Latin America Defense Market Size
| Study Period | 2019 - 2029 |
| Base Year For Estimation | 2023 |
| Market Size (2024) | USD 1.38 Billion |
| Market Size (2029) | USD 1.78 Billion |
| CAGR (2024 - 2029) | 5.30 % |
| Market Concentration | Low |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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Latin America Defense Market Analysis
The Latin America Defense Market size is estimated at USD 1.38 billion in 2024, and is expected to reach USD 1.78 billion by 2029, growing at a CAGR of 5.30% during the forecast period (2024-2029).
Despite the region's sluggish economy, Latin American countries prioritize modernizing their military equipment to bolster their defense capabilities. Heightened by longstanding border disputes and concerns over illegal weapons and drug trafficking, these nations are channeling increased funds into border security.
Geopolitical tensions stemming from territorial disputes, historical rivalries, and resource competition have long been instrumental in shaping the Latin American defense landscape. Nations are compelled to enhance their military prowess due to these challenges.
Another key driver for the Latin American defense market is the push for military modernization driven by rapid technological advancements. With technology evolving at an unprecedented pace, defense entities must innovate to maintain their strategic advantage. In the subsequent sections, the report will explore how technological advancements reshape the defense market, supported by specific examples.
While Latin American nations predominantly source missile systems, firearms, and other defense equipment from domestic suppliers, they also heavily rely on imports for aircraft, armored vehicles, and submarines, often from nations like the United States, Germany, and France.
Delays in production cycles can occur due to prolonged shortages of critical components from primary suppliers. The specialized materials needed for defense systems must also meet stringent quality benchmarks. Consequently, suppliers hold significant leverage over component manufacturers, and disagreements over pricing could lead to supply disruptions. These scenarios are anticipated to widen the supply-demand gap, driving up production costs due to raw material scarcity and price fluctuations.
Latin America Defense Market Trends
The Vehicles Segment to Experience the Highest Growth During the Forecast Period
Latin American countries, including Chile, Colombia, and Brazil, are ramping up their defense capabilities, with a particular focus on their naval and land forces. Colombia, for instance, aims to bolster its navy, planning to increase its frigate fleet from the current four to six by 2025, with a further two frigates slated for 2030. Meanwhile, Brazil, Paraguay, and Peru are eyeing replacements for their aging armored vehicle fleets. The production of these vehicles is a cornerstone of the region's defense industry, providing essential mobility, protection, and firepower for ground forces.
In September 2023, the Brazilian government unveiled a dedicated fund under the Growth Acceleration Program (PAC) to enhance its army's capabilities. This initiative includes acquiring armored vehicles from Italian manufacturer Iveco Defence and the Astros missile system from Avibras, among other investments. The government has earmarked approximately BRL 53 billion (USD 11 billion) for defense, with a notable portion allocated to a strategic armored forces program.
Building on this momentum, Brazil is now in talks to procure advanced Centauro II 8x8 armored vehicles, with a contract expected to be finalized in July 2024. This decision follows a successful evaluation phase, showcasing Brazil's confidence in this cutting-edge technology. These vehicles are projected to undergo rigorous electromagnetic compatibility testing in Italy before deployment, ensuring seamless integration into Brazil's armed forces.
Brazil to Dominate Market Share During the Forecast Period
Brazil dominates the Latin American defense market, boasting the region's highest market share. As the largest defense spender in Latin America, Brazil has consistently contributed over 40% of the region's military expenditures. France, the United States, and the United Kingdom stand out as Brazil's primary arms suppliers, focusing on aircraft, armored vehicles, ships, missiles, and sensors. Brazil's military personnel numbers are robust, with 81,000 in the air force, 235,000 in the army, 80,500 in the navy, 400,000 in paramilitary forces, and 1,340,000 in the reserve force. As of December 2022, Brazil had approximately 360,000 active military personnel. Renowned for their capabilities, the country's armed forces are actively pursuing power-projection enhancements, particularly in the Amazon and coastal regions, alongside a drive to modernize their defense industry and platforms, including large-caliber weapons.
The Brazilian Army lacks wheeled self-propelled howitzers. In August 2023, the country initiated a procurement process for a 155 mm self-propelled wheeled artillery system to address this gap, aiming to replace its existing M114A1 howitzers. The envisioned artillery system features a 52-caliber NATO standard cannon, 12.7 mm or 7.62 mm machine gun provisions, and roof-mounted 76 mm smoke grenade launchers. Crucially, the system is designed to handle a range of ammunition, from conventional to precision, emphasizing the long-range capabilities of the wheeled artillery system. This strategic procurement, alongside Brazil's broader military platform upgrades, presents a significant growth opportunity for ammunition manufacturers in the country.
Latin America Defense Industry Overview
The Latin American defense market is fragmented. Key players include Embraer SA, The Boeing Company, Safran, THALES, and Northrop Grumman Corporation. While the region boasts numerous local players, many are state-owned, catering exclusively to their domestic armed and security forces. Notable among these are Compañía Anonima Venezolana de Industrias Militares (CAVIM) in Venezuela, Fábrica de Armas y Municiones del Ejército (FAME) in Peru, Fábricas y Maestranzas del Ejército (FAMAE) in Chile, and INDUMIL in Colombia.
Despite the strong local presence, international players, especially from the United States, Germany, and France, hold a significant stake in the market through defense equipment imports. Moreover, companies are actively innovating to expand their market share. For example, in 2022, Shield AI inked a deal with VSK Tactical, supplying Brazil with V-BAT 128 UAVs. These UAVs, equipped with advanced EO/MWIR cameras, offer the Brazilian Army and Navy long-range imaging, image stabilization, and high-speed thermal capabilities, showcased through demonstrations on both land and sea.
Latin America Defense Market Leaders
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The Boeing Company
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Embraer S.A.
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THALES
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Safran
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Northrop Grumman Corporation
*Disclaimer: Major Players sorted in no particular order
Latin America Defense Market News
October 2023: Brazil initiated the refurbishment of its M109A3 self-propelled howitzers as part of the 'Field Artillery System' (SPrg SAC) subprogram. The goal is to enhance operability and prolong the M109A3's life cycle by replacing key structural components and equipment.
January 2022: Elbit Systems' Brazilian subsidiary, AEL Sistemas SA, secured a contract from the Brazilian Air Force for an additional Hermes 900 UAV. The agreement spanned 16 months, during which AEL was expected to deliver the UAVs and accompanying spare parts. Over the last decade, the Brazilian Air Force utilized a combination of Elbit Systems' Hermes 900 and Hermes 450 UAVs for various missions. The newly contracted Hermes 900 was projected to feature Elbit Systems' DCompass and Skeye electro-optical payloads, a frontal panoramic thermal camera, and a directional antenna tailored for line-of-sight datalink control.
Latin America Defense Market Report - Table of Contents
1. INTRODUCTION
- 1.1 Study Assumptions
- 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
- 4.4 PESTLE Analysis
5. DEFENSE SPENDING ANALYSIS OF LATIN AMERICAN COUNTRIES
6. MARKET SEGMENTATION
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6.1 Procurement
- 6.1.1 Personnel Training and Protection
- 6.1.2 Communication Systems
- 6.1.3 Weapons and Ammunition
- 6.1.4 Vehicles
- 6.1.4.1 Land-based Vehicles
- 6.1.4.2 Sea-based Vehicles
- 6.1.4.3 Air-based Vehicles
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6.2 MRO
- 6.2.1 Communication Systems
- 6.2.2 Weapons and Ammunition
- 6.2.3 Vehicles
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6.3 Geography
- 6.3.1 Brazil
- 6.3.2 Colombia
- 6.3.3 Mexico
- 6.3.4 Chile
- 6.3.5 Rest of Latin America
7. COMPETITIVE LANDSCAPE
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7.1 Company Profiles
- 7.1.1 Embraer SA
- 7.1.2 THALES
- 7.1.3 Iveco Limited
- 7.1.4 Saab AB
- 7.1.5 The Boeing Company
- 7.1.6 Northrop Grumman Corporation
- 7.1.7 Lockheed Martin Corporation
- 7.1.8 Avibras Indústria Aeroespacial S/A
- 7.1.9 CBC Global Ammunition
- 7.1.10 Textron Inc.
- 7.1.11 Safran
- 7.1.12 General Electric Company
- *List Not Exhaustive
8. MARKET OPPORTUNITIES AND FUTURE TRENDS
** Subject To AvailablityLatin America Defense Industry Segmentation
The study covers all aspects and provides insights into the budget allocation and spending in the Latin American defense market, along with the forecast estimates. The market includes details about the procurement and modernization plans of the Latin American countries' defense forces, including land tactical vehicles, naval vessels, unmanned systems, communication systems, and military equipment like weapon systems, missile defense systems, missiles, and ammunition. The study also delves into the overall defense landscape, focusing on specific products and equipment across Latin America.
The Latin American defense market is segmented by procurement, MRO, and geography. By procurement, the market is segmented into personnel training and protection, communication systems, weapons and ammunition, and vehicles. By MRO, the market is segmented into communication systems, weapons and ammunition, and vehicles. The report covers the market sizes and forecasts for the defense market in major countries across the region. For each segment, the market sizes and forecasts are provided in terms of value (USD).
| Procurement | Personnel Training and Protection | |
| Communication Systems | ||
| Weapons and Ammunition | ||
| Vehicles | Land-based Vehicles | |
| Sea-based Vehicles | ||
| Air-based Vehicles | ||
| MRO | Communication Systems | |
| Weapons and Ammunition | ||
| Vehicles | ||
| Geography | Brazil | |
| Colombia | ||
| Mexico | ||
| Chile | ||
| Rest of Latin America |
Latin America Defense Market Research FAQs
How big is the Latin America Defense Market?
The Latin America Defense Market size is expected to reach USD 1.38 billion in 2024 and grow at a CAGR of 5.30% to reach USD 1.78 billion by 2029.
What is the current Latin America Defense Market size?
In 2024, the Latin America Defense Market size is expected to reach USD 1.38 billion.
Who are the key players in Latin America Defense Market?
The Boeing Company, Embraer S.A., THALES, Safran and Northrop Grumman Corporation are the major companies operating in the Latin America Defense Market.
What years does this Latin America Defense Market cover, and what was the market size in 2023?
In 2023, the Latin America Defense Market size was estimated at USD 1.31 billion. The report covers the Latin America Defense Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the Latin America Defense Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
Defense in Latin America Industry Report
Statistics for the 2024 Defense in Latin America market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Defense in Latin America analysis includes a market forecast outlook 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
