Tactical UAV Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Tactical UAV market is anticipated to register a CAGR of over 12% during the forecast period (2022-2027).

The impact of the COVID-19 pandemic on the defense industry was considerably low. However, the pandemic led to disruptions in the supply chain in the defense sector, owing to lockdown in some countries, which led to slight delays in the delivery of the final products. Nevertheless, the investments in procurement and development of new tactical UAV systems remained unaffected.

To succeed in critical military missions, real-time information can prove to be the most powerful weapon for warfighters, commanders, and troops to protect themselves. Hence, tailoring their response to the threat requires superior tactical intelligence, surveillance, and reconnaissance. This is generating the demand for tactical UAVs from the armed forces across the world.

The technological advancements and trends in newer generation tactical UAVs are unlikely to stop and will experience accelerating growth in the coming years Several UAV manufacturers are developing newer generation tactical UAVs with advanced payload of electro-optical or infrared sensors, with capabilities to transmit live video and other invaluable information that can empower troops. Demand is also higher for developing ISR payloads that are lightweight and have faster processing capabilities. With the advancement of technology and the growing applications for tactical UAVs, the demand for this technology is expected to increase significantly.

However, the military operations of a country occupy the major portion of the demand for tactical UAVs. The increasingly efficient drone technologies, combined with various functionalities like target designation, mine countermeasures, electronic warfare, undetected surveillance, and reconnaissance are some of the areas, in which tactical UAVs find applications.

Key Market Trends

The Military Segment is Expected to Generate a Significant Demand for Tactical UAVs over the Forecast Period

The increasingly diverse military applications and the requirement for highly effective and objective surveillance and reconnaissance for some of the most important military applications are driving the highest demand from the military applications segment of the market. With increasing global unrest due to the ongoing conflicts between major global military superpowers, several militaries are focusing on expanding the fleets of their tactical UAVs, to successfully counter any adversary actions from enemies. Tactical UAVs are also critical to ensure uninterrupted surveillance at the borders. Due to its diverse application profile, the demand for tactical UAVs has witnessed a multifold increase during the last decade. Hence, several procurements are either underway or being placed to cater to the increased demand from global military forces. For instance, in May 2022, Switzerland announced that it has received the first two of six Elbit Systems’ Hermes 900 unmanned aerial systems, from Israel. The country will receive four other drones by the end of 2023. Furthermore, border patrol and air surveillance are other key areas of application for these drones, driving the demand for tactical drones. In March 2022, Saudi Arabia’s Intra Defence Technologies unveiled its Samoom tactical MALE UAV, with the design to be optimized for intelligence, surveillance, and reconnaissance tasks. The Saudi Armed Forces anticipated to become the first customers for the drone. Such developments are expected to drive the market for tactical UAVs in the military sector in the years to come.

Asia Pacific Region to Experience the Highest Growth during the Forecast Period

The Asia Pacific region is expected to register the highest growth rate and demand during the forecast period due to increasing R&D activities and increasing procurements by countries in the region. The increased purchase of drones for major tactical applications has increased the demand from various countries involved in developing these drones in the region. The rising emphasis on effective border patrol and maritime patrol used by naval forces has increased the demand for tactical drones to be used in these applications. In June 2022, the Taiwan Army purchased 50 short-range tactical UAVs to improve joint battalion reconnaissance capabilities. The Army prepared a budget of NTD 779.98 million (USD 26.5 million) from 2020 to 2023 to buy 14 UAVs in 2022 and 36 sets in 2023. Furthermore, Japan has also resumed its plan to procure Northrop Grumman’s RQ-4 Global Hawk Drone in a deal worth USD 528 Million in January 2022. The RQ-4 Global Hawk is a High-Altitude surveillance drone to be stationed at the ASDF Misawa Air Base in Japan. On the other hand, there is an increasing emphasis on the indigenous development of Tactical UAVs led by various countries in the Asian region. In late 2021, India's indigenous Unmanned Aerial Vehicle (UAV) program Rustom-II achieved an important milestone in its development cycle by reaching an altitude of 25,000 feet and an endurance of 10 hours, which helps it inch closer to the production stage. Such developments are anticipated to accelerate the growth of the market, during the forecast period

Competitive Landscape

The market of tactical UAVs is highly fragmented, with several providers, along with the UAVs that can be used for tactical and ISR missions. The key players in the market are The Boeing Company, Lockheed Martin Corporation, Northrop Grumman Corporation, Elbit Systems Ltd, and AeroVironment Inc.,. These players are all major international companies trying to expand their presence and product portfolio by adopting different strategies. Several UAV manufacturers are developing newer generation tactical UAVs with advanced payloads of electro-optical or infrared sensors and capabilities to transmit live video and other invaluable information that can empower troops. The growing focus on the indigenous development of tactical UAVs is anticipated to help the advent of new players in the market. In recent years, several smaller players have constantly grown their market presence and are expected to play a key role in the future as their technology matures and gains flight hours while building technologies and capabilities made for their local users, including both military and non-military customers.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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