Japan, Japan, Thu, 31 Mar 2022 06:38:41 / Comserve Inc. / -- The Latin American ammunition market is projected to record a CAGR of more than 2% during the forecast period.
The Latin American ammunition market is projected to record a CAGR of more than 2% during the forecast period.
- In Latin America, there is constant supply, availability, and proliferation of ammunition to civilians, law enforcement, and the military. This may be one of the major driving factors for the ammunition market in Latin America during the forecast period.
- The countries in Latin America, like Mexico, Brazil, Peru, Argentina, Bolivia, and Colombia, are involved in the production and exporting of ammunition. This growth of ammunition trade in Latin America is another propelling factor for the growth of the market in the region.
- The changing laws and regulations pertaining to the use of arms and ammunition by civilians in this region are expected to open up opportunities for the market during the forecast period.
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Key Market Trends
The Military Segment to Dominate the Market During the Forecast Period
The military segment of the market currently holds the highest market share, and it is expected to record the highest CAGR during the forecast period. This region has been strengthening its military front, with a strong focus on military spending, over the years, irrespective of the economic crisis and social and political unrest. Some of the major contributors to the military expenditure growth in the region are Brazil (with 51% of the region's military expenditure in 2019) and Mexico (military spending grew by around 8% in 2019), among others. The procurements of aircraft, armored vehicles, and naval vessels by Latin American countries may generate demand for ammunition and weapon systems. Additionally, the border issues between the United States and Mexico, along with the country's ongoing war on drugs, are generating demand for ammunition from border security forces and special forces in the region.
Brazil was the Largest Market for Ammunition in 2019
In 2019, Brazil held the highest share in the Latin American ammunition market. Brazil is also the largest defense spender in Latin America, which constituted more than 51% of Latin America's total military spending in 2019. Also, in 2019, Brazil's defense expenditure was USD 26.9 billion, which was the highest in Latin America. Brazil has been one of the largest ammunition exporters in Latin America over the past few years, owing to its high production levels of ammunition, with 85% share in ammunition exports. The country increased its arms exports from USD 41 million in 2015 to USD 111 million in 2018. Additionally, in 2019, the Brazilian government relaxed the strict gun laws through a decree, in order to make it easier for Brazilians to buy guns and ammunition. According to the decree, the right to purchase cartridges per year was increased from 50 to 5,000 and to 1,000 for restricted weapons, and gun owners can keep up to four guns in their homes or offices. This step was taken to open up the Brazilian market to firearms and ammunition manufactured outside the country and increase civilian self-defense capability. With such initiatives, the country is expected to support the local players, like IMBEL and CMC, and international players to get a significant share of the market during the forecast period.
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The prominent players in the market are CBC, FAMAE, Aguila Ammunition, IMBEL, and CAVIM. Most of the players in the region are local players and state-owned companies that extend their support to the corresponding local border forces, military, law enforcement, and police officials. The global players, due to their brand value, may have penetration into the market and capture significant share, as there are limited players in the market. At the same time, the ongoing ammunition contracts and their extensions, with the existing local state-owned players, can cause an entry barrier to the foreign players.
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