Market Trends of Latin America Defense Industry
This section covers the major market trends shaping the Latin America Defense Market according to our research experts:
The Vehicles Segment to Experience the Highest Growth During the Forecast Period
The vehicles segment of the market studied is expected to register the highest CAGR during the forecast period. This growth is mainly due to the current plans of the countries in Latin America to modernize their armed forces and upgrade their air, land, and sea capabilities. Chile, Colombia, and Brazil are some of the countries that are currently planning to upgrade their naval strengths. The Brazilian navy plans to procure 21 escort ships, five 13,000 metric ton replenishment ships, four 20,000 metric ton amphibious assault vessels, and 40,000 metric ton aircraft carriers in the coming years. Similarly, the Colombian navy plans to expand its current fleet of frigates to six by 2025 and add further two frigates by 2030. Additionally, the land forces of Brazil, Paraguay, and Peru, among others, are also making plans to replace the aging fleet of armored vehicles. The US State Department approved the sale of 178 reconditioned Stryker Infantry Carrier Vehicles to the Government of Peru in December 2016. The Brazilian army and Iveco Latin America signed a USD 3.68 billion contract in 2009 for the provision of armored personnel carriers of the VBTP-MR model to replace the aging Urutu CASCAVEL fleet. The deliveries began in 2012, and they are expected to happen through 2030. Such land, sea, and aircraft procurements may propel the growth of this segment during the forecast period.
Brazil Held the Highest Market Share in 2019
Currently, Brazil has the highest market share in the Latin American defense market. Brazil is the largest defense spender in Latin America, and it accounted for more than 40% of Latin America's total military spending over the past few years. In 2019, Brazil's defense expenditure was USD 26.9 billion, which was the highest in the Latin American region. The country announced USD 300 billion investment for a 20-year equipment plan in 2012. The three main countries from which Brazil majorly imports arms and weapon systems are France, the United States, and the United Kingdom, with majority imports being aircraft, armored vehicles, ships, missiles, and sensors. The country is currently progressing with the procurement of KC-390 aircraft (deliveries began in September 2019) and F-39 (Gripen F), which are being developed by Saab (Flight Test Instrumentation (FTI) was expected by end of 2019 and deliveries are expected to begin by 2021). The country also ordered four Tamandaré-class frigates that are scheduled to be delivered during 2025-2028, by the Águas Azuis consortium (Embraer Defense and Security, Thyssenkrupp Marine Systems (TKMS), Oceana Shipyard, and Atech). With such ongoing plans of procurement, the country's defense spending is expected to see significant growth during the forecast period, in spite of the current economic crisis.
