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The Naval Vessels Maintenance, Repair, and Overhaul (MRO) Market size is estimated to grow by USD 6.88 Billion at a CAGR of 6.89% from 2023 to 2028. Increasing global focus on keeping naval fleets combat-ready is driving the market, fueled by maritime disputes and regional rivalries. This leads to development and acquisition of naval vessels, boosting market growth.
Meanwhile, growing MRO costs have spurred Asia's emergence as a naval vessel maintenance hub, with labor-intensive MRO services prompting investments in shipyards and procurement projects. China, India, and Japan are key players, with investments in Bohai Shipyard and other infrastructure. These trends are positively impacting the market and driving forecasted growth.
Market Forecast 2024-2028
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The dry dock MRO segment is estimated to witness significant growth during the forecast period. Dry dock naval MRO activities are important for the successful operation, safety, and longevity of naval vessels, such as aircraft carriers and destroyers, as well as submarines. In addition, when a vessel is dry-docked, it can undergo extensive inspections, repairs, and upgrades, which would otherwise be difficult to accomplish while in the water.
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The dry dock MRO segment was the largest segment and was valued at USD 5.19 billion in 2018. Moreover, the primary objective of dry dock MRO is to maintain the seaworthiness of naval vessels throughout their operational lifetime. This comprises a variety of tasks, including maintenance of the hull, painting of the hull, repair of propellers and rudder, replacement of equipment, system modifications, and more. Furthermore, besides the standard maintenance tasks, dry dock periods offer an opportunity to implement technological progress, enhance operational performance, and meet regulatory requirements. Hence, such factors are fuelling the growth of this segment which in turn will drive the market growth during the forecast period.
Based on vessel orientation, the segment is classified into aircraft carriers, submarines, destroyers, frigates, amphibious vessels, and others. The aircraft carriers segment is a dominating segment of the market, comprising a single type of vessel. For instance, as of October 2023, about 47 active aircraft carriers were operated globally by about 14 navies. In addition, the US has 11 large nuclear-powered carriers, which have the capability to carry approximately 80 fighter jets each. Furthermore, most of the aircraft carriers (excluding light carriers) can carry at least 50 fixed-wing combat aircraft. Therefore, an aircraft carrier is much bigger than an amphibious assault ship or a destroyer. Hence, the cost of maintenance, repair, and overhaul of an aircraft carrier is high, which is expected to support the growth of the market during the forecast period.
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APAC is estimated to contribute 42% to the growth by 2028. Technavio’s analysts have elaborately explained the regional trends, drivers, and challenges that are expected to shape the market during the forecast period. Another region offering significant growth opportunities to market players is North America. Some of the main naval forces in North America include the US Navy, Royal Canadian Navy, and Mexican Navy. In addition, the US Navy has a very large naval fleet comprising 11 nuclear-powered aircraft carriers. Most of these aircraft carriers, except one (USS Gerald R. Ford), were commissioned between 1975 (USS Nimitz) and 2009 (USS George H.W. Bush).
Therefore, aircraft carriers frequently require maintenance and repair services and routinely undergo modernization programs. Furthermore, the US is the only country in the world that has a very large deployment of naval vessels in foreign countries. For example, NSA Bahrain in Bahrain and NSA Naples in Italy serve as homeports for the US Fifth Fleet and the US Sixth Fleet, respectively. Hence, such factors are driving the market growth in North America during the forecast period.
The Naval Vessels MRO (Maintenance, Repair, and Overhaul) Market is influenced by various factors, with feasibility studies and advancements in the Telecommunications industry playing crucial roles. Network infrastructure and Communication technology are pivotal in ensuring seamless operations and connectivity onboard naval vessels. Emerging technologies such as Voice over IP (VoIP) and Multimedia services enhance communication capabilities, while Mobile broadband and LTE networks provide high-speed data transfer.
Trends indicate a shift towards 5G networks and Unified communications, enabling faster and more efficient data exchange. However, challenges exist in integrating these technologies into existing network architecture and implementing IMS solutions for improved performance. VoLTE is also gaining traction, promising enhanced voice quality and reliability.
Telecom operators play a significant role in providing and maintaining these services, necessitating collaboration with naval forces. Overall, the Naval Vessels MRO Market continues to evolve, driven by advancements in communication technologies and the need for efficient network management onboard naval vessels.
Increasing emphasis on maintaining the combat readiness of naval fleets is significantly driving the global geopolitical landscape. This is evident through various maritime disputes, territorial contentions, and regional as well as global rivalries. For instance, numerous nations advocate for freedom of navigation operations (FONOPs) in the South China Sea, while disputes over maritime claims persist in the East China Sea. Additionally, India and Pakistan have long been embroiled in a territorial dispute over the Jammu and Kashmir region since gaining independence.
This geopolitical scenario is fostering the development and procurement of naval vessels, including submarines, aircraft carriers, and destroyers, especially among nations directly involved in rivalries or conflicts. For example, Japan unveiled its inaugural Soryu-class submarine equipped with a lithium-ion battery in February 2022 to counter the escalating intrusions by the Chinese Navy into its territorial waters. Consequently, these dynamics are positively influencing the market and are anticipated to propel its growth throughout the forecast period.
Growing MRO costs is the key trend driving significant shifts in the naval vessel maintenance landscape. As MRO services predominantly rely on labor-intensive processes, labor costs emerge as a substantial component during scheduled maintenance activities for naval vessels. Consequently, the escalating labor expenses are catalyzing the emergence of developing countries in Asia, such as Sri Lanka, India, and Vietnam, as favored destinations for naval vessel maintenance.
Moreover, countries like China, India, and Japan are actively investing in expanding their shipyard capacities and engaging in global shipbuilding projects. Notably, China's focus on enlarging its Bohai Shipyard is poised to enhance its capabilities in future submarine construction endeavors. These strategic investments are reshaping the market dynamics and are expected to drive market growth in the foreseeable future.
The challenge lies in time and cost overruns within Marine Rotating Systems (MRO) contracts, posing a significant obstacle to the global market. These delays and cost escalations have led to a depletion in available resources, thereby impacting the operational readiness of naval forces, service providers, and imposing budgetary constraints.
Furthermore, the intricacies inherent in maritime maintenance and repair (MRO) contracts contribute substantially to these challenges. Naval vessels demand specialized and intricate maintenance and repair services, necessitating a diverse array of technical expertise and equipment. Moreover, the execution of MRO projects often encounters time-consuming processes and unforeseen contingencies, leading to both delays and heightened costs. These factors collectively cast a negative influence on the market landscape, potentially hindering market growth throughout the forecast period.
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Austal Ltd: The company offers naval vessels MRO such as fast, cost-effective general refit and repair solutions for high-speed aluminum vessels worldwide.
We also have detailed analyses of the market’s competitive landscape and offer information on 20 market companies, including:
Abu Dhabi Ship Building PJSC, Babcock International Group Plc, BAE Systems Plc, Fincantieri Spa, General Dynamics Corp., Hanwha Corp., Huntington Ingalls Industries Inc., Kongsberg Gruppen ASA, Larsen and Toubro Ltd., Lockheed Martin Corp., Naval Group, Northrop Grumman Corp., Raytheon Technologies Corp., Rhoads Industries, Rolls Royce Holdings Plc, Saab AB, Teledyne Technologies Inc., Thales Group, and thyssenkrupp AG.
Technavio report provides an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies companies into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Companies are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.
The market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018 to 2028.
The market is influenced by military budgets and fleet modernization plans of governments aiming to enhance the capabilities of their navy fleets. These plans often include project executions to integrate advanced technologies and conduct necessary checks on existing fleets.
Governments invest in mid-life extension programs for warships to improve their longevity and reduce operating costs. This includes upgrading to advanced equipment and implementing efficient in-service maintenance and overhaul plans for various weapon systems. Companies like MBDA UK play a significant role in supplying advanced naval systems such as the Common Anti-Air Modular Missile and the Sea Ceptor for vessels like the Type 45 destroyers. These systems, including the Sea Viper air defense missiles, are crucial for the command and control (C2) system of air warfare destroyers like the Horizon class. International collaborations such as Naviris and organizations like OCCAR facilitate the feasibility studies and implementation of modernization projects. These efforts extend to allied vessels like the DDG-51 Arleigh Burke-class Flight IIA destroyers, which require upgrades in sensors, electronics, and weapons to meet evolving threats.
Naval Vessels MRO Market Scope |
|
Report Coverage |
Details |
Page number |
186 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 6.89% |
Market Growth 2024-2028 |
USD 6.88 Billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
6.22 |
Regional analysis |
North America, APAC, Europe, South America, and Middle East and Africa |
Performing market contribution |
APAC at 42% |
Key countries |
US, China, India, Russia, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Abu Dhabi Ship Building PJSC, Austal Ltd., Babcock International Group Plc, BAE Systems Plc, Fincantieri Spa, General Dynamics Corp., Hanwha Corp., Huntington Ingalls Industries Inc., Kongsberg Gruppen ASA, Larsen and Toubro Ltd., Lockheed Martin Corp., Naval Group, Northrop Grumman Corp., Raytheon Technologies Corp., Rhoads Industries, Rolls Royce Holdings Plc, Saab AB, Teledyne Technologies Inc., Thales Group, and thyssenkrupp AG |
Market dynamics |
Parent market analysis, Market Forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
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