. The new generation 9M336 missile is claimed to be twice as efficient as its predecessor beyond a range of 1.86 miles. The system can detect targets through various systems, including the tripod-mounted 1L122 lightweight surveillance radar or the 9S932-1 mobile radar system, generally mounted on the tracked Armored Command and Reconnaissance Vehicle of the Russian Army. In addition to upgrading the M72 shoulder-fired rocket launcher to reduce its overall weight and develop a variety of warheads, the US Army and the US Marine Corps intend to adopt the weapon primarily as a lightweight anti-tank weapon. The US government also plans to introduce a new and sophisticated ground-based air defense system to replace the existing short-range RBS-70 missile system. This short-range, man-portable system is expected to be introduced by 2020 and is likely to be supplemented by an advanced tactical and medium-range, surface-to-air missile system by mid-2020. The need for high-precision, lightweight, and compact weapon systems has led innovators to invest considerable resources in the development of sophisticated weapon systems. The evolution of technology has led to the development of guided weapons with a high target hit ratio, which are supported through a range of accessories such as weapon sights, night vision devices, aiming lasers, laser rangefinders, and fire control systems. Such developments are expected to drive the portable explosives segment of the weapons and ammunition market during the forecast period.
North America to Continue its Dominance in the Upcoming Period
In North America, the US has been the pioneer of light weaponry and has positioned itself at the apex of military dominance through a steady growth rate in the procurement of advanced weapon systems. The changing nature of warfare is one of the prime reasons for the US DoD's increased spending on equipping its armed forces with better weapons. Weapons are subjected to extensive testing to ensure reliable operations and to estimate the level of performance enhancement with a new integrated design change. In October 2018, the US Army concluded its qualification testing for a new proximity fuse, which is designed as an enhancement to Raytheon Corporation's Stinger missiles. The fuse-integrated missile achieved a perfect score against a variety of targets, which amplifies its lethality through proximal detonation while maintaining its hit-to-kill capability. The US Army plans to integrate its Stinger inventory with the new proximity fuse by issuing an Urgent Material Release contract as part of its Service Life Extension Program scheduled to be conducted at its ammo plant in McAlester, Oklahoma. Furthermore, the US Special Operations Command (SOCOM) and the US Marine Corps plan to develop an HMG that can replace the M2 Browning .50 caliber machine gun. In May 2017, the SOCOM posted a notice on FedBizOpps, the US government’s main contracting website, as part of its market research to gather information from the companies that can build .338 Norma Magnum ammunition-based HMGs. The notice even listed out the specifications for the HMG-belt-fed, with a 24-inch barrel, not weighing more than 24 lbs and able to fire around 500 to 600 rounds per minute with a precision range of 2,000 yards. Such developments are envisioned to drive weapon development programs and encourage the adoption of sophisticated weaponry by the armed forces in the future.
The weapons and ammunition market is fragmented on a global level but at a regional level, only selected vendors manufacture and supply weapons and ammunition due to the high technological expertise required to produce military-grade weapons. However, global players like BAE Systems plc, General Dynamics Corporation, MBDA, Raytheon Technologies Corporation, and Kalashnikov Concern JSC (Rostec State Corporation) dominate a significant share of the market. Multi-featured systems or dual-capability weapons have emerged in the last decade, significantly enhancing the lethality of shoulder-fired weapons. For instance, next-generation light anti-tank weapons (NLAWs) are the most recent shoulder-launched, overfly top attack (OTA), anti-tank missile systems, and they act as true tank killers for light forces and are capable of operating in all kind of environments including built-up areas. The Predicted Line of Sight (PLOS) guidance system and selectable OTA provides accuracy, easy handling, and high kill probability to the weapons. Moreover, it provides effective armor penetration against an MBT equipped with explosive reactive armor (ERA). The Magneto Hydrodynamic Explosive Munition (MAHEM) is currently being developed by the Defense Advanced Research Projects Industry (DARPA). MAHEM uses a magnetic flux generation system to fire a projectile compared to conventional explosive chemical energy used for making Explosively Formed Jets and Self Forging Penetrators. MAHEM is capable of producing high projectile velocity and range and uses molten metal to penetrate armored vehicles.
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