Naval Vessels Market Size - By Vessel Type, By System, By Application and Forecast, 2025 - 2034

Naval Vessels Market Size

The global naval vessels market was valued at USD 110.2 billion in 2024 and is estimated to grow at a CAGR of 6.7% from 2025 to 2034.
 

The naval vessels industry continues to expand as nations invest in advanced missile defense systems and hypersonic weaponry. Security challenges across the globe have intensified the requirements for enhanced offensive and defensive capabilities. Hypersonic missiles offer superior speed and precision in modern naval warfare, prompting substantial fleet modernization programs worldwide. Military organizations are investing in new destroyers and submarines specifically engineered to accommodate these sophisticated missile systems, while upgrading existing vessels with modern capabilities.
 

The integration of hypersonic missile platforms has become essential for strengthening naval defense operations and maintaining strategic deterrence, which drives increased demand for compatible naval vessels. For instance, USS Zumwalt returned to service in December 2024 after 14 months of modifications. The Navy destroyer underwent extensive work to replace the Advanced Gun Systems with launchers for hypersonic missiles. This change transformed the vessel from the original design into a platform for missile operations, supporting the Navy's strategic priorities.
 

The naval vessels market continues to advance with integrated platforms designed for multiple missions. Modern vessels now feature enhanced data-sharing capabilities, enabling seamless coordination between unmanned systems, satellite networks, and air forces. Automation and artificial intelligence integration reduces crew workload while improving operational performance. Advanced submarines incorporate noise reduction technologies and sophisticated sonar systems for effective stealth operations in contested environments. Surface vessels feature streamlined designs that deliver improved maneuverability and rapid response capabilities. These advancements represent the ongoing evolution toward flexible and responsive naval forces.
 

Naval Vessels Market Trends

The naval vessels industry demonstrates increased adoption of modular and adaptable vessel designs to accommodate mission-specific upgrades. Electric propulsion system integration enhances submarine stealth capabilities and operational efficiency in combat scenarios. Rising geopolitical tensions and rapid response requirements have led to substantial investments in advanced stealth platforms across multiple nations. Unmanned and autonomous systems integration in naval vessels enables enhanced surveillance, reconnaissance, and combat support operations while minimizing personnel risks. Recent innovations in power generation systems address both stealth requirements and long-term operational sustainability needs. Modern naval fleet programs now incorporate hybrid designs that combine conventional and advanced technologies, driving market expansion through consistent demand for sophisticated and adaptable naval platforms.
 

Naval Vessels Market Analysis

The naval vessels industry encounters limitations due to substantial development and maintenance costs of advanced vessels, which restricts procurement options for smaller naval forces. These maritime platforms require extensive investments in research and development, along with continuous maintenance of sophisticated technologies such as stealth and hypersonic weapon systems, affecting national defense budgets. Technological complexities and extended construction periods impact fleet modernization initiatives. Market opportunities emerge from rising demand for advanced defense systems, driven by nations strengthening naval capabilities amid geopolitical tensions. The integration of autonomous systems and hybrid power technologies presents efficient and cost-effective solutions for naval platforms. International arms control agreements and environmental regulations influence market progression, with emission standards promoting development of energy-efficient systems. Strategic partnerships between defense contractors and governments continue to shape the advancement and deployment of modern naval systems.
 

Based on system, the market is segmented into marine engine system, weapon launch system, control system, electrical system, communication system, and others. The marine engine system segment held a market share of over 23% in 2024 and is expected to grow at a lucrative pace.
 

• The marine engine systems market is transitioning toward hybrid and electric propulsion technologies, driven by stringent emission regulations and increasing fuel efficiency requirements. Naval vessels, including destroyers and submarines, now incorporate advanced propulsion systems that combine conventional fuel engines with electric motors to enhance operational capabilities.
   
• The marine propulsion industry continues to advance with modular engine systems enabling straightforward upgrades and compatibility across vessel types. Modular designs streamline maintenance procedures and allow naval forces to implement new technologies without complete propulsion system replacements. This approach extends fleet lifecycles and maintains operational effectiveness as defense requirements evolve.
   

Based on application, the naval vessels market is segmented into search and rescue, combat operations, Mine Countermeasures (MCM) operations, coastal operations, and others. The combat operations segment is expected to grow at a CAGR of over 7% till 2034.
 

• The combat operations segment in the naval destroyers and submarines market continues to expand through the integration of modern weapons systems such as hypersonic missiles, directed-energy weapons, and advanced torpedoes. The enhanced precision, range, and destructive capabilities of these systems enable naval forces to effectively address emerging threats in maritime operations.
   
• Autonomous technologies and artificial intelligence (AI) continue to reshape naval combat operations through enhanced threat detection capabilities, improved decision-making processes, and seamless coordination across multiple domains. The integration of Autonomous Underwater Vehicles (AUVs) and Unmanned Surface Vessels (USVs) in high-risk combat zones minimizes personnel exposure while maximizing operational performance and mission success rates.
   

North America dominated the naval destroyers and submarines market and is expected to reach a value of over USD 90 billion by 2034. In the U.S., the naval vessels market is focusing on enhancing capabilities through the integration of hypersonic weapons and autonomous systems.  For instance, in September 2024, the United States Navy commissioned the USS New Jersey as the first coed submarine, marking a significant advancement in naval operations. The submarine stands as the most advanced and fully integrated fast-attack vessel in the fleet, demonstrating the Navy's progress in integrating women into submarine service while strengthening combat capabilities.
 

German market is experiencing substantial investments in advanced technologies to maintain operational readiness and strategic capabilities. The German Navy is modernizing its fleet with new-generation submarines, including the Type 212CD, which features air-independent propulsion (AIP) systems that enhance operational endurance and stealth capabilities.
 

The market in China continues to expand through increased defense budgets and modernization programs of the People's Liberation Army Navy (PLAN). The country strengthens naval capabilities by expanding destroyers, frigate, and submarine fleets. China's emphasis on naval power in the South China Sea has resulted in substantial investments in naval technologies, including advanced combat systems for warships and submarines.
 

Japan's naval defense focuses on building stronger capabilities to address challenges from neighboring countries. The Maritime Self-Defense Force is developing advanced destroyers with improved air defense and information warfare systems. The new vessels will integrate modern technologies including unmanned platforms, energy-based weapons, and electromagnetic projectile launchers.
 

South Korea continues to strengthen naval capabilities through modernization of destroyers and submarines. The nation's fleet expansion prioritizes KSS-III class submarines, equipped with conventional ballistic missile systems and advanced air-independent propulsion technology. The planned submarine deliveries will occur in phases over the next decade to enhance maritime defense capabilities.
 

Naval Vessels Market Share

General Dynamics, Thyssenkrupp, and Naval Group lead the competitive naval vessels industry, where they compete for both defense and commercial contracts. These companies focus on advancing their technology, managing costs, and meeting specific needs of national defense programs. Most contracts in this market run for several years and involve complex vessel construction projects. As the industry moves toward autonomous systems and stealth technologies, companies are investing heavily in developing new propulsion systems, advanced weapons, and environmentally friendly solutions. The competition in the market continues to grow as global security concerns and naval modernization programs drive the demand for advanced vessels.
 

Naval Vessels Market Companies

Major players operating in the naval vessels industry are:

• Austal
• BAE Systems
• Damen Shipyards
• Fincantieri
• General Dynamics
• Hanwha Ocean
• HD Korea Shipbuilding
• Huntington Ingalls
• Larsen & Toubro
• Lockheed Martin
• Naval Group
• ThyssenKrupp
   

Naval Vessels Industry News

• In February 2023, the U.S. Department of Defense (DoD) awarded Gibbs & Cox, a naval architecture firm, a USD 39.6 million contract to support the U.S. Navy’s Future Surface Combatant Force. The contract focuses on aiding the development of the next-generation guided-missile destroyer under the DDG(X) program, alongside exploring other emerging ship concepts and conducting feasibility studies. The DDG(X) is set to replace the Navy’s aging Arleigh Burke-class destroyers (DDG-51) and Ticonderoga-class cruisers (CG-47), addressing gaps in capability and modernizing the fleet to meet future naval requirements.
   
• In August 2024, one of the U.S. Navy’s newest attack submarines, the future USS IDAHO (SSN 799), was launched from General Dynamics Electric Boat’s shipyard into the Thames River. This milestone, known as a “float off,” signifies a key moment in the ship’s construction process, where it transitions from the shipbuilder’s facilities into the water for the first time. The submarine will proceed with final outfitting, testing, and crew certification before becoming operational.
   

This Naval Vessels market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD millions) from 2021 to 2034, for the following segments:

Click here to Buy Section of this Report

Market, By Vessel Type

• Destroyers
• Frigates
• Submarines
• Corvettes
• Aircraft carriers
• Others

Market, By System

• Marine engine system
• Weapon launch system
• Control system
• Electrical system
• Communication system
• Others

Market, Application

• Search and rescue
• Combat operations
• Mine countermeasures (MCM) operations
• Coastal operations
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • Australia 
• Latin America
  • Brazil
  • Mexico
• MEA
  • UAE
  • Saudi Arabia
  • South Africa