Market Trends of Artillery Systems Industry
Increasing Defense Expenditure Supporting the Growth of the Artillery Systems Market
- On account of the profound changes in the international strategic landscape, the configuration of the international security system has been undermined by the growing hegemonism, unilateralism, and power politics that have fueled several ongoing global conflicts. Uncertainties in territorial rights between many countries, like the Saudi-Iran cold war in the Middle East, are among the major causes disturbing the geopolitical climate.
- The most common reaction of governments, in this regard, is to increase military spending to improve security in their respective countries. Military powerhouses, such as the United States, the United Kingdom, China, and India, have been focused on augmenting their military firepower and warfare capabilities. To ensure combat readiness of existing defense systems, development and procurement programs are currently underway to modernize the weapon systems used by the armed forces. A simultaneous push for indigenization is also driving several countries' local development of such systems. The increase in defense budgets currently supports these programs.
- The invasion of Ukraine had an immediate impact on military spending decisions in Central and Western Europe. This included multi-year plans to boost spending from several governments. World military spending grew for the eighth consecutive year in 2022 to an all-time high of USD 2240 billion. By far, the sharpest rise in spending (+13 percent) was seen in Europe and was largely accounted for by Russian and Ukrainian spending. However, military aid to Ukraine and concerns about a heightened threat from Russia strongly influenced many other states' spending decisions, as did tensions in East Asia.
- The United States remains by far the world's biggest military spender. US military spending reached USD 877 billion in 2022, which was 39 percent of total global military spending and three times more than the amount spent by China, the world's second-largest spender.
- Countries' significant investments to modernize their military may support the artillery systems market growth during the forecast period. Countries are focused on developing long-range fire capabilities to achieve a tactical advantage on the battlefield. To develop long-range precision fire capabilities, countries like the United States are initiating the procurement of artillery systems.
- For instance, in December 2022, Lithuania's Defense Ministry signed a contract with the French group Nexter for the purchase of 18 Caesar artillery guns.
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Asia-Pacific is Expected to Witness the Highest CAGR During the forecast period
- Asia-Pacific is expected to register a high CAGR during the forecast period. The escalated tensions between the countries in this region have encouraged the rapid modernization of the armed forces. Countries like China, India, Australia, Japan, and South Korea are significantly investing in the development, building, and procurement of artillery systems.
- For instance, in November 2022, Kalyani Strategic Systems Limited (India) signed a deal to export 155mm artillery guns to a friendly nation in a non-conflict zone. The deal is worth USD 155 million, and the arms are to be exported by 2025. The Kalyani Group is also reported to establish the world's largest artillery factory in India. In May 2023, The People's Liberation Army-Strategic Support Force (PLA-SSF) of China gave a contract to PLA-SSF Northwest Institute of Nuclear Technology (NINT) to produce 203-millimeter artillery guns.
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