NATO Ammunition Market Analysis North America, Europe, APAC, Middle East and Africa, South America - US, Canada, China, UK, Germany - Size and Forecast 2024-2028

NATO Ammunition Market Size 2024-2028

The NATO ammunition market size is forecast to increase by USD 179.2 million at a CAGR of 4.5% between 2023 and 2028.

• The market is driven by several key factors, including the increasing need for military personnel to be equipped with adequate ammunition for peacekeeping missions and security purposes. The proliferation of tactical and strategic missiles within the NATO military alliance necessitates a constant supply of ammunition.
• Additionally, the reduction in weight of ammunition is a significant trend, as military forces seek to increase mobility and efficiency. However, the market also faces challenges, such as the emergence of illicit ammunition manufacturers, which can compromise the quality and safety of the military's supply. Overall, the global defense spending increase is a major growth factor for the market, ensuring its continued significance in maintaining peace and security.

What will be the Size of the Market During the Forecast Period?

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• The market plays a crucial role in ensuring the readiness and effectiveness of the armed forces of NATO member countries. This market caters to the demand for ammunition supplies necessary for collective defense, geopolitical conflicts, counterterrorism operations, and peacekeeping missions. The military alliance relies on a well-stocked inventory of medium-caliber and tactical missile ammunition to maintain its security commitments. Medium-caliber ammunition is essential for various military applications, including armored vehicles, artillery, and helicopters. Tactical missiles are critical components of advanced weaponry used for long-range engagements. Defense spending and defense expenditure are significant factors influencing the market.
• Additionally, military personnel require a consistent supply of ammunition to maintain their readiness for various operations. National safety and security are top priorities for NATO member countries, leading to a steady demand for ammunition. Governments allocate a substantial portion of their GDP to military procurement, ensuring a steady market for ammunition suppliers. Military exercises and peacekeeping missions further boost the demand for ammunition. However, it is essential to note that ammunition is not only used for military purposes. It is also used in sports, such as shooting, for recreational activities involving rifles and pistols, and for small-caliber ammunition. The market is characterized by the use of advanced materials, such as lightweight bullets and polymer-based cases, to improve the performance and efficiency of ammunition.

How is this market segmented and which is the largest segment?

The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD million" for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.

• Product
  • Small caliber
  • Medium cabliber
  • Large caliber
• Geography
  • North America
    • Canada
    • US
  • Europe
    • Germany
    • UK
  • APAC
    • China
  • Middle East and Africa
  • South America

By Product Insights

• The small caliber segment is estimated to witness significant growth during the forecast period.

The market is a significant sector within the military alliance, supplying ammunition for tactical and strategic missiles used by military personnel in peacekeeping missions and security operations. In 2023, the small caliber segment held the largest market share due to its widespread use by military and homeland security personnel. The less lethal nature of small caliber ammunition makes it a preferred choice for various applications. Furthermore, the proliferation of open online marketplaces for small arms and ammunition and the increasing procurement by defense and homeland security sectors to mitigate the rising instances of conflicts contribute to the expansion of this segment. The market is expected to grow steadily in the forecast period, driven by the demand for small caliber ammunition.

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The small caliber segment was valued at USD 310.40 million in 2018 and showed a gradual increase during the forecast period.

Regional Analysis

• North America is estimated to contribute 42% to the growth of the global market during the forecast period.

Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

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In the North American region, the market is expected to maintain its leading position in 2024 due to substantial defense expenditures. Notable contracts, such as NATO's USD 1.2 billion agreement in January 2024 for 220,000 155-millimeter artillery shells, underscore this dominance. Furthermore, the U.S. Army's transition to a 6.8 mm cartridge for close-combat troops may influence the demand for 5.56 mm and 7.62 mm NATO ammunition. In 2023, the NATO Support and Procurement Agency (NSPA) procured approximately USD10 billion worth of ammunition, including deals for 1,000 Patriot missiles (USD 5.5 billion) and a combination of 155-mm artillery, anti-tank guided missiles, and tank ammunition (USD 4 billion). This significant investment in ammunition highlights the continued importance of small-caliber ammunition, such as those used in rifles and pistols, as well as lightweight bullets and polymer-based cases, in military applications. Online sales channels continue to gain popularity, offering military organizations efficient and convenient access to a wide range of ammunition types.

Market Dynamics

Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

What are the key market drivers leading to the rise in adoption of NATO Ammunition Market?

The rise in defense spending globally is the key driver of the market.

• NATO countries are prioritizing the enhancement of their military firepower and defensive capabilities in response to escalating global threats and the increased deployment of NATO forces in various conflict zones. The United States is urging NATO members to boost their military expenditures, with the collective defense budget projected to reach USD1 trillion. This financial influx empowers these nations to expand their military inventories and heighten their combat readiness. Advanced materials are increasingly being utilized in the production of ammunition, such as centerfire and rimfire, to ensure maximum efficiency and precision. Defense organizations are also focusing on fuel-efficient transportation methods to minimize logistical challenges.
• Additionally, hollow-point bullets and semi-jacketed hollow-point bullets are gaining popularity due to their ability to expand upon impact, increasing the likelihood of neutralizing targets. Indigenous production of ammunition is a growing trend, as it reduces dependence on foreign suppliers and offers greater control over the supply chain.

What are the market trends shaping the NATO Ammunition Market?

Reduction in weight of ammunition is the upcoming trend in the market.

• The market is experiencing growth due to the collective defense principle, which necessitates well-equipped armed forces for counterterrorism operations and other defense needs. The focus on medium-caliber ammunition, in particular, is significant as it offers a balance between weight and combat effectiveness. Another trend influencing the market is the reduction in the weight of ammunition, which enhances military logistics, procurement, and agility.
• With defense spending on the rise in various countries, there is an increasing demand for medium-caliber ammunition that does not hinder the agility and efficiency of personnel. The challenge for the ammunition industry is to produce lightweight ammunition that maintains combat performance and precision. This trend is expected to continue driving the growth of the market over the forecast period.

What challenges does NATO Ammunition Market face during the growth?

Proliferation of illicit ammunition manufacturers is a key challenge affecting the market growth.

• Ammunition trade remains a challenging area to track due to the significant portion, estimated to be over 80%, that exists outside of reliable export data, according to the UN Office of Disarmament Affairs. Conflict Armament Research (CAR) has identified six primary causes of weapons diversion: battlefield capture (30%), poorly managed national stockpiles (12%), state-sponsored diversion (22%), loss from state custody for unknown reasons (27%), state collapse (5%), and unknown causes (4%).
• Additionally, experts monitoring UN arms embargoes have focused the importance of accountability systems to prevent the diversion of ammunition. The geopolitical tensions surrounding gun laws, gun ownership, military operations, and terrorism significantly impact the firearm possession and use of advanced weapon systems, making it crucial to maintain transparency in ammunition trade.

Exclusive Customer Landscape

The market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the market report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.

Customer Landscape

Key Companies & Market Insights

Companies are implementing various strategies, such as strategic alliances, market forecast, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market. The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:

• BAE Systems Plc
• CBC Global Ammunition
• Diehl Stiftung and Co. KG
• General Dynamics Corp.
• Global Ordnance LLC
• KNDS N.V.
• Nammo AS
• Northrop Grumman Corp.
• Olin Corp.
• Polska Grupa Zbrojeniowa SA
• Rheinmetall AG
• RUAG International Holding Ltd.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Research Analyst Overview

The market is a significant sector within the global defense industry, catering to the ammunition needs of the military alliance's armed forces. The collective defense principle of NATO necessitates the readiness of its military personnel for various operations, including counterterrorism and peacekeeping missions. Consequently, the demand for medium-caliber ammunition, tactical and strategic missiles, and advanced weaponry is high. Defense spending and defense expenditure are crucial factors driving the growth of the market. Military procurement budgets are allocated towards the production of indigenous ammunition and the purchase of ammunition from defense organizations. Advanced materials, fuel-efficient transportation, and online sales are some of the trends shaping the market.

Additionally, the market encompasses a wide range of ammunition types, including medium-caliber ammunition, centerfire ammunition, rimfire ammunition, hollow-point bullets, and semi-jacketed hollow-point bullets. Small-caliber ammunition for rifles and pistols, as well as lightweight bullets and polymer-based cases, are also in demand. Geopolitical tensions and gun laws impact the market, influencing firearm possession and military operations. Military exercises and military capabilities are other factors that contribute to the market's growth. The market is expected to witness significant growth due to the increasing focus on national safety and security.

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What are the Key Data Covered in this Market Research and Growth Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting between 2024 and 2028
• Precise estimation of the size of the market and its contribution of the market in focus to the parent market
• Accurate predictions about upcoming market growth and trends and changes in consumer behaviour
• Growth of the market across North America, Europe, APAC, Middle East and Africa, and South America
• Thorough analysis of the market's competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of market companies

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