The SSK submarine market has been forecast to rise at a compound annual growth rate (CAGR) of 2.4% through to 2016, driven by the increase in defence budgets across the globe, and the increase in collaborations between countries.
SSK was the United States Navy hull classification symbol for a diesel-electric submarine specialised for anti-submarine duties. SS indicated that the vessel was a submarine, and the K suffix that it was a hunter-killer. The United States Navy does not currently operate any submarines of this type, and so the designation is inactive.
One of the major growth drivers is the increasing defense budgets in a number of countries. Governments in countries such as China, India, Brazil, Saudi Arabia, Russia, the United Arab Emirates, South Korea, and Spain are expected to increase the share of their defence budgets to double digits by 2015.
Collaborations between countries will help to reduce the cost associated with development programs and enable partnering countries to gain market share. Furthermore, developing countries are building their naval product manufacturing capabilities by acquiring technologies from companies that have capabilities in this industry, which will drive the market in the future.
The submarine industry requires skilled labour to design submarines and provide maintenance and upgrades throughout its operational life. However, budget cuts have led to a shortage of skilled professionals such as reactor engineers and scientists, causing a resource crunch within the industry.
A significant number of countries such as the US, the UK, Germany, France, and India are currently in the process of replacing their existing fleet of submarines. Most of these submarines are being retired as they have reached the end of their operational cycle.
Additionally, Soviet era submarines currently in use by countries such as Russia, India, and China need to be replaced. The demand for modern submarines creates a lucrative opportunity for suppliers across the world.
Key players currently dominating the SSK submarine market include DCNS S.A., Kawasaki Heavy Industries, Mitsubishi Heavy Industries Ltd., and ThyssenKrupp AG.
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