GCC Defence Market Size
| Study Period | 2019 - 2029 |
| Base Year For Estimation | 2023 |
| Market Size (2024) | USD 29.73 Billion |
| Market Size (2029) | USD 50.19 Billion |
| CAGR (2024 - 2029) | 11.04 % |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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GCC Defense Market Analysis
The GCC Defense Market size is estimated at USD 29.73 billion in 2024, and is expected to reach USD 50.19 billion by 2029, growing at a CAGR of 11.04% during the forecast period (2024-2029).
The current geopolitical tensions among the GCC (Gulf Cooperation Council) countries have resulted in armies' need to focus on enhancing their military power. To do so, they are investing in modernizing their air, land, and sea platforms by replacing their aging military equipment with new-generation equipment and upgrading the technology onboard their existing equipment.
However, this modernization process comes with challenges, including budget constraints and a lack of skilled labor, which could slow the procurement and maintenance of new equipment. Despite these challenges, there are also several opportunities for growth in the defense market in the region. Governments in the GCC are increasingly emphasizing the development of local defense manufacturing capabilities, which could lead to partnerships with international players and the expansion of the region's portfolio of defense products.
Moreover, advancements in technology, such as artificial intelligence and autonomous systems, are creating new avenues for growth in the defense market. Adopting these technologies in defense equipment could improve efficiency, reduce costs, and enhance the overall effectiveness of military operations.
GCC Defense Market Trends
Airforce Segment to Dominate Market Share During the Forecast Period
- The air force segment is expected to experience significant growth in the GCC defense market owing to various procurement plans for replacing aging combat aircraft and new unmanned aerial vehicles. The demand for this segment is driven by the annual investment in defense, which is geared toward bolstering its military capabilities to counter emerging threats. For instance, in 2023, defense expenditures in GCC countries such as Saudi Arabia, Kuwait, Oman, and Bahrain rose by USD 90.8 billion. This was a growth of 5.2% compared to 2022, which accounted for USD 86.3 billion.
- With this increasing defense spending, several countries in the GCC are planning to procure new military aircraft to bolster their defense. For instance, in February 2024, Airbus announced that it is in talks with Saudi Arabia to procure A330 Multi-Role Tanker Transport and A400M military transport aircraft. Similarly, in February 2024, Saudi Arabia announced it is considering procuring Boeing’s F-15EX to equip its air force.
- In addition, various GCC countries have outstanding orders for new military aircraft to ensure security in the Arabian Gulf. For instance, Bahrain is set to receive the latest F-16s in 2024, with the rest slated for 2025. On this note, in March 2024, the first F-16 Block 70 Fighting Falcon aircraft was delivered to the country. The Block 70/72 variant has advanced avionics, an active electronically scanned array (AESA) radar, conformal fuel tanks, a modernized cockpit featuring new safety measures, an extended structural service life of 12,000 hours, advanced weaponry, and improved engine performance. Its ability to track and intercept drones is of particular significance, enhancing Bahrain's participation in the international coalition's efforts to maintain peace and stability. Such factors are expected to drive the demand for the segment in the region during the forecast period.
Saudi Arabia to Exhibit the Highest Market Share
- Saudi Arabia’s defense industry is a robust sector supported by substantial investment to modernize the country’s military capabilities in a geopolitically unstable region. With a strategic focus on modernizing defense capabilities, Saudi Arabia consistently allocates a significant portion of its budget to defense. The defense budget is further highlighted by Saudi’s Vision 2030 initiative, which aims to diversify the economy and increase indigenous manufacturing capabilities. For instance, according to SIPRI, Saudi Arabia's military spending in 2023 amounted to USD 75.8 billion, marking a 15% increase from 2019 and a 7% increase from 2022.
- With this rising defense spending, the nation is investing in the procurement of ammunition, cutting-edge missile defense systems, surveillance equipment, and cybersecurity solutions to counter evolving threats. For instance, in February 2024, NTGS, the manufacturer of the ALAKRAN mobile mortar system, signed a partnership agreement with ERAF Group to manufacture and integrate ALAKRAN mortar systems locally in the country. The ALAKRAN 120 mm mortar is a highly mobile, lightweight, self-propelled system designed to be mounted without reinforcement on any light utility vehicle able to carry a 1,500 kg payload.
- Similarly, in February 2024, Saudi Arabia awarded a contract to LIG Nex1 to deliver ten KM-SAM Block II medium-range air defense system batteries for USD 3.2 billion. The KM-SAM system, also known as Cheongung in Korea, is South Korea’s medium-range air defense system developed by the Agency for Defense Development (ADD) with technical assistance from the renowned Russian defense firm Almaz-Antey, known for its development of the S-300, S-400, and the latest S-500 air defense systems. In addition, in May 2023, MBDA was awarded a USD 65 million FMS contract by the US to produce the Common Anti-Air Module Missile (CAMM) for Saudi Arabia’s Multi-Mission Surface Combatants (MMSC) vessels.
- Furthermore, Saudi Arabia has signed various collaboration agreements with multiple defense OEMs to bolster the country's defense capabilities. For instance, in February 2024, Leonardo signed an MoU for aerospace and defense collaboration opportunities. This MoU also offers the parties a focus on specialized areas of collaboration in both Combat Air and Cross-Domain Integration fields, where Leonardo is active on next-generation technology initiatives and enabling demonstration projects. These areas could include uncrewed systems, integrated sensors, digital technologies, industrialization processes, and human capital development. Such developments are expected to accelerate the growth of the country's defense market during the forecast period.
GCC Defense Industry Overview
The GCC defense market is semi-consolidated, with few players occupying a significant market share. Some major players in the GCC defense market are Lockheed Martin Corporation, The Boeing Company, Airbus SE, Saudi Arabian Military Industries, and EDGE Group PJSC.
Earlier, foreign players accounted for the majority share in the market due to the countries' dependency on international players for arms and ammunition. However, over the past few years, regional players have gradually increased their share in the market. Saudi Arabia and the United Arab Emirates strongly emphasize indigenous production of defense equipment, and many foreign defense organizations are partnering with local Gulf-based organizations in the defense sector.
For instance, SAMI signed a joint venture agreement with FIGEAC AÉRO Group and the Saudi Arabian Industrial Investments Company (Dussur) to establish SAMI FIGEAC AÉRO Manufacturing LLC. The joint venture will manufacture aerostructure components and machined and processed aerospace parts with light alloy (aluminum) and hard metal (titanium) materials. Similar developments in the product portfolios of regional players are expected to intensify further during the forecast period.
GCC Defense Market Leaders
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Lockheed Martin Corporation
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The Boeing Company
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Airbus SE
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Saudi Arabian Military Industries (SAMI)
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EDGE Group PJSC
*Disclaimer: Major Players sorted in no particular order
GCC Defense Market News
- February 2024: Lockheed Martin Corporation signed an agreement with Saudi Arabian companies to manufacture components of its Terminal High Altitude Area Defense (THAAD) missile defense system. This move comes as the United States continues to conduct military operations in the Middle East.
- March 2023: Bahrain announced that it is expected to take delivery of the initial batch of the latest F-16s in 2024, followed by the remaining aircraft in 2025.
GCC Defence Market Report - Table of Contents
1. INTRODUCTION
- 1.1 Study Assumptions & Market Definition
- 1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS
- 4.1 Market Overview
- 4.2 Market Drivers
- 4.3 Market Restraints
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4.4 Porter's Five Forces Analysis
- 4.4.1 Threat of New Entrants
- 4.4.2 Bargaining Power of Buyers/Consumers
- 4.4.3 Bargaining Power of Suppliers
- 4.4.4 Threat of Substitute Products and Services
- 4.4.5 Degree of Competition
5. MARKET SEGMENTATION
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5.1 By Armed Forces
- 5.1.1 Army
- 5.1.2 Navy
- 5.1.3 Air Force
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5.2 By Type
- 5.2.1 Personnel Training and Protection
- 5.2.1.1 Training and Simulation
- 5.2.1.2 Protection Equipment
- 5.2.2 Communication Systems
- 5.2.3 Vehicles
- 5.2.3.1 Land-based Vehicles
- 5.2.3.2 Sea-based Vehicles
- 5.2.3.3 Air-based Vehicles
- 5.2.4 Weapons and Ammunition
- 5.2.4.1 Artillery and Mortar Systems
- 5.2.4.2 Infantry Weapons
- 5.2.4.3 Missiles and Missile Defense Systems
- 5.2.4.4 Ammunition
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5.3 By Geography
- 5.3.1 Saudi Arabia
- 5.3.2 United Arab Emirates
- 5.3.3 Qatar
- 5.3.4 Kuwait
- 5.3.5 Bahrain
- 5.3.6 Oman
6. COMPETITIVE LANDSCAPE
- 6.1 Vendor Market Share
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6.2 Company Profiles*
- 6.2.1 Dahra Engineering & Security Services LLC
- 6.2.2 Lockheed Martin Corporation
- 6.2.3 The Boeing Company
- 6.2.4 Elbit Systems Ltd
- 6.2.5 IAI
- 6.2.6 RTX Corporation
- 6.2.7 Rheinmetall AG
- 6.2.8 ASELSAN AS
- 6.2.9 Northrop Grumman Corporation
- 6.2.10 THALES
- 6.2.11 BAE Systems PLC
- 6.2.12 L3Harris Technologies Inc.
- 6.2.13 Airbus SE
- 6.2.14 Leonardo SpA
- 6.2.15 EDGE Group PJSC
- 6.2.16 Saudi Arabian Military Industries (SAMI)
7. MARKET OPPORTUNITIES AND FUTURE TRENDS
** Subject To AvailablityGCC Defense Industry Segmentation
The GCC defense market covers all aspects, including details about the procurement and modernization plans of the GCC armed forces.
The GCC defense market is segmented by armed forces, type, and geography. By armed forces, the market is segmented into army, navy, and air force. By type, the market is segmented into personnel training and protection, communication systems, vehicles, and weapons and ammunition. The report also offers the market size and forecasts for six countries across the region. For each segment, the market sizing and forecasts are provided based on value (USD).
| By Armed Forces | Army | |
| Navy | ||
| Air Force | ||
| By Type | Personnel Training and Protection | Training and Simulation |
| Protection Equipment | ||
| By Type | Communication Systems | |
| Vehicles | Land-based Vehicles | |
| Sea-based Vehicles | ||
| Air-based Vehicles | ||
| Weapons and Ammunition | Artillery and Mortar Systems | |
| Infantry Weapons | ||
| Missiles and Missile Defense Systems | ||
| Ammunition | ||
| By Geography | Saudi Arabia | |
| United Arab Emirates | ||
| Qatar | ||
| Kuwait | ||
| Bahrain | ||
| Oman |
GCC Defence Market Research FAQs
How big is the GCC Defense Market?
The GCC Defense Market size is expected to reach USD 29.73 billion in 2024 and grow at a CAGR of 11.04% to reach USD 50.19 billion by 2029.
What is the current GCC Defense Market size?
In 2024, the GCC Defense Market size is expected to reach USD 29.73 billion.
Who are the key players in GCC Defense Market?
Lockheed Martin Corporation, The Boeing Company, Airbus SE, Saudi Arabian Military Industries (SAMI) and EDGE Group PJSC are the major companies operating in the GCC Defense Market.
What years does this GCC Defense Market cover, and what was the market size in 2023?
In 2023, the GCC Defense Market size was estimated at USD 26.45 billion. The report covers the GCC Defense Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the GCC Defense Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
GCC Defence Industry Report
Statistics for the 2024 GCC Defence market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. GCC Defence analysis includes a market forecast outlook to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
