Precision Guided Artillery Ammunition Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

Precision Guided Artillery Ammunition Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

The Precision Guided Artillery Ammunition Market size is estimated at USD 2.05 billion in 2024, and is expected to reach USD 2.43 billion by 2029, at a CAGR of 3.46% during the forecast period (2024-2029).

Precision-guided artillery ammunition represents a significant advancement in military technology. It allows for precise target engagement and a marked reduction in collateral damage. As warfare evolves, the emphasis on precision and the need to minimize civilian harm have become paramount, driving the demand for this advanced ammunition.

Technological advancements, escalating defense budgets, and the imperative to upgrade military equipment are key market drivers. Countries worldwide are modernizing their armed forces and ramping up defense spending to secure a technological edge in warfare. Simultaneously, the industry is buoyed by innovations in artillery ammunition technologies, bolstering their reliability and effectiveness in diverse combat scenarios. The market is poised for growth in the coming years, fueled by government initiatives to develop and manufacture guided ammunition and missiles domestically, thereby reducing reliance on foreign technologies.

Regulatory challenges constrain market growth, especially concerning international arms treaties and export controls. The complexities of developing and transferring advanced military technologies frequently lead to elevated costs and extended development timelines. Additionally, the steep price of precision-guided munitions, in contrast to traditional unguided artillery, may dissuade certain nations, especially those with constrained defense budgets.

Precision Guided Artillery Ammunition Market Trends

Large Caliber Segment to Dominate the Market during the Forecasted Period

Countries are increasingly adopting large-caliber guided munitions due to their ability to execute precise strikes over extended distances, a necessity in modern strategic operations. Their effectiveness in breaching fortified structures and neutralizing high-value targets from afar has made them indispensable in state-level conflicts. Recognizing this importance, nations are hastening their procurement cycles to enhance long-range offensive capabilities in light of global security challenges. Market dynamics are significantly swayed by these munitions' deployment and export regulations, which are influenced by international arms control agreements.

While geopolitical tensions and the pursuit of advanced defense capabilities drive nations to invest in these powerful munitions, they remain steadfast in adhering to international standards. The strategic importance of large-caliber munitions in national defense underscores their central role in global military strategies. Nations and defense contractors are forging strategic alliances and partnerships, which are instrumental in the evolution and adoption of large-caliber guided munitions. These collaborations frequently focus on technology sharing and joint development, customizing munitions to address specific strategic needs. For instance, European multinational defense partnerships are at the forefront, developing next-generation large-caliber systems incorporating advanced targeting technologies and a modular design suitable for various military platforms.

Recent advancements in guidance technologies for the large-caliber segment include enhanced GPS, inertial navigation systems, and terminal guidance mechanisms. These improvements increase accuracy and reduce susceptibility to jamming and countermeasures. Additionally, the integration of machine learning algorithms for trajectory adjustments and target identification boosts the munitions' effectiveness and reliability in complex combat situations.

National defense budgets increasingly prioritize large-caliber precision-guided munitions, particularly for strategic deterrence. A notable example is the US Department of Defense (DoD), which focuses on upgrading its long-range strike capabilities and significantly investing in large-caliber munitions. These investments aim to develop munitions that guarantee high-precision strikes over long distances, a fundamental element in maintaining military dominance.

North America to Dominate Market Share During the Forecast Period

North America is projected to show the highest growth during the forecast period. Driven by its dominant defense spending, the US is ramping up its procurement of advanced ammunition and reinforcing its defense capabilities. The ongoing Russia-Ukraine conflict, NATO's tensions with Russia, and rising security threats have intensified the US's investments in sophisticated weaponry and munitions.

According to the Stockholm International Peace Research Institute (SIPRI), the US is the world's foremost defense spender, allocating a budget of USD 916 billion for 2023. For FY2024, in line with the National Defense Strategy, the US Department of Defense has requested a budget of USD 30.6 billion for ammunition, marking a USD 5.8 billion increase from the previous fiscal year. The allocation details include USD 5.6 billion for ammunition, USD 17.3 billion for tactical missiles, USD 7.3 billion for strategic missiles, and USD 0.6 billion for technology development. Given the heightened usage of ammunition, there's been a concerted effort to procure more, addressing the defense forces' demand-supply gap. A case in point: in April 2023, Global Ordnance's military division secured a USD 431 million contract with the US Army for ammunition supply, with an expected completion date of January 2024. Factors such as these drive the market growth in the region.

Precision Guided Artillery Ammunition Industry Overview

The precision-guided artillery ammunition market exhibits a consolidated structure, with several players commanding notable market shares. Key players include General Dynamics Corporation, Rheinmetall AG, BAE Systems plc, THALES, and Saab AB.

Market leaders prioritize developing cutting-edge artillery ammunition systems for global defense personnel. Increased investment in R&D for these advanced systems is poised to unlock greater opportunities soon. For instance, In September 2023, General Dynamics Ordnance and Tactical Systems clinched a USD 218 million contract from the US Army to boost the production of 155mm M1128 artillery shells. This task order falls under a larger USD 974 million multiyear contract focused on bolstering artillery capabilities. Additionally, manufacturers are adopting technologies such as extended-range cannon artillery platforms, bolstering the growth of the precision-guided artillery ammunition market in the coming years.

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