Latin America Defense Market: Global Size, Opportunities, Historical Analysis, Development Status, Business Growth and Forecast: 2022-2031


Japan, Japan, Wed, Mar 30, 2022 11:14:22 PM / Comserve Inc. / — The Latin American defense market is expected to register a CAGR of over 1.5% during the forecast period.

the Latin American defense market is expected to register a CAGR of over 1.5% during the forecast period.

– Despite the slow growth of the region’s economy, countries in the Latin American region are planning the modernization of military equipment to strengthen their military forces.
– Long-standing border disputes, illegal weapons and drug trafficking across borders are some of the main reasons countries are increasing their defense spending on border security.
– Latin American countries mainly source from national defense companies to supply missile systems, firearms, ammunition and other defense equipment to their armed forces. However, the region is also a major importer of aircraft, helicopters, armored vehicles, ships, submarines and other parts and components from countries like the United States, Germany and France, among others.

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Main market trends

Vehicle Segment to Witness the Highest Growth Over the Forecast Period

The vehicle 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 Latin American countries to modernize their armed forces and improve their air, land and sea capabilities. Chile, Colombia and Brazil are among the countries currently planning to upgrade their naval forces. The Brazilian Navy plans to acquire 21 escort ships, five 13,000 metric ton supply ships, four 20,000 metric ton amphibious assault ships and 40,000 metric ton aircraft carriers in the coming years. Likewise, the Colombian Navy plans to expand its current fleet of frigates to six by 2025 and add two more frigates by 2030. Additionally, the land forces of Brazil, Paraguay and Peru, among others , are also planning to replace the aging fleet. armored vehicles. The US State Department approved the sale of 178 refurbished Stryker infantry transport vehicles to the government of Peru in December 2016. The Brazilian military and Iveco Latin America signed a $3.68 billion contract in 2009 for the supply of armored personnel carriers of the VBTP-MR model to replace the aging Urutu CASCAVEL fleet. Deliveries started in 2012 and are expected to continue until 2030. These land, sea and aeronautical purchases could propel the growth of this segment during the forecast period.

Brazil had the highest market share in 2019

Currently, Brazil has the highest market share in the Latin American defense market. Brazil is the biggest defense spender in Latin America, and it has accounted for more than 40% of Latin America’s total military spending in recent years. In 2019, Brazil’s defense spending was $26.9 billion, which was the highest in the Latin American region. The country announced an investment of 300 billion dollars for a 20-year equipment plan in 2012. The three main countries from which Brazil mainly imports weapons and weapon systems are France, the United States and the United Kingdom, with the majority imports being aircraft, armored vehicles, ships, missiles and sensors. The country is currently progressing in the acquisition of KC-390 aircraft (deliveries began in September 2019) and F-39 (Gripen F), which are under development by Saab (Flight Test Instrumentation (FTI) was planned by the end of 2019 and deliveries should start by 2021). The country has also ordered four Tamandaré-class frigates which should be delivered between 2025 and 2028, by the Águas Azuis consortium (Embraer Defense and Security, Thyssenkrupp Marine Systems (TKMS), Oceana Shipyard and Atech). With such ongoing procurement plans, the country’s defense expenditure is expected to witness significant growth over the forecast period, despite the current economic crisis.

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Competitive landscape

Major players in the defense market in Latin America are Embraer SA, IVECO SpA, Avibras Indústria Aeroespacial, Saab AB and The Boeing Company. There are many local players in the market, and most of these state-owned companies in the region supply their products and solutions exclusively to their national armed and security forces. Some of the state-owned and military-oriented companies are Compañía Anonima Venezolana de Industrias Militares (CAVIM) in Venezuela, Fábrica de Armas y Municiones del Ejército (FAME) in Peru, Fábricas y Maestranzas del Ejército (FAMAE) in Chile, and INDUMIL in Colombia. However, international players also hold a large share of the Latin American defense market, as the countries import defense equipment from the United States, Germany, and France, among others. Additionally, companies are developing new products to increase their market share. For example, in November 2019, Embraer unveiled its multi-mission medium airlift named C-390 Millennium, which can perform a variety of missions, such as transporting cargo and troops, dropping cargo and paratroopers, and search and rescue. Rising military spending and changing political situations are expected to open up new market opportunities for international players during the forecast period. Local players are also collaborating with international players to develop new and advanced warships and warplanes.

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Patrick F. Williams