The Europe Medium and Large Caliber Ammunition Market is anticipated to register a CAGR of over 1% during the forecast period.
Key Highlights
- The increased defense spending on weapon systems by European countries is driving the growth of the market. Militaries in Europe are making investments in weapons such as field artillery, RWS, mortars, naval guns, aircraft cannons., etc. to strengthen the lethality of the armed forces. These weapons also act as a cost-effective firepower support option over costly missiles and rockets during close combat operations. Due to this, the demand for medium and large-caliber ammunition is expected to rise in the region during the forecast period.
- Countries are developing technologically advanced medium and large-caliber ammunition, such as high-speed projectile firing, laser guidance systems, and precision targeting technology, which is driving the market growth for GPS enabled smart artillery and mortar shells in Europe.
Key Market Trends
Increasing Defense Spending of the European Countries Driving the Market Growth
Several countries in Europe are increasing their defense spending. According to SIPRI, while Germany’s military spending rose by 10% to reach USD 49.3 billion in 2019, Russia increased its military expenditure by 4.5% to USD 65.1 billion. Also, there were sharp increases in military expenditure among NATO member states in Central Europe like Bulgaria and Romania. However, there is no major change in the defense spending of countries like France and the UK in 2019. Nevertheless, all these countries are investing huge amounts towards developing their firepower and defense capabilities, which is driving the procurement of medium and large-caliber ammunition in the region. For instance, in April 2019, the German military had contracted Rheinmetall AG for over 32,000 rounds of 155mm artillery ammunition worth more than USD 120 million. In addition to the direct procurement of ammunition, the increasing defense budgets have facilitated several countries in procuring military aircraft, land vehicles and naval vessels, which feature weapon systems that require the procurement of ammunition, thereby driving the market during the forecast period.
United Kingdom held the Largest Market Share in 2019
The United Kingdom is one of the top ten defense spenders in the world. According to SIPRI, the United Kingdom has spent as much as USD 48.7 billion on its defense, which is around 1.7% of the country’s GDP. The country’s high spending has facilitated the procurement of several aircraft, land vehicles, and ships, whose weapon systems have necessitated the procurements of medium and large-caliber ammunition on a large scale. Over the last two years, the country has ordered various military aircraft, land vehicles, and ships. These include 17 F-35 aircraft, 50 Apache attack helicopters, more than 30 frigates, among others, all of which will possess weapon systems that generate demand for medium and large-caliber ammunition. The country is procuring ammunition on a large scale for its armed forces. BAE Systems, a prominent manufacturer based in the UK, plays a major role in catering to the demands of medium and large-caliber ammunition of the UK military. For instance, in January 2019, BAE Systems' Land UK business won a contract to supply 155mm Smoke and Illuminating artillery rounds to the UK Ministry of Defence. The contract was initially valued at around USD 18 million with options for the UK to add additional quantities in the coming years. Such developments are expected to propel the growth of the market in the country during the forecast period.
Competitive Landscape
Some of the prominent players in Europe Medium and Large Caliber Ammunition Market are General Dynamics Corporation, BAE Systems PLC, Rheinmetall AG, Northrop Grumman Corporation, Nexter Group KNDS, among others. Europe has some of the largest ammunition manufacturers in the world, that are well known globally for their brand value, reliability, and quality. However, several countries in the region have developed their local ammunition manufacturing, resulting in the advent of local players who are equally strong, providing smaller sub-systems of a larger network/projects in partnership with the global leaders. Over the years, the local players have mastered technology and product design, and they are offering similar quality ammunition at a relatively cheaper price, thereby posing threat to the growth of the established players in Europe, who have been demanding monopoly style prices for their products and services. This is expected to further intensify the competition in the market during the forecast period.
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