PRECISION GUIDED MUNITION MARKET ANALYSIS

The global precision guided munition market size was valued at US$ 35.85 billion in 2023 and is anticipated to witness a compound annual growth rate (CAGR) of 7.1 % from 2023 to 2030. The growth of the precision guided munition market is driven by increasing military expenditure, advancements in missile defense systems, and technological developments. Additionally, the market is expected to benefit from growing interest in network-centric warfare systems, which are designed to allow soldiers to share information and coordinate their operations more effectively.

Global Precision Guided Munition Market: Regional Insights

Based on geography, the global precision guided munition market is segmented into North America, Europe, Asia Pacific and Rest of World.

Asia Pacific is also expected to register higher CAGR compared to the other regional markets during the same period. This is mainly attributed to the increased economic growth and technological advancements in various nations of this region, along with cross border disputes, terrorist conflicts, and strategic interests.

North America is also predicted to grow at a substantial rate over the forecast period. This is largely attributed to the increasing defense spending in this region by the governments of United States, Canada, and Mexico.

Europe is also likely to witness significant growth in the global precision guided munition market during the forecast period. This is largely owing to the increasing terrorist attacks in this region and the continuous modernization initiatives undertaken by governments to upgrade their military equipment to fulfill future defense needs.

Figure 1. Global Precision Guided Munition Market by Region, 2022

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Global Precision Guided Munition Market Drivers:

Rising demand from defense sector to foster precision guided munition market growth

The precision guided munition market is a growing segment in the global military and defense industry. These weapons use advanced technologies, such as GPS tracker, laser guidance, and inertial navigation systems, to accurately hit a specific target or location. They are used in a variety of applications, including military operations, law enforcement, and homeland security. They also provide several benefits over traditional weapons, including high accuracy and reduced collateral damage.

Increasing military expenditure to propel market growth

Rise in military spending due to rising counterterrorism activities is driving growth of the market. For instance, In July 2018, the European Defense Fund announced a budget of USD 14.66 billion for the period of 2021-2027 which covers both research window and capability expansion. Similarly, Indian government announced a record budget of USD 65.64 billion for defense spending, which is 13.73% of total Central Government Expenditure and 2.15% of GDP for the year 2021-22. Moreover, military spending in Japan also witnessed a significant increase from USD 48.6 billion in 2020 to USD 21.7 billion in 2021 owing to perceived threats from North Korea and China.

Global Precision Guided Munition Market Opportunities:

A growing number of military and defense programs by various nations for protecting territory and security measures is projected to provide significant growth opportunities in the global market for precision guided munitions market. In addition, the increasing number of missile modernization programs is expected to provide additional market opportunities over the forecast period.

The precision guided munitions market is projected to witness significant growth over the forecast period owing to growing demand for advanced war weapons that can accurately hit the target without any human intervention. Increasing military expenditure is also expected to propel the growth of this market. Furthermore, the increasing need for long-range tactical missiles to defeat enemy targets and a growing concern for the advancement of air and missile defense systems are further predicted to increase the demand for the use of precision guided munitions.

Global Precision Guided Munition Market Trends:

Growing popularity of smart precision-guided munitions

Smart precision-guided munitions are very important weapon in any battlefield, especially long-range battlespace. They are programmed to follow precise directions and thereby avoid hitting innocent civilians or damaging aircraft that may be in range of the bomb.

Growing number of merger and acquisition in the market

In December 2020, Lockheed Martin Corporation acquired Aerojet Rocketdyne Holdings, Inc., a rocket, and missile propulsion manufacturer. The acquisition is expected to enhance Lockheed Martin Corporation’s support for critical U.S. and allied security missions and strengthening its market positioning in space and hypersonic technology used in missiles and rockets. Key players are adopting such business strategies to increase market presence and this trend is expected to continue in the market, thereby fueling market growth.

Global Precision Guided Munition Market Restraints:

Federal and legislative rules and regulations

There are a few challenges that hinder the development of the precision guided munition market. These include federal and legislative rules and regulations that state-owned defense organizations must comply with, such as import-export control regimes and exchange controls. This factor is expected to hinder the market growth.              

Accuracy of autonomous precision guided munitions is difficult to restrict market growth

The accuracy of autonomous precision guided munitions is difficult to guarantee, because they depend so heavily on sensor data. The algorithms that process these data can make errors, resulting in false detections. As a result, it is critical to ensure the reliability of the sensors and the targeting software that control the weapon’s operation. This can be a challenge because there are a variety of environmental conditions that can negatively impact the accuracy of these technologies, including weather, light, and the obscuring effects of dust or smoke.

Figure 2. Global Precision Guided Munition Market by Product , 2022

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Global Precision Guided Munition Market Segmentation:

The global precision guided munition market report is segmented into product, technology, and region

Based on product, the market is segmented into Tactical Missiles, Guided Rockets, Guided Ammunition, and Loitering Munition. Out of which, the tactical missiles segment is expected to grow at a significant rate in the global precision guided munition market over the forecast period. These are shorter-ranged weapons that can be used in a variety of applications, such as close combat, scouting, and reconnaissance.

Guided Ammunition segment is also expected to witness significant growth in the near future as they are highly effective and versatile as they can be fired at various angles, modes, and platforms.

Based on Technology, the market is segmented into Infrared, Semi-Active Laser, Inertial Navigation System (INS), Global Positioning System (GPS), Radar Homing, Anti-Radiation, and Others. Out of which, Infrared is expected to dominate the global market over the forecast period and this is attributed to its cost- effectiveness and precise location detection

Semi-Active Laser segment is also expected to witness significant growth in the near future owing to its fast coordination and compatibility with various weapon systems ranging from rockets to missiles.

Global Precision Guided Munition Market: Key Developments

• In October 2020, Raytheon Technologies Corporation’s Storm Breaker smart weapon got approval from the U.S. Air Force's Air Combat Command to be installed at F-15 Eagle fighting aircraft for defense use. The approval is expected to increase the product installation on the said fighting aircraft, thereby strengthening the company’s market positioning in the U.S. Airforce and among international players.
• In March 2020, Raytheon Technologies Corporation launched a new variant in its Excalibur precision- guided munition product portfolio by the name of Excalibur S. The newly launched Excalibur variant can switch from GPS guidance to laser guidance, thus following the commands of an operator on the ground to hit a moving target. It is thus expected to strengthen the company’s product portfolio in the U.S. as well as in the international defense market.
• In March 2021, BAE Systems was awarded a contract of USD 16 million by the BAE Office of Secretary of Defense (OSD) / Strategic Capabilities Office (SCO) along with support from the U.S. Army to demonstrate the lethality of its hypervelocity projectile (HPV) munition system. The contract is aimed to improve and enhance the company’s HVP system starting 2021 to 2022.
• In March 2021, BAE Systems acquired Pulse Power and Measurement Limited (PPM), an independent developer and manufacturer of high-end electronics. The acquisition is expected to strengthen the use of radio frequencies systems across a range of applications for commercial and military customers.
• In May 2021, Lockheed Martin Corporation’s precision strike missile completed the longest flight to date. Long-range precision strike missile LrSM demonstrated a flight range of 400 kilometers is one of the three demonstrations that is expected to take place in 2021 as a part of the Enhanced Technology Maturation and Risk Reduction (ETMRR) phase of the development program, which in turn is expected to boost the adoption LrSM in the global market.
• In December 2020, Lockheed Martin Corporation acquired Aerojet Rocketdyne Holdings, Inc., a rocket, and missile propulsion manufacturer. The acquisition is expected to enhance Lockheed Martin Corporation’s support for critical U.S. and allied security missions and strengthening its market positioning in space and hypersonic technology used in missiles and rockets.

Global Precision Guided Munition Market: Key Companies Insights

The global precision guided munition market is highly competitive. This is attributed to continuous launch of new technologies due to ongoing R &D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on regional as well as global basis. Some of the key players in the global precision guided munition market are Lockheed Martin Corporation, Northrop Grumman Corporation, Raytheon Technologies Corporation, General Dynamics Corporation, BAE Systems, Rheinmetall AG, SAAB, Elbit Systems Ltd, MBDA, and Israel Aerospace Industries

*Definition: Precision guided munition are degrade or destroy a specific target and to minimize collateral damage to noncombatants, materiel, and facilities near the targeted location. These munitions use advanced global positioning systems, laser guidance, and inertial navigation systems to achieve these goals.