Global Naval Vessel Maintenance, Repair, and Overhaul (MRO) Market Grows Steadily at a CAGR of 1.90%

Introduction

Naval vessels maintenance repair and overhaul (MRO) is restoring a naval vessel to a state where it can perform its optimum best. The MRO market for naval vessels frequently comprises overhauls, maintenance, inspections, regular checks, repairs, and changes to lengthen a ship's lifespan. Naval warships require ongoing maintenance throughout their lifetimes. Naval vessel MRO has become even more critical in light of the current cuts in military funding by several countries and governments' sluggish buying decisions.

Market Dynamics

Increasing Naval Fleet due to the Growth in Maritime Disputes, Terrorism, and Piracy Drives the Global Market

Expanding hegemony, unilateralism, and power politics have undermined the foundation of the international security system and contributed to several world crises due to the fundamental shifts in the global strategic environment. The capability of the regional naval forces to respond to security threats and perform urgent, critical, and risky strategic tasks are now being improved through several modernization initiatives. This will guarantee that the current naval systems are prepared for battle. Around the Asia-Pacific, China has expanded its maritime footprint and established military outposts on artificial islands. Vietnam, the Philippines, South Korea, Japan, and South Korea have made more assertive regional claims. On the other side, the US has expanded its military operations and naval presence worldwide. As a result, these superpowers' competitors have bolstered their naval fleets to counter the external influence and keep their militaries ready. In the Black Sea, tensions between Russia and Ukraine are also growing. These tensions have increased the procurement of naval warships from the neighboring European nations.

Modernization and Upgradation of the Existing Naval Fleet Creates Tremendous Opportunities

Through mid-life improvements, the lifespans of some navy vessels have been prolonged, and their capabilities have been enhanced. Most governments decide on mid-life changes to extend the useful life of their naval fleets after 15 to 20 years of operation. Due to the rising need to maintain a sizeable naval fleet for varied purposes, many countries have decided to modernize their naval ships and submarines in the middle of their service lives. The Portuguese Navy's two M-frigates that it bought in 2009 will now receive mid-life improvements that will increase their operational life to 2035. The two ships are being upgraded with new weapons, sensors, and communication systems, and the propulsion and power distribution systems are also being looked at. The Dutch shipbuilder Damen is in charge of these overhauls. The building of the second ship ought to be complete by 2022. Mid-life upgrades are also given to the Royal Australian Navy's eight Anzac-class frigates. The work is being done at the BAE Systems Australia facility in Henderson, Western Australia. The eight-ship upgrade projects should be done by the start of 2024.

Regional Analysis

Asia-Pacific is the most significant revenue contributor and is expected to grow at a CAGR of 2.31% during the forecast period. China's sudden retirement of older, single-mission warships in favor of more significant, multi-mission ships outfitted with cutting-edge anti-ship, anti-air, and anti-submarine systems, sensors, and command-and-control networks is the cause of rising demand for the purchase of new naval vessels and expansion of the MRO market. There are already two active aircraft carriers in China, and two more are being constructed at the Jiangnan Shipyard, which is close to Shanghai. Both are expected to be prepared for combat by 2023. This new aircraft carrier is expected to be the first in China to include an integrated electric propulsion system, an advance over ships that were previously constructed in the Soviet Union, and an electromagnetic launch system for aircraft. As a result of such technological advancement, it is projected that demand for better internal MRO capabilities will rise. The Indian Navy has been developing its platforms, systems, sensors, and weaponry as part of the modernization and expansion of its naval forces. Ships are built in Indian shipyards for both public and private use. However, some projects have experienced significant delays and price overruns. The region is also proactive about acquiring naval assets from other nations to fend off superiority.

North America is expected to grow at a CAGR of 1.94% during the forecast period. The U.S. Navy now has over 490 ships in its active service and the reserve fleet, with many more either in the planning and ordering stage or under construction. The Navy and the Department of Defense have been collaborating to develop a more distributed fleet design with a smaller proportion of larger ships, a more significant proportion of smaller vessels, and a new third tier of enormous, autonomous vehicles. Due to its growing fleet and readiness plan, the United States will significantly demand MRO activities during the next ten years.

Additionally, in order to update the Royal Canadian Navy's Halifax-class frigates, the Canadian Navy has also awarded Saab a contract for multi-role Sea Giraffe AMB naval radar antenna kits. The project will last until 2026 and will start in Halifax, Canada, and Gothenburg, Sweden. In addition, the mid-2021 commissioning of HMCS Harry DeWolf has increased the size of Canada's fleet. Another ship of the same class is planned to be commissioned in the final quarter of 2022. These modernization programs will continue to dominate the Canadian MRO market for military vessels throughout the anticipated timeframe.

Key Highlights

• The global naval vessel maintenance, repair, and overhaul (MRO) market was valued at USD 54.67 billion in 2022. It is projected to reach USD 64.76 billion by 2031, growing at a CAGR of 1.90% during the forecast period (2023-2031).
• Based on vessel type, the global naval vessel maintenance, repair, and overhaul (MRO) market is bifurcated into submarines, frigates, corvettes, aircraft carriers, destroyers, and other vessel types. The destroyers segment is the highest contributor to the market and is estimated to grow at a CAGR of 2.25% during the forecast period.

• Based on MRO type, the global naval vessel maintenance, repair, and overhaul (MRO) market is bifurcated into engine MRO, dry dock MRO, component MRO, and modification. The dry dock MRO segment is the highest contributor to the market and is estimated to grow at a CAGR of 1.86% during the forecast period.

• Asia-Pacific is the most significant revenue contributor and is expected to grow at a CAGR of 2.31% during the forecast period.

Competitive Players

Competitive Players

The global naval vessel maintenance, repair, and overhaul (MRO) market’s major key players are General Dynamics Corporation, Huntington Ingalls Industries Inc., Lockheed Martin Corporation, Navantia SA SME, ThyssenKrupp AG, BAE Systems PLC, Naval Group, Rolls-Royce Holdings PLC, Rhoads Industries Inc., Abu Dhabi Ship Building Company, Larsen & Toubro Limited, Damen Shipyards Group, and FINCANTIERI SpA.

Recent Developments

Market News

• In October 2022, Lockheed Martin and Ayar Labs partnered to advance microchip connectivity for next-generation sensory systems.
• In November 2022, HII unveiled REMUS 620 unmanned underwater vehicle.

Segmentation

Global Naval Vessel Maintenance, Repair, and Overhaul (MRO) Market: Segmentation

By Vessel Type

• Submarines
• Frigates
• Corvettes
• Aircraft Carrier
• Destroyers
• Other Vessel Types

By MRO Type

• Engine MRO
• Dry Dock MRO
• Component MRO
• Modification

By Regions

• North America
• Europe
• Asia-Pacific
• LAMEA