Market Trends of Latin America Ammunition Industry
This section covers the major market trends shaping the Latin America Ammunition Market according to our research experts:
The Military Segment to Dominate the Market During the Forecast Period
The military segment of the market is expected to record the highest CAGR during the forecast period. This region has been strengthening its military front, with a strong focus on military spending, over the years, irrespective of the economic crisis and social and political unrest. Some of the major contributors to the military expenditure growth in the region are Brazil (with a military expenditure of USD 19.1 billion in 2021) and Mexico (military expenditure of USD 8.6 billion), among others. The procurements of aircraft, armored vehicles, and naval vessels by Latin American countries may generate demand for ammunition and weapon systems. Additionally, the border issues between the United States and Mexico, along with the country's ongoing war on drugs, are generating demand for ammunition from border security forces and special forces in the region.
Brazil Held Highest Shares in the Market
Brazil is expected to hold the highest share of the Latin American ammunition market. Brazil is also the largest defense spender in Latin America, which constituted more than 35% of Latin America's total military spending in 2021. Also, in 2021, Brazil's defense expenditure was USD 19.1 billion, which was the highest in Latin America. Brazil has been one of the largest ammunition exporters in Latin America over the past few years, owing to its high production levels of ammunition.
According to the United Nations COMTRADE database on international trade, in 2022, Brazil's Exports of arms and ammunition, parts, and accessories were USD 442.69 million. The country increased its arms exports from USD 204 million in 2019 to USD 377 million in 2021. Additionally, in 2019, the Brazilian government relaxed the strict gun laws through a decree, in order to make it easier for Brazilians to buy guns and ammunition. According to the decree, the right to purchase cartridges per year was increased from 50 to 5,000 and to 1,000 for restricted weapons, and gun owners can keep up to four guns in their homes or offices. This step was taken to open up the Brazilian market to firearms and ammunition manufactured outside the country and increase civilian self-defense capability. The relaxation in gun laws lead to the growth in the number of legal firearms sold, by 65% in 2021. With such initiatives, the country is expected to support the local players, like IMBEL and CMC, and international players to get a significant share of the market during the forecast period.
