Ammunition Market Size Report By Product (Bullets, Mortars, Rockets, Others), End-use (Civil, Defense), By Region (North America, Europe, Asia Pacific, Middle East & Africa) And Segment Forecasts, 2012 - 2025

Industry Insights

The global ammunition market size was estimated at USD 11.74 billion in 2015, and is expected to witness significant growth over the next eight years on account of growing security concerns resulted by the rise in terrorist organizations and activities. In the recent years, arms race has been witnessed among nations including China, India and Pakistan which is further expected to propel the market demand.

Ammunition market is categorized into product segment that mainly include bullets, mortars, rockets. End-users in this market include civil and defense. Unfavorable geopolitical conditions coupled with increasing tension across borders is leading to the increased stacking of weapons.

According to the recent stats published by Stockholm International Peace Research Institute (SIPRI) the U.S., China Saudi Arabia and Russia were the major countries having maximum expenditure on weapons and ammunition. The U.S. accounted for 36% of the global expenditure on weapons, followed by China with a share of 13%.

Increasing hunting & sports activities are also boosting the market globally. The U.S. is one of the largest exporters of arms and ammunition in the world. The U.S. industry is a commercialized sector and a key element in the U.S. economy. The U.S. ranks first when it comes to research & development, innovation, and manufacturing of arms and ammo.

Transporting ammunition through aircraft is expensive, since heavy ammunition lead results in more fuel consumption and adds to the maintenance cost. As a result, ammo manufacturers are employing efforts to develop lightweight casing for ammunitions, which is likely to facilitate in cutting down the transportation cost. In addition, it will further support soldiers to carry more rounds at the same weight.

Ammunition manufacturing requires specialized labor and machinery. In addition, high capital investment in R&D is expected to discourage the new entrants in the market. Furthermore, hazardous nature and high transportation cost of the product due to adherence to the imposed regulations is expected to further restraint the entrants of new player in the market.

Product Insights

Bullets were estimated as the largest product segment in 2015 accounting for 53.9% of the global ammunition market. This segment mainly comprises of small caliber bullets that are used in civil end-uses. Civil end-use consumes various firearms including revolvers, pistols, shotguns, and rifles. Rise in private end-users for personal security, in emerging economies has boosted the market demand. Others products such as rockets and mortars are preferred in the defense and military sector. Rise in terrorism is the key factor for increasing procurement of ammo globally.

Bullets are other types of ammo used for firearms and other weapons does not have any direct replacement. However, the market is expected to face internal substitution in terms of raw materials. Players in the market have developed polymer cased bullet, an alternative to conventional brass bullet, which is lighter and have a higher range. In addition, the market participants are focusing on development of lead-free bullets.

With advancement in technology, bullets with capability of turning, and changing its speed and sending data being developed by major military superpowers. These bullets are expected to enable the soldier to stay in protective cover and shoot around corners. Efforts are employed by various organizations to design and develop smart bullets, thereby influencing the overall ammunition market growth.

Rising border threats and national security concerns are driving the demand the demand for rockets over the forecast period. In addition, development of advanced ballistic missiles by major military powers are expected to generate high demand for ballistic missile in the future, thereby driving the growth of rocket market.

Application Insights

Civil was the most prominent segment in 2015 and accounted for 74.5% of the global revenue share. This segment is expected to witness significant growth owing to high expected growth from hunting & sports activities over the forecast period. Civil segment includes law enforcement, self-defense and sports & hunting. Outdoor recreational activity is a huge business in North America, especially in the U.S. A recent survey conducted by the U.S. Fish and Wildlife Services; Americans spend around USD 50 billion on sports and hunting. All these factors contribute to the overall growth of the ammo market.

Civil end-use segment is further segmented into law enforcement, sports & hunting, and self-defense. Law enforcement was estimated as the largest segment with a revenue of USD 3,824.5 million in 2015.The civil segment is driven by its sub-segment sports & hunting which is fueling the overall ammunition industry. Law enforcement and self-defense has also been key issue owing to the increase in terrorist activities and unstable geopolitical conditions in some parts of the world.

Increasing border conflicts have fueled the growth of ammo in defense applications across the globe. Moreover, rising defense expenditure across various economies associated with increased efforts the militaries in various economies to upgrade their military capabilities and modernization of weaponry is expected to drive the growth of ammunition market.

Stringent laws and regulations pertaining to the possession of firearms for civil use and complex procedure to obtain the license for possession of guns for commercial purpose is predicted to hamper the market growth. Moreover, increasing illegal trade of weaponry across the globe, if further projected to have an adverse effect on the ammunition industry.

Regional Insights

Asia Pacific dominated the global ammunition market in 2015 and is projected to continue its domination by 2024, growing at a CAGR of 4.5% over the forecast period. Rising terrorist activities in the region, especially in countries such as India is leading towards strengthening the overall defense system of the country. In March 2016, India signed a contract worth USD 15 billion to buy rockets and other ammunition.

Increasing efforts by the militaries in various economies in Asia Pacific to upgrade their military capabilities and modernization of weaponry is projected to drive growth. Moreover, rising geographical tension among countries including China, India and Pakistan and frequent standoff between the military forces is expected to propel the demand growth.

Europe was estimated as the second largest industry in 2015. Manufacturing of small arms and ammunition is a major industry in Europe owing to which it has retained its position as the key ammunition exporter in the world. Major countries in Europe include France, Russia Germany and UK.

North America ammunition industry is projected to witness notable growth on account of increasing hunting & sports activities in the region. U.S. ammunition industry is a commercialized sector and spends extensively on research and development. As a result, the industry is expected to witness a roll out of innovative weapons, which in turn will influence the demand for ammunition.

Competitive Market Share Insights

The global ammunition industry has continuously witnessed merger and acquisitions by the major players to ensure competitiveness and profitability and establish a strong foothold in the industry.

The industry is fragmented in nature with a large number of industry players present in North America and Europe. Key players in this industry include General Dynamics Corporation, BAE Systems, Remington Arms Company, Inc., RuagAmmotech, Poongsan Corporation, Federal Premium Ammunition and Maxam. In 2012, BAE systems partnered with General Dynamics Ordnance and tactical systems to manufacture 81mm Roll Controlled Guided Mortar (RCGM).

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