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The global hovercraft market size was valued at USD 161.5 million in 2022 and is projected to grow from USD 164.6 million in 2023 to USD 183 million by 2030, exhibiting a CAGR of 1.5% during the forecast period.
A hovercraft, or an Air Cushion Vehicle (ACV), is a type of vehicle that can travel or hover over land or water. It works on the principle of creating a high-pressure cushion of air beneath the vehicle, which lifts it off the surface, allowing it to hover. This air cushion reduces friction and enables the vehicle to glide smoothly over various terrains, including water, mud, ice, or grass. Hovercraft are used for transportation, military applications, search and rescue operations, and in some recreational activities.
Air cushion vehicles use a combination of lift and propulsion systems. The lift system consists of a large fan that creates high-pressure air under the craft, forming an air cushion. This cushion lifts the amphibious craft off the ground or water surface. The propulsion system typically includes one or more engines that power fans or propellers for forward and directional movements. Over the years, many designs and improvements have been introduced to make air cushion vehicles more efficient and eco-friendly. Some modern amphibious craft incorporate hybrid or electric propulsion systems to minimize fuel consumption and emissions.
Supply Chain Issues Led to Slow Market Growth during COVID-19 Pandemic
Similar to other markets, the market also relies on a global supply chain for various components and materials. Disruptions caused by the COVID-19 pandemic, including factory closures and transportation restrictions, led to delays in the manufacturing and delivery of air cushion vehicles and their components. The outbreak also reduced the demand for many transportation solutions, including ACVs. Travel restrictions, lockdowns, and decreased tourism activities affected the need for air cushion vehicles in certain regions. Several ACV development projects were delayed or put on hold as a result of economic uncertainties and shifting priorities of organizations during the pandemic. As restrictions were lifted, the market began to gain momentum and returned to normalcy in the latter half of 2020.
Design Improvements and Use of Hybrid & Electric Propulsion to Propel Market Growth
Manufacturers of air cushion vehicles are exploring hybrid and electric propulsion systems to minimize fuel consumption and emissions. Electric hovercraft are being developed for applications where environmental concerns and fuel efficiency are paramount. Automation and autonomy are becoming increasingly important in the industry. Researchers and manufacturers are working on autonomous navigation systems to enhance the air cushion vehicle's safety and operational capabilities, especially for military and surveillance applications.
Rising emphasis on making hovercraft more fuel-efficient and eco-friendly will drive the hovercraft market share. The measures taken in this regard include innovations in hull design, propulsion systems, and materials to reduce drag and energy consumption. Manufacturers are increasingly considering the environmental sustainability of their designs. This involves the use of eco-friendly materials, reduction of emissions, and exploring renewable energy sources for propulsion. Air cushion vehicle manufacturers are offering more customization options to meet the specific needs of customers, whether for military, commercial, or recreational purposes.
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Rising Global Military Expenditure to Drive Product Sales
Increasing military expenditures across the globe have become a notable trend in recent years due to various factors and regional dynamics. Heightened geopolitical tensions between major economies, such as the U.S., China, and Russia, have increased military spending as nations seek to maintain or enhance their military capabilities in response to perceived threats. Ongoing conflicts and instability in regions, such as the Middle East & Africa, Eastern Europe, and the South China Sea, have prompted countries in those regions to bolster their military forces and invest in defense.
Some regions have been part of the race to acquire arms, where neighboring countries increase their military spending in response to each other's actions, leading to a cycle of heavy defense expenditures. Many nations have introduced military modernization programs to upgrade their equipment, technology, and infrastructure. Governments are allocating more resources to the defense sector in alignment with their national security priorities and strategic interests. These trends, as mentioned above, will drive hovercraft market growth during the forecast period.
Adoption of Safe Transportation Options for Search and Rescue (SAR) Operations will Propel Market Growth
The severity and frequency of natural disasters, including floods, hurricanes, earthquakes, wildfires, and tsunamis, have been on the rise. These events often result in people needing rescue from hazardous conditions. Climate change-related events, such as more intense storms and a rise in sea level, can increase the need for Search and Rescue (SAR) operations, especially in coastal and flood-prone areas. Search and rescue operations are crucial for responding to maritime accidents, shipwrecks, plane crashes, and emergencies at sea.
Accidents in industrial settings, such as mining, construction, and offshore drilling, can necessitate search and rescue operations to rescue trapped workers. Remote and inaccessible areas may require search and rescue teams for medical evacuations of injured or ill individuals who cannot be reached easily. In regions experiencing ongoing conflicts or humanitarian crises, search and rescue teams may be involved in rescuing civilians caught in dangerous situations. All these operations will positively influence market growth during the forecast period.
High Costs Associated with Air Cushion Vehicles May Restrain Market Growth
Air Cushion Vehicles can be expensive to manufacture and purchase, making them less accessible to some potential buyers. High initial costs can be a barrier, especially for smaller operators and governments with budget constraints. ACVs tend to have higher operating costs compared to other modes of transportation. Factors such as high fuel consumption, regular maintenance, and the requirement for skilled personnel can increase these expenses. Traditional ACVs are not known for their fuel efficiency, and their environmental impact is a concern. Addressing the problem of fuel consumption and emissions is essential to meet modern environmental standards.
Hovercraft engines can be noisy, which can limit their use in certain areas, especially near residential zones and wildlife habitats. The possibility of using quieter propulsion systems is being explored to mitigate this issue. Operations of ACVs can be weather-dependent, particularly in adverse conditions, such as strong winds or extreme cold. Unpredictable weather patterns can disrupt schedules and impact the vehicle’s safety. ACVs require a stable infrastructure for operation, including hover pads, docks, or landing areas. Developing and maintaining this infrastructure can be costly and challenging in remote or undeveloped regions, thereby restricting market growth.
Above 8 Segment to Gain Traction Owing to Rising Military Operations and Increases Passenger Capacity
Based on passenger capacity, the market is categorized into up to 4, 5 to 8, and above 8.
The above 8 segment is expected to dominate the market during the forecast period. ACVs with a large passenger capacity are used for troop transport, reconnaissance, and various specialized missions in the military. These are designed to operate on both water and land, allowing them to access a wide range of terrains, including marshes, rivers, swamps, beaches, and ice. This factor makes them ideal for military operations. These air cushion vehicles have a high payload capacity and can carry troops, equipment, and vehicles, making them useful for rapid deployment and providing logistics support.
Air cushion vehicles with up to 4 passenger capacities are typically used for recreational activities, such as family outings, adventures, and leisure activities. They are often used in locations with marshy or shallow waters, offering a unique and fun way to explore such environments. These smaller air cushion vehicles can be valuable in search & rescue operations, especially in areas with limited access or difficult terrain. Researchers and conservationists use these ACVs to access and study ecosystems in remote or ecologically sensitive areas.
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Above 10 m Segment to Dominate Due to its use in Several Applications with Increasing Coastal Tourism
By length, the market is categorized into up to 10 m and above 10 m.
Air cushion vehicles that are longer than 10 meters will hold the majority of the market share within the forecast period and are generally used for passenger transport and tourism. These types of ACVs are used in areas where a larger passenger capacity is required, such as ferry services, tours in coastal or wetland areas, and passenger transport in regions with deep or shallow waters. The growing coastal tourism will drive the segment’s growth during the forecast period. Coastal areas often feature natural landscapes, such as beaches, cliffs, and ocean views. Beaches provide opportunities for numerous recreational activities that appeal to travelers seeking fun and adventure. This factor will bolster the segment’s growth over the next few years.
ACVs up to 10 meters in length are used for scientific expeditions and amphibious explorations. Scientists and researchers use these small ACVs to access remote or challenging research sites, especially in regions with waterlogged or swamp-like conditions. Few organizations and educational institutions use small ACVs for training purposes, teaching individuals how to operate and navigate the vehicles safely.
Commercial Segment to Lead with Increasing Use in Defense Sector
Based on application, the market is divided into recreational & travel and commercial. Commercial segment will dominate the market during the forecast period. In 2022, the total global military expenditure increased by more than 3%. Russia’s invasion of Ukraine and tensions in East Asia have increased governments’ spending in the defense sector. Various countries are enhancing their military strength in response to a deteriorating security environment. Rising geopolitical tensions and worsening trade & political relations between countries will compel them to enhance maritime security, thereby driving the defense sector’s spending and augmenting the market’s growth in the future.
ACVs are popular in the recreational segment as well, offering a unique and thrilling experience for adventure enthusiasts. Competitive ACV racing has gained a major following in various regions. Racers drive ACVs through courses on water and land, showcasing speed and agility. These events often attract adrenaline-seekers and fans of motorsports. In regions with frozen lakes and rivers, ACVs are used to reach ice fishing spots quickly and efficiently. These ACVs offer mobility on ice and prevent the need for drilling multiple holes.
Based on region, the market is categorized into North America, Europe, Asia Pacific, and the rest of world.
North America Hovercraft Market Size, 2022 (USD Million)
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North America dominates the market. The regional market’s growth is characterized by a strong defense sector. The U.S. has one of the best, formidable, and technologically advanced defense sectors. It has one of the largest defense budgets in the world. Consistent funding by the government supports the development, procurement, and maintenance of cutting-edge military capabilities. The U.S. Navy is known for its ability to conduct amphibious operations including transporting and deploying Marines and their equipment for a wide range of missions. Such missions require tactically sound ACVs for logistical support.
Asia Pacific market was valued at USD 41.9 million in 2022 and will reach USD 49.3 million by 2030. Asia has experienced several longstanding regional conflicts and territorial disputes, such as the South China Sea disputes, the India-Pakistan conflict, and tensions in the Korean Peninsula. These tensions are driving countries to invest in their military capabilities to respond to potential threats. Given the importance of maritime trade routes in Asia, many countries in the region are investing in naval military capabilities to protect their maritime interests and maintain control over crucial sea lanes. Such trends will drive the adoption of air cushion vehicles over the forecast period.
Europe has several ACV racing competitions and leagues that organize events throughout the year. These events provide opportunities for both amateur and professional racers to showcase their skills. ACV races in Europe are conducted in various formats, such as circuit racing, endurance races, and sprint races. These races take place on water, ice, or mixed terrain courses, depending on the location and season.
Diversification of Product Portfolios will Aid Companies in Gaining Competitive Advantage
Key players in the market are implementing strategies, such as product diversification, expansion of sales network, and forming partnerships & collaborations to gain a strong foothold in the market. Such initiatives will help these major companies increase their customer base significantly. Technological advancements in hovercraft will drive the market growth over the next few years.
The market research report provides a detailed analysis of the market. This analysis focuses on key factors, such as major companies, product types, and leading product applications. Moreover, the report offers insights regarding the latest market trends and highlights top industry developments. In addition to the factors mentioned above, the report contains several factors that have contributed to the market’s growth in recent years.
An Infographic Representation of Hovercraft Market
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CAGR of 1.5% from 2023 – 2030
Value (USD Million)
By Passenger Capacity
Fortune Business Insights says that the market size was valued at USD 161.5 million in 2022 and is projected to register USD 183 million by 2030.
The market is expected to register a CAGR of 1.5% during the forecast period of 2023-2030.
Rising naval military spending across the world is set to propel the market expansion.
North America led the market in 2022 and is predicted to exhibit appreciable growth over the forecast period.
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