MEA to dominate interceptor missiles market by 2024, rising government funding for national defense to stimulate the global industry expansion
Publisher : Fractovia | Published Date : 2018-02-27Request Sample
Having been conceived in an era distinctive of wars and terrorist attacks, interceptor missiles market falls among the verticals that stand to gain massive benefits through the production of defense equipment and weapons. Consistently faced with luminous threats from enemy countries, myriad nations across the globe have been making investments to stock themselves with these missiles, to arm themselves suitably in the face of an invasion or unexpected enemy assault. The role of the government in this regard is particularly important, given the issue of national security. Indeed, regional governments, since long, have been involved in consolidating the administration with regards to securing their respective economies, the impact of which has been depicted in the ongoing interceptor missiles industry trends. Not to mention, renowned participants in interceptor missiles market are leaving no stone unturned in order to bring forth a renewed portfolio of products for the defense fraternity. Interceptor missiles industry is also ablaze with authorized agencies partnering with leading players to arm their nation’s defense sector with the required equipment. One of the most recent validating the aforementioned statement is that of The Missile Defense Agency (MDA) awarding a contract to one of the foremost contenders in interceptor missiles market - Lockheed Martin. Worth USD 459 million, this contract entails the development and delivery of interceptors for the THAAD (Terminal High Altitude Area Defense) weapon system. In addition to the funding provided earlier, the contract’s total worth as of now is around USD 1.28 billion. Incidentally, these interceptors support the U.S. Army THAAD units and their operational requirements.
U.S. Interceptor Missiles Market, By Surface, 2016 & 2024, (Units)
A quick insight elaborating on the role of national governments in interceptor missiles market growth
Riding high on the hallmark of national defense and security, the revenue graph of interceptor missiles industry thrives exceptionally on the support of the regional governments. In a bid to remain impregnable and prepared in the face of an attack, governmental bodies have been providing substantial grants for upgrading defense equipment and purchasing the latest missiles to safeguard the nation against terrorist attacks. A gist of how various countries have been upping their fortification and how this has been impacting interceptor missiles market share has been outlined below:
- The Middle East has been forecast to emerge as the most viable growth ground for interceptor missiles market, in the wake rise of the increasing enemy threats across the globe. Countries across MEA have been prominent buyers and producers of state-of-the-art missiles since decades, making MEA interceptor missiles industry one of the most prominent avenues for investment. Nearly a year ago, The U.S. State Department approved a missile sale to the UAE worth USD 2 billion. The sale comprised 100 GEM-T missiles and 60 Patriot PAC-3 interceptors manufactured by two of the most leading players of interceptor missiles market – Raytheon and Lockheed Martin Corp. respectively.
- Incidentally, the United States is UAE’s largest armaments supplier, accounting for over 60% of major weapon supply in the country. Between 2011 and 2015, UAE also stood among the top 10 buyers of American weapons – thus consolidating its presence as a proactive ground for interceptor missiles industry.
- The U.S. Missile Defense Agency, in tandem with Israel’s Defense Ministry, recently carried out a test of the long-delayed long-range Arrow 3 missile defense system that emerged successful, effectively contributing toward the growth of the regional interceptor missiles market. The Arrow 3 falls among the highest level of the country’s multi-tiered missile defense network and had been developed in a conjoint Israeli-American program that aims to safeguard Israel against its arch rival, Iran. Israel’s liaison with the U.S. government further validates the government’s efforts to ramp up the country’s defense system, indirectly contributing toward the region’s expanding interceptor missiles industry.
- In a bid to strengthen its stance in interceptor missiles market and empower the nation’s security, the Trump Defense Budget 2019 has planned to provide around USD 10 billion to Pentagon’s Missile Defense Agency. The funding comes in the wake of the rising threats from North Korea and is to be expended on 20 extra ground-based interceptor missiles at Fort Greely, Alaska. Indeed, threats from North Korea have also prompted other nations to arm themselves – say for instance, the government of South Korea has announced its plans to order Patriot Advanced Capability-3 missiles to combat effectively against North Korea’s current ballistic missile threat. Apparently, the purchase of the PAC-3 Missile Segment Enhancement by interceptor missiles industry firm Lockheed Martin has been officially approved by the Defense Acquisition Program Administration and is valued at USD 53 million.
It is rather overt that the defense departments of national governments have been going the whole hog to protect the nation’s security against threats. Indeed, this will prove to be one of the most perpetually strong driving forces for interceptor missiles market size in the ensuing years.
Interceptor missiles industry is inherently infamous for the fact that new entrants find it remarkably difficult to penetrate this business space. One of the principal factors responsible for this adverse predicament is the exorbitant missile manufacturing cost. According to a 2012 survey, development expenditure is well in excess of USD 400 million, while the actual missile purchase cost amounts to around USD 70 million. Combined with repair and maintenance costs, the price extends to around USD 90 million per ballistic missile. Novices overtly find it difficult to even establish their place in interceptor missiles market, especially when competing with the strongly stabilized league. Another essential drawback that interceptor missiles industry is remnant of is the fact that these missiles, more often than not, turn obsolete. This in consequence, prompts periodic technological advancements, further adding to the already soaring costs of these products. Nonetheless, generous defense grants by regional governments and the efforts put in companies with respect to R&D programs to reduce manufacturing costs are likely to marginally combat these challenges faced by interceptor missiles market players in the future. Despite the ongoing flood of restraints, interceptor missiles industry size has been forecast to cross 3,000 units by 2024, in terms of volume.
