This month’s Hot News reports on new models of Chinese submarines designed and offered for export. That the Chinese company displaying their designs chose Bangkok as the venue is no surprise, given the 2016 Government of Thailand decision to acquire Chinese submarines.
And that sale marked the second “breakthrough” submarine export sale for China, following Pakistan’s decision in 2015 to purchase eight Chinese submarines. The Thailand sale confirms China’s place as a serious competitor to French, German, Swedish and Russian submarines that have led the submarine export market over the past three decades.
AMI’s reporting on the world submarine market over the next 20 years highlights just how valuable the submarine segment is for naval designers, builders, weapons and systems suppliers worldwide. We project that 41 countries will acquire about 313 new submarines in 68 separate programs through 2037.
Most of these are ocean-going platforms above 1000 tons full load displacement (FLD), though it is worth noting that 9 of the 68 submarine programs we track are mini-subs, submersibles and other special purpose platforms. Additionally, 18 of the 68 submarine programs tracked by AMI are for nuclear-powered vessels.
Those 313 hulls represent over US$300B in new platform investment, about one third the total forecasted spend worldwide on all new construction naval platforms. Clearly submarines continue to maintain their place as the most expensive platform type ton-for-ton on today’s world naval market.
A look below at a clip from our database of existing naval ships also shows that 455 submarines and special submersible vehicles are in service now (representing less than 3 percent of naval platforms in service). Even with service life extensions that are keeping submarines in service up to 30-40 years, the projected build rate worldwide will not replace submarines coming out of service one-for-one.
This metric helps explain both the growing cost of manned submarines (with newer technologies, but also the need for each new hull to provide the same presence and capability of more than one of its predecessors). The growing investment in Unmanned Underwater Vehicles (UUVs) also addresses this market reality, as UUVs serve as potential force substitutes and force multipliers in the future underwater domain (a topic I will discuss in more detail next month).
While there are many submarines being acquired over the next two decades, export opportunities in the sector are increasingly competitive. Near term, Saab, TKMS, and Naval Group are all seeking to supply new submarines to Poland for the ORKA program, with a decision expected next year. India’s 75-I program is also looking at an award over the next 12 months, with all the companies noted above potential suppliers, as well as Russian designs.
The submarine export market looks a bit thin in the 2018-20 period, but things open up after that. Between 2020 and 2025, we are tracking opportunities and expected awards in Southeast Asia (Indonesia, Malaysia), South America (Chile), the MENA region (Morocco, UAE) and NATO (Netherlands). All of these programs are expected to be keenly fought for, with traditional European suppliers strong at the high end of the capability/cost trade-space, and new entrants and lower cost suppliers like China expected to pursue similar win strategies that brought them success in Pakistan and Thailand.
Every aspect of the export competition–price, capability (with submarine-launched missiles especially sought), technology transfer, local construction and other content, training and maintenance—is critical to winning in these settings. We are sensitive to this market dynamic and continue to drive our offerings to deliver unique insights. We know you are looking for the edge that ups the probability of a win. We are committed to doing that, both in our market intelligence and our consulting practice.
Existing Naval Market
(Ships Currently in Navy or Coast Guard service)
- Aircraft Carrier
- Amphibious
- Auxiliary
- Corvette
- Cruiser
- Destroyer
- FAC
- Frigate
- MCMV
- OPV
- Patrol Craft
- Submarine
- Totals
Asia & Australia
- 3
- 450
- 319
- 149
- 2
- 89
- 393
- 169
- 170
- 185
- 1968
- 160
- 4057
Caribbean & Latin America
- 1
- 106
- 134
- 29
- 1
- 31
- 45
- 15
- 57
- 1038
- 26
- 1483
Middle East & North Africa
- 137
- 71
- 50
- 2
- 218
- 24
- 30
- 27
- 861
- 42
- 1462
NATO
- 2
- 231
- 372
- 50
- 19
- 98
- 127
- 202
- 90
- 1000
- 86
- 2277
Non-NATO Europe
- 124
- 55
- 8
- 22
- 4
- 46
- 15
- 162
- 5
- 441
Russia
- 1
- 55
- 260
- 28
- 4
- 14
- 110
- 17
- 42
- 39
- 232
- 64
- 866
Sub Saharan Africa
- 30
- 13
- 1
- 33
- 7
- 7
- 27
- 388
- 3
- 509
USA
- 11
- 203
- 147
- 22
- 67
- 19
- 11
- 27
- 188
- 69
- 764
Totals
- 18
- 1336
- 1371
- 315
- 28
- 192
- 905
- 412
- 523
- 467
- 5837
- 455
- 11859