This report is the result of SDI's
extensive market and company research covering the German defense industry, and
provides detailed analysis of both historic and forecast defense industry
values including key growth stimulators, analysis of the leading companies in
the industry, and key news.
Introduction and Landscape
Why was the report written?
The Future of the German Defense
Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018
offers the reader an insight into the market opportunities and entry strategies
adopted by foreign original equipment manufacturers (OEMs) to gain market share
in the German defense industry.
What is the current market landscape
and what is changing?
Germany is one of the top 10 defense markets across the world, with a defense budget allocation of US$43.5 billion in 2013. Primarily driven by military modernization programs such as the Hercules project and involvement in peacekeeping operations, the country's defense expenditure is expected to register a CAGR of -0.42% during the period 2014-18; this decrease in spending is expected to be primarily due to the European debt crisis, which will force Germany to cut its defense budget over the forecast period. The country's well established defense industry not only satisfies its defense requirements but also makes the country the third largest defense exporter in the world.
What are the key drivers behind
recent market changes?
Investments in infrastructure and
IT, the A400M development program, and peacekeeping operations, are projected
to drive defense spending over the forecast period. The Bundeswehr, Germany's
unified armed forces, is currently implementing a US$9.3 billion infrastructure
and information technology program; known as the Hercules project, the program
is expected to continue to 2017 and will establish decentralized systems at
more than 1,500 locations in Germany, including 140,000 work stations, 7,000
mainframe computers, 300,000 telephones, and 15,000 cell phones. Under this
project, The Bundeswehr will modernize its information technology
infrastructure managing local and international data networks and voice
networks.
What makes this report unique and
essential to read?
The Future of the German Defense
Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018
provides detailed analysis of the current industry size and growth expectations
from 2014 to 2018, including highlights of key growth stimulators. It also
benchmarks the industry against key global markets and provides a detailed
understanding of emerging opportunities in specific areas.
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Key Features and Benefits
The report
provides detailed analysis of the current industry size and growth expectations
from 2014 to 2018, including highlights of key growth stimulators, and also
benchmarks the industry against key global markets and provides a detailed
understanding of emerging opportunities in specific areas.
The report
includes trend analysis of imports and exports, together with their
implications and impact on the German defense industry.
The report
covers five forces analysis to identify various power centers in the industry
and how these are expected to develop in the future.
The report
allows readers to identify possible ways to enter the market, together with
detailed descriptions of how existing companies have entered the market,
including key contracts, alliances, and strategic initiatives.
The report
helps the reader to understand the competitive landscape of the defense
industry in Germany. It provides an overview of key defense companies, both
domestic and foreign, together with insights such as key alliances, strategic
initiatives, and a brief financial analysis.
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Key Market Issues
The German
MoD announced its plans to cut its defense budget by 2016 and is expected to
reduce its expenditure on military aircraft and other arms contracts over the
next five years. The budget cuts will result in reductions in the procurement
of helicopters, heavy lift military transport aircraft, tanks, and jet
fighters. The Bundeswehr is planning not to buy the last tranche of 37
Eurofighter aircraft and Germany is expected reduce its orders of Puma tanks by
120, 40 NH-90 naval helicopters, and also 40 Tiger multi-role attack
helicopters. In addition, the MoD has announced plans to substantially reduce
the size of its troop force by temporarily suspending its national conscription
program, in order to make further cuts. The country expects to save US$1.31
billion during this period as a result of the reduction in armed forces and
civilian support staff.
Over the
forecast period the German MoD is expected to focus on the suspension of
national conscription and restrict defense procurements to core military
hardware only. Furthermore, Germany's intention to align its defense
capabilities with those of the EU, coupled with the decommissioning of its
existing defense systems, including 15 Trans all cargo aircraft, 100 Tornado
jet fighters, and a significant number of frigates from its navy, may also pose
challenges to defense suppliers.
Key Highlights
The
Bundeswehr, Germany's unified armed forces, is currently implementing a US$9.3
billion infrastructure and information technology program; known as the
Hercules project, the program is expected to continue to 2017 and will
establish decentralized systems at more than 1,500 locations in Germany,
including 140,000 work stations, 7,000 mainframe computers, 300,000 telephones,
and 15,000 cell phones. Under this project, The Bundeswehr will modernize its
information technology infrastructure managing local and international data
networks and voice networks. The country is currently in the process of
procuring Eurofighter aircraft. With an original order of 180 aircraft, Germany
received the delivery of the 100th aircraft in February 2013; however, the
Bundeswehr cancelled the purchase of the last tranche of 37 Eurofighters in
November 2012, reducing the pending deliveries to 43 aircraft. Germany is also
participating in co-developing the Airbus A400M, a four-engine turboprop
military transport aircraft, with seven other countries. The program has
incurred significant cost overruns and long delays in delivery; therefore,
Airbus has requested additional funding from participating countries to ensure
its completion.
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Growing extreme
right-wing and left-wing activities in the country, mainly but not restricted
to states in former East Germany, have been posing an internal security threat.
Conflicts between neo-Nazis and opposition groups supported by politicians have
been increasing in recent years, especially around the May 1st demonstrations
every year. Incidents such as neo-Nazi killings by the Zwickau cell and flash
protests by 'Immortals', the anti-globalization and anti-capitalist group, pose
serious threats to the country's internal security, whose competencies are
shared and divided between federal and state levels. Germany's federal and
state governments are expected to increase their spending for countering these
internal conflicts.
During
2008 - 2012, air defense systems accounted for 58.7% of Germany's total defense
imports, followed by missiles (27.1%) and armored vehicles (8.0%); however, the
country did not imported air defense systems in 2011 and 2012, and missiles and
armored vehicles dominated the defense imports in these two years.
Related Report:
Global Defense Industry Suppliers - CEO Business Outlook Survey 2013-2014: http://www.marketresearchreports.biz/analysis/165023
“Global Defense Industry Suppliers: CEO Business Outlook Survey
2013-2014 ” is a new report by Strategic Defense Intelligence that
provides the reader with a definitive analysis of the business outlook
in the global defense suppliers industry, and explores how key industry
dynamics are set to change during 2013-2017. This report gives access to
the key regions projected to witness the most defense opportunities,
RandD budget outlook, future expectation from suppliers, business
challenges, and key investment areas for the future. The report also
identifies the emerging trends in the Aftermarket Service Support and
MRO Area, MandA, and staff hiring. It not only grants access to the
opinions and strategies of business C-level decision makers and
competitors, but also examines their actions surrounding business
priorities, as well as access to information categorized by region and
company size.
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