Market Trends of Land-based Smart Weapons Industry
Ammunitions and Other Products Segment is Expected to Witness Highest Growth
With the changing nature of modern warfare, there has been an increase in smart weapons and ammunition development and procurement. Moreover, the rising cross-border conflicts and pressure to reduce civilian casualties are anticipated to increase precision-guided munitions. The demand for this segment is driven by rising defense expenditures by various global powers annually, as governments worldwide are putting significant resources toward bolstering their defense capabilities. For instance, in 2022, the global military expenditure reached USD 2,240 billion, a growth of 6% from 2021.
Unguided mortars have been used for decades by various countries against personnel, light armored vehicles, and structures. Conventional mortar systems typically require two or more rounds to be fired to stabilize the firing platform and make corrections for weather effects. This has necessitated the shift toward guided mortars that provide increased firing accuracy and reduced ammunition consumption. Their increased accuracy gives them greater utility as an anti-tank weapon, with the more accurate engagement of moving targets. These advantages have made guided mortar systems more popular, and they are now in service with several militaries worldwide. Loitering munition is a weapon system category in which the munition loiters around the target area for some time, searches for targets, and attacks once a target is located.
The demand for precision-guided artillery shells has also increased in the past decade. For instance, in May 2023, the US Army awarded BAE Systems a USD 72.5 million contract to continue research and development in advancing precision-guided artillery munitions. Programmable ammunition has also gained more popularity in recent years and has resulted in several countries purchasing such ammunition. In this regard, a European NATO customer contracted with Rheinmetall to deliver 45,000 programmable cartridges in 40 mm x 53 HV HE-T ABM (High-velocity High Explosive-Tracer Airburst Munition) caliber in December 2022. The deliveries are expected in the first half of 2024. Such developments and procurement orders of advanced munitions are expected to accelerate the growth of this segment during the forecast period.
North America will Continue to Dominate the Market During the Forecast Period
The North American region is currently dominating the market and is expected to continue its dominance during the forecast period. This is primarily due to the large military expenditure of the United States, which supports the development and procurement programs for land forces. For instance, in 2022, the US military defense expenditure rose to USD 877 billion, a growth of 9% compared to 2021. The increased investments toward technologically advanced weaponry are due to the growing threat to the country from the enhanced capabilities of China and Russia on the battlefield. Therefore, the country is testing various advanced smart weapons and ammunition to counter these threats.
For instance, in April 2023, the US Army announced that it is developing XM1223 Multi-Mode Proximity Airburst (MMPA), a High Explosive Proximity (HEP) ammunition for M-SHORAD chain gun that can be programmed to take out better small-unmanned aircraft systems (UASs) and ground vehicles targets. The US Department of Defense (DoD) also plans to improve the capability and reliability of the Ground-based Midcourse Defense (GMD) system. In August 2022, the Pentagon awarded Northrop Grumman a contract for the development of the next iteration of the weapons systems program for Ground-based Midcourse Defense (GMD). In August 2023, the US Army awarded a modification contract for procuring extended Excalibur 155mm guided projectiles. Such investments into the development and procurement of smart munitions are anticipated to bolster the growth of the region at the highest growth rate during the forecast period.
