Precision Guided Munitions (PGM) Guidance Kits Market Size, Share, and Industry Analysis by Type (GPS Guidance Kit and Integrated GPS/INS Guidance Kit), by Operation Mode (Autonomous and Semi-Autonomous), by End User (Military, Naval, and Airborne), by Application (Guided Rockets, Guided Ammunition, Torpedoes, Tactical Missiles, and Loitering Munitions), and Regional Forecast, 2025-2032

The global precision guided munitions (PGM) guidance kits market is expected to grow, driven by technological advancements, demand for autonomous and precision-hit missiles, rising geopolitical tension, and increasing military budgets. Day by day, precision guided kit technology is growing rapidly with respect to consumer demand and the requirement for advanced weapons. The organizations such as BAE Systems, Halcon, and Northrop Grumman are key players providing the advanced PGM guidance kits. In January 2023, the BAE Systems Annual report mentioned the delivery of an indefinite quantity contract of APKWS® laser-guidance kit with awards worth USD 590 million, including international orders.

According to data provided by the CRS in July 2024, the U.S. military spent around USD 6000 million on selected PGMs in FY2021, around USD 7000 million in FY2022, and around USD 9000 million in FY2023. Upon analyzing this data, the U.S. increased spending on PGMs per year by USD 1000-2000 million, which fueled the precision guided munitions (PGM) guidance kits market from 2024 to 2032.

Precision Guided Munitions (PGM) Guidance Kits Market Driver

Increasing Demand for Defense Advanced Guidance Kits and Rising Defense Spending

Technological advancements in the recent few years in the field of PGM guidance kits, such as the integration of autonomy with the help of ML (machine learning) and AI (artificial intelligence), are transforming modern military operations by providing reliable and precious technology to missile kits. The increasing defense spending and governments' long-term and short-term contracts with private players to provide modern PGM guidance kits are driving market growth.

For instance, in May 2023, BAE systems were awarded USD 72.5 million for three years by the U.S. Army. This contract involves the continuous research and development of precision-guided munitions.   

Precision Guided Munitions (PGM) Guidance Kits Market Restraint

Stringent Regulation and Export Restrictions May Hinder the Market Growth

The government has stringent regulations for manufacturers with respect to getting special licenses and testing approval. To meet these regulations, organizations need to spend more which affects the overall cost of the PGM guidance kit. Organizations also need to follow the export conditions to export the PGM guidance kit, which includes non-transferability, record keeping, and record details (invoices, manifests, and other documents), and need to submit the report and notify any material matter failure to do so is an offense under Sections 31 and Sections 32 of the act and need to face the government bodies. To maintain and follow these things, organizations need more resources and need to spend more time and money. These factors are hindering the market growth.  

Key Insight

The report covers the following key insights:

• Demand for Autonomous and Advanced Precision Guided Munitions 


• Increasing Government Spending in the Defense Sector  

Segmentation

Analysis by Type

By type, the market is fragmented into GPS guidance kit and integrated GPS/INS guidance kit.

In guidance kits integrated with GPS/INS and IR guidance, laser-based technology is widely used. These kits enable high performance and accuracy at extended ranges and compatibility with Paveway FF (form and fit) for certification. The high performance with extended range accuracy and ability to convert unguided bombs into all-weather smart munitions are driving the market growth of the precision-guided munitions guidance kit.

For instance, in May 2024, Boeing Co. is building a laser-guided JDAM smart munitions kit, in addition to an inertial and GPS guidance system, to convert unguided bombs into smart munitions for the U.S. Air Force at a cost of USD 7.5 billion.

Analysis by Operation Mode

Based on operation mode, the market is categorized into autonomous and semi-autonomous.

PGMs guidance kit is capable of turning old missiles into modern automated or semi-automated missiles, depending upon the operation requirement. Automation in each sector is fueling market growth by providing reliable solutions and accurate target-hit capabilities in fully automated operational mode. The PGM guidance kit, which is fully autonomous, is driving the market growth. 

Analysis by End User

The precision-guided munitions guidance kits are used by three major end-users: the military (land), naval, and airborne industries. These industries drive the precision guidance kits market based on environmental conditions, launch platforms, and technological requirements.

The data provided in the table shows the PGM guidance kits used respectively by the end user.

Analysis by Application

By application, the market is divided into guided rockets, guided ammunition, torpedoes, tactical missiles, and loitering munitions.

Guided and Tactical missiles provide greater accuracy and target engagement capabilities, making them leaders in the precision munitions market. These missiles come with an integrated advanced guidance system, such as a GPS/INS Guidance Kit or Laser Guidance Kit, which provides a seamless and reliable solution to defense munitions. The demand for precision-guided munitions guidance kits market is expected to grow, fueled by the applications in the multiplicity of missiles.

For Instance, in July 2023, OKSI received a USD 2 million contract from USSOCOM to complete their Precision Guidance Kit for the 81mm mortar, enabling precise munitions targeting.

Regional Analysis

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Based on region, the market has been studied across North America, Europe, Asia Pacific, and the rest of the world.

North America, particularly the U.S., has the largest defense budget globally, driving significant investments in advanced military technologies, including PGMs. The U.S. Department of Defense allocated approximately USD 30.6 billion for munitions in its Fiscal Year 2024 budget, marking a 12% increase from the previous year. For instance, in August 2023, Raytheon Technologies announced a contract worth USD 200 million with the U.S. Army to supply advanced precision-guided artillery munitions. This contract highlights the ongoing commitment to enhancing U.S. artillery capabilities through modern PGM systems.

The U.S. is dominating the precision-guided munitions guidance kits market due to the presence of key players and a continual rise in defense spending. Technological advancements and the defense sector's need to convert older munitions into precision-guided ones are driving the market. For instance, in June 2024, the U.S. Army asked Northrop Grumman Corp. to equip conventional 155-millimeter artillery shells with precision-guidance kits, converting them into GPS-guided smart munitions.

Countries in the Asia Pacific region are significantly ramping up their defense budgets due to regional tensions involving China, India, and North Korea. This has led to a surge in the demand for advanced PGMs. Nations such as India, Japan, and South Korea are investing heavily in modernizing their armed forces, creating lucrative opportunities for PGM manufacturers.

For instance, in January 2024, India’s Ministry of Defence awarded a contract to Bharat Dynamics Limited for the supply of advanced precision-guided munitions worth USD 500 million. This procurement is part of India's strategy to enhance its military capabilities amid escalating regional tensions.

Key Players

• Lockheed Martin Corporation (U.S.)


• Northrop Grumman Corporation (U.S.)


• Raytheon Technologies (U.S.)


• General Dynamics Corporation (U.S.)


• Boeing Company (U.S.)


• BAE Systems (U.K.)


• Elbit Systems (Israel)


• Israel Aerospace Industries (Israel)


• Kongsberg Gruppen (Norway)


• Leonardo S.p.A. (Italy)


• MBDA (Europe)


• Rheinmetall AG (Germany)


• Saab AB (Sweden)


• Thales Group (France)


• General Atomics (U.S.)

Key Industry Developments: -

• In August 2024, Finland secured a USD 70 million deal for 5,500 M1156A1 Precision Guidance Kits from the U.S. Department of State for artillery ammunition.


• In June 2024, the U.S. Army Contracting Command, based in Newark, New Jersey, placed an order worth USD 8.7 million with the Armament Systems and Ammunition division of Northrop Grumman in Plymouth, Minnesota, for M1156 Precision Guidance Kits for the Army.


• In January 2023, CAES was awarded a contract for more than USD 24 million from Northrop Grumman to provide M-Code GPS antennas for Precision Guidance Kits (PGK).


• In May 2021, Northrop Grumman was awarded a three-year, USD 167.8 million contract modification to supply additional precision guidance kits to the U.S. Army.


• In December 2020, the Turkish Armed Forces received HGK-82 Precision Guidance Kits, developed by TÜBİTAK SAGE and manufactured by ASELSAN.