Naval Vessels Market - Growth, Trends, and Forecasts (2020 - 2025)

Naval Vessels Market - Growth, Trends, and Forecasts (2020 - 2025)

  • January 2021 •
  • 140 pages •
  • Report ID: 6009489 •
  • Format: PDF
The naval vessels market is anticipated to register a CAGR of over 4% during the forecast period.

- The main factor driving the naval vessels market is the rapid growth in defense spending. Also, the increase in geopolitical tensions and maritime disputes between several countries is majorly driving the procurements of naval vessels.
- The fleet modernization plans of various armed forces are increasing the procurement of newer generation naval vessels, which is attributing to the growth in naval vessels market.

Key Market Trends
The Destroyers Segment Had the Largest Share in the Market in 2019

Currently, destroyers have the highest share of all the segments. The advantages the destroyers offer, like being fast, maneuverable, and providing long-endurance, help them effectively escort larger vessels in a fleet, convoy, or battle group, and defend them against smaller powerful short-range attackers. Currently, the demand for destroyers is higher than the other naval vessels, as various nations are looking to acquire new destroyer ships. In 2018, the US Navy announced that it had taken delivery of the Zumwalt-class destroyer Michael Monsoor from Bath Iron Works. Also, in December 2019, China added up 18 destroyer ships to its Type 052D Destroyer class fleet. In addition, several countries are also planning to procure destroyers to replace its aging naval fleet. The UK Navy is planning to replace its Type 45 destroyers with a version of the new Type 26 frigate. The frigate is expected to enter the service with the UK fleet by the end of the forecast period. The new frigates are also expected to ultimately replace the air-defense-optimized Type 45s probably in the next ten years. Thus, the ongoing procurement plans are expected to increase the revenues for the segment, during the forecast period. However, as several countries are now emphasizing on procuring a larger fleet of smaller ships for their navies, the focus on the destroyers may reduce, which may slightly hamper the growth of the segment in the years to come.

The Asia-Pacific Region to be the Fastest Growing Market During the Forecast Period

The Asia-Pacific region is expected to experience the fastest growth during the forecast period. The escalated tensions between the countries in this region have led to countries increasing their military spending and their naval fleets, which is expected to boost the growth of the market in the region during the forecast period. Countries, like South Korea, Australia, India, China, and Indonesia, are primarily investing in the development, building, and procurement of new naval vessels in this region. In June 2018, Australia signed a deal with BAE Systems PLC, worth USD 26 billion to deliver nine high-end anti-submarine warfare frigates to the country’s navy. Similarly, in November 2018, India’s Goa Shipyard Limited (GSL) signed a USD 500 million deal with Rosoboronexport of Russia to indigenously manufacture two stealth frigates. Such contracts will facilitate technology transfer between the nations. Additionally, the Indian Navy is constructing four Vishakhapatnam-class Destroyers, which is expected to be commissioned into the navy fleet by 2021 and will be the largest destroyers operated by the Indian Navy once deployed. The presence of shipbuilding companies, like Austal, China State Shipbuilding Corporation, and Hyundai Heavy Industries (HHI), is helping the local manufacturing of naval vessels in the region, thereby helping the market growth of the region.

Competitive Landscape
The prominent players in the naval vessels market are General Dynamics Corporation, ThyssenKrupp AG, BAE Systems PLC, The Naval Group, and Abu Dhabi Ship Building Co. With the growing competition in the industry, innovation becomes a critical factor for the players for standing out in the industry, as many countries are trying to procure next-generation warships that possess advanced capabilities. For instance, in February 2020, the US Navy announced plans regarding the development of a next-generation large surface combatant that incorporates platform flexibility and growth capabilities to meet projected future fleet system requirements. The US Navy is going to spend USD 145 million on this contract. Such contracts will provide opportunities for players to strengthen their presence in the market. Players are also partnering to develop advanced naval vessels. For instance, Germany’s new F125 Baden-Württemberg-class series of frigates are designed and constructed by a joint-venture of ThyssenKrupp AG and Lürssen Werft GmbH & Co. KG. Such partnerships are expected to help the growth of the players during the forecast period.

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