The Southeast Asia Defense Market is projected to grow with a CAGR of more than 5% during the forecast period.

  • The increasing military spending of the countries in the region is driving the procurement of new military systems and equipment to strengthen their military capabilities.
  • The modernization of old and aging military equipment in the region is anticipated to propel the procurement of newer generation equipment and maintenance, repair, and overhaul (MRO) of old equipment.
  • The market is fragmented with many players in the market that support the defense sector in southeast Asian countries. The development of new products as well as partnerships of domestic and international players in the region is anticipated to bolster the growth prospects of the companies in the region.



Key Market Trends

Vehicles Segment is Anticipated to Dominate the Market

Vehicles segment of the market currently dominates the market and is expected to continue its dominance during the forecast period. This is mainly due to the fleet modernization of various countries to enhance the combat and support capabilities across land, air, and sea. Various countries like the Philippines, Thailand, and Singapore among others are expected to receive new aircraft and naval vessel deliveries in the coming years. Earlier in 2019, Singapore announced its plans to procure four Lockheed Martin F-35s, with options for an additional eight aircraft, and later in January 2020, the US government approved the purchase of F-35B short takeoff and landing jets for Singapore. Similarly, the Philippines is also considering various fighter jets to replace its current fleet of Korean Aerospace Industries (KAI) FA-50PH Fighting Eagle light-strike fighters. Eurofighter Typhoon, Lockheed Martin F-16 Fighting Falcon, Sukhoi Su-30 Flanker, and Saab Gripen are being considered. The Philippine Navy is also adding warships and frigates into its fleet to enhance the naval capabilities. The aforementioned factors are anticipated to accelerate the growth of the segment in the coming years.

Thailand is Anticipated to Witness Significant Growth During the Forecast Period

Thailand is one of the major military spenders in the Southeast Asia region, which has increased its military spending by 12.69% during the 2015 – 2019 period. In 2019, the country’s military expenditure was USD 7,315 million, which was 1.29% of the country’s GDP. Thailand has been purchasing military equipment to modernize and upgrade military capabilities against threats like border disputes and domestic terrorism, among others. In 2017, the government announced a 10-year Modernization Plan for the armed forces, according to which the country plans to enhance the research and development in the country as well as procure munitions, weapons, electronic and communication devices, and military vehicles. For instance, the country is in plans to replace its current fleet of F-16A/B and F-16A/B Block 15s in four phases of six new fighters each, and this is expected to take place between 2023-2033. Also, under this modernization plan, the country plans to develop the domestic defense industry and increase military spending to 2% of the country’s GDP. Such factors are anticipated to bolster the growth of the market.

Competitive Landscape

The Southeast Asia defense market is fragmented with many companies providing various military equipment like armored vehicles, naval vessels, and aircraft as well as communication systems, infantry weapons, and ammunition, missiles, etc. to the countries in the region. Some of the prominent players in the market are Lockheed Martin Corporation, Elbit Systems Ltd., L3Harris Technologies Inc, Singapore Technologies Engineering Ltd, and Rostec. The increasing investment of the companies into the development of new products is anticipated to help the companies increase their share in the market in the coming years. Also, with the support of local governments, companies are constructing new facilities in the region to manufacture military equipment at low costs. For instance, Tisas Trabzon Silah Sanayi, a Turkish weapons manufacturer signed an agreement to establish a firearms manufacturing and assembly plant in Malaysia. The company entered into a partnership with IDC Technologies, a Malaysian company for technology transfer, and to increase the penetration of the company in the region. Such factors are anticipated to help the growth of the companies in the region.

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