Ammunition is the material that is fired, dropped, scattered, or detonated from a weapon. Ammunition comprises both components of other weapons, which create a significant effect on the target, as well as expandable weapons, such as missiles, bombs, grenades, and land mines. Typically, ammunition is denoted by its size, and various sizes are often designed to toil in a specific weapon system. Different types of ammunition include small caliber ammunition (.50 caliber and below), medium caliber ammunition (greater than 20mm), which includes armor-piercing, high explosive and anti-personnel cartridges, and large caliber ammunition (with projectiles for weapons being above seven inches). Due to the increased crime rate, mainly in Middle East and Asia-Pacific, it is observed that the procurement of handguns is increasing primarily for self-defense.
The global small caliber ammunition is a billion-dollar industry, which is expected to reach $8.19 billion in 2025 at a CAGR of 3.75% during 2020-2025. Due to the COVID-19 pandemic, the small caliber ammunition market experienced a significant dip in 2020. However, the market is expected to stabilize during the forecast years. Moreover, the small caliber ammunition market is expected to even out by 2023. The growing demand for small firearms ammunition in emerging regions, such as Asia- Pacific, Middle East and Africa, is likely to increase opportunities for small caliber ammunition players across different end-user industries such as civilian, law enforcement, hunting and sports, and military. An increase in civilian conflicts and terrorist clutter across the world has further given rise to business prospects for the ammunition industry.
The global small caliber ammunition market has gained its importance in military operations where it has been used against terrorist groups and enemy forces. Furthermore, companies are introducing latest technology weapons for the small caliber ammunition market that is gaining the importance among defense end users due to the advantages of enhanced lethality. Many defense forces across the world have engaged in contracts with various leading manufacturers to produce a specific range of small caliber ammunition.
Moreover, increasing demand in Asia-Pacific and Middle East regions gives an opportunity to the companies to expand their product in these regions. With the Middle East in political turmoil, Asia-Pacific is becoming the next hub of global economic growth, followed by Africa. New military policies in the countries of Asia-Pacific focus on modernizing weapons. For instance, in February 2019, India signed a contract with Sig Sauer, Inc. to import 72,400 assault rifles. Moreover, the U.S. military is assisting Asia-Pacific countries such as India and Japan to rebalance the defense and its economic resources, which will strengthen the partnership and alliance of both the regions.
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The North America region is the largest market for ammunition manufacturers and is expected to remain so over the forecasted period. In 2019, North America had a market share of 41.7% of the global small caliber ammunition market. It is anticipated to reach a market value of $3.57 billion by 2025 at a CAGR of 4.48% from 2020 to 2025. The small arms and ammunition manufacturers in North America are experiencing a growth in the defense/military market, as the governments in this region are significantly increasing their defense budgets for procuring defense solutions. Although civilian and commercial sectors are expected to have decent demand in the market. However, due to the pandemic, the civilian market is completely closed for more than a quarter of the year. Due to the same, the civilian market experienced a dip in its market value.
