The German Defense Sector Market Opportunities And Entry Strategies, Analyses And Forecasts
Summary
Summary
This report offers insights into the market opportunities and entry strategies adopted by foreign OEMs
(original equipment manufacturers) to gain a market share in the German defense industry. In
particular, it offers in-depth analysis of the following:
Market opportunity and attractiveness: detailed analysis of the current industry size and
growth expectations during 20102015, including highlights of the key growth stimulators. It also
benchmarks the industry against key global markets and provides detailed understanding of
emerging opportunities in specific areas.
Procurement dynamics: trend analysis of imports and exports, together with its implications and impact on the German defense industry.
Industry structure: five forces analysis to identify various power centers in the industry and how these are likely to develop in the future.
Market entry strategy: analysis of possible ways to enter the market, together with detailed descriptions of how existing players have entered the market, including key contracts, alliances, and strategic initiatives.
Competitive landscape and strategic insights: analysis of 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.
Business environment and country risk: a range of drivers at country level, assessing business environment and country risk. It covers historical and forecast values for a range of indicators, evaluating business confidence, economic performance, infrastructure quality and
availability, labor force, demographics, and political and social risk.
Scope
analysis of Defense industry market size from 2004 through 2009 and forecasts till 2015
analysis of defense budget allocation
Benchmarking with key global markets
Market opportunities
Defense procurement dynamics
Industry dynamics
Market entry strategy
Competitive landscape and strategic insights
Business environment and country risk
Reasons To Buy
Gain insight into German defense industry with current, historic and forecast market values
Get insight on market opportunity and attractiveness
Get insight on industry procurement dynamics
Gain insight on industry structure
Gain insight into the regulations governing the German defense industry and the potential market entry strategies with an expert analysis of the competitive structure
Identify top companies of the German defense industry along with profiles of all those companies
Key Highlights
With few internal or external threats, German defense policy is largely aligned towards the prevention and containment of crises and conflicts. Despite this, the countrys defense spend which is valued at US$43.5 billion in 2009, spends as much as US$14.4 billion on procurement of military hardware. Furthermore, the country has a mature domestic sector, capable of fulfilling both domestic and export requirements. Nevertheless, Germanys participation in peacekeeping activities and in the development of advanced military transport aircraft is expected to support the growth of its defense industry over the forecast period.
With no exclusive organizations focused on fighting terrorism, Germanys homeland security expenditure is largely concerned with the security of its border and the international threat of terrorism. Indeed, while Germany is expected to procure biometric identification systems to prevent illegal immigration by increased efficiency in border patrol, attractive opportunities are expected to emerge in the areas of UAVs (unmanned aerial vehicles), all-terrain vehicles, satellite radar systems and, if it were to pull out of its ongoing A400M development program, military transport aircraft
Keywords
Defense, Germany, Heckler & Koch, MAN Nutzfahrzeuge, Eurocopter, ESG Elektroniksystem- und Logistik, Diehl Stiftung, ThyssenKrupp Marine Systems, Thales Deutschland, EADS, Airbus Military, MBDA, Eurofighter Jagdflugzeug, Rheinmetall, , , , , , , , , , , , , , , ,
Table of Contents :
1 Introduction
1.1 About this Report
1.2 Definitions
1.3 Methodology
1.3.1 Secondary research
1.3.2 Primary research
1.3.3 Conventions
1.4 ICD Research Terrorism Index
1.5 About ICD Research Defense Intelligence Center
2 Executive Summary
3 Market Attractiveness and Emerging Opportunities
3.1 Defense Market Size and Forecast
3.1.1 German annual defense expenditure to reach US$42.6 billion by 2015
3.1.2 Defense expenditure driven by factors such as security of EU, peacekeeping initiatives and A400M development program
3.1.3 Defense expenditure as a percentage of GDP expected to decrease
3.2 Analysis of Defense Budget Allocation
3.2.1 Revenue expenditure expected to decline with troop downsizing
3.2.2 Air force receives largest capital expenditure allocation
3.2.3 Capital expenditure for army is expected to decrease
3.2.4 Capital expenditure of air force is expected to decrease
3.2.5 Naval capital expenditure is set to decrease
3.2.6 Research and development expenditure is expected to decrease
3.3 Homeland Security Market Size and Forecast
3.3.1 Homeland security budget estimated at US$4.8 billion for 2010
3.3.2 Preventive defense measures used to counter terrorism threat
3.3.3 Germany has a moderate threat of terrorism
3.4 Benchmarking with Key Global Markets
3.4.1 German defense budget growth expected to be negligible over the forecast period
3.4.2 Germanys rank of the sixth largest defense spender set to decline
3.4.3 Germany allocates 1.3% of its GDP for defense expenditure
3.5 Market Opportunities: Key Trends and Growth Stimulators
3.5.1 Demand for heavy lift helicopters to increase
3.5.2 Increased spending on Interactive Defense and Attack System for Submarines weapons
3.5.3 Demand for medium altitude long endurance UAVs will increase
3.5.4 Germany plan to procure armored vehicles will increase business opportunities
4 Defense Procurement Market Dynamics
4.1 Import Market Dynamics
4.1.1 Network centric warfare capability for peacekeeping initiatives drive defense imports
4.1.2 Netherlands and the US are Germanys main arms suppliers
4.2 Export Market Dynamics
4.2.1 Superior defense technology and good trade relationships with other countries continue to drive defense exports
4.2.2 Germanys arms exports grew strongly during 200509
4.2.3 Germany is the third largest arms exporter globally
4.2.4 Ships and armored vehicles are the main exported defense products
5 Industry Dynamics
5.1 Five Forces Analysis
5.1.1 Bargaining power of supplier: low
5.1.2 Bargaining power of buyer: high
5.1.3 Barrier to entry: low
5.1.4 Intensity of rivalry: low
5.1.5 Threat of substitution: low
6 Market Entry Strategy
6.1 Market Regulation
6.1.1 Investment policy promotes 100% foreign direct investment in defense sector
6.2 Market Entry Route
6.2.1 Foreign defense OEMs form large conglomerates to enter the market
6.2.2 Foreign OEMs establish subsidiaries or form joint ventures to enter the industry
6.3 Key Challenges
6.3.1 The European debt crisis will negatively affect defense procurements
6.3.2 Modernization of military through downsizing existing systems and personnel
6.3.3 German arms exports to large defense markets outside EU are minimal
7 Competitive Landscape and Strategic Insights
7.1 Competitive Landscape Overview
7.1.1 Foreign OEMs have strong collaborations with domestic defense firms
7.2 Key Domestic Companies
7.2.1 Heckler & Koch: overview
7.2.2 Heckler & Koch: products and services
7.2.3 Heckler & Koch: recent announcements and strategic initiatives
7.2.4 Heckler & Koch: alliances
7.2.5 Heckler & Koch: recent contract wins
7.2.6 Heckler & Koch: financial analysis
7.2.7 MAN Nutzfahrzeuge: overview
7.2.8 MAN Nutzfahrzeuge: products and services
7.2.9 MAN Nutzfahrzeuge: recent announcements and strategic initiatives
7.2.10 MAN Nutzfahrzeuge: alliances
7.2.11 MAN Nutzfahrzeuge: recent contract wins
7.2.12 MAN Nutzfahrzeuge: financial analysis
7.2.13 Eurocopter: overview
7.2.14 Eurocopter: products and services
7.2.15 Eurocopter: recent announcements and strategic initiatives
7.2.16 Eurocopter: alliances
7.2.17 Eurocopter: recent contract wins
7.2.18 Eurocopter: financial analysis
7.2.19 ESG Elektroniksystem- und Logistik: overview
7.2.20 ESG Elektroniksystem- und Logistik: products and services
7.2.21 ESG Elektroniksystem- und Logistik: recent announcements and strategic initiatives
7.2.22 ESG Elektroniksystem- und Logistik: alliances
7.2.23 ESG Elektroniksystem- und Logistik: recent contract wins
7.2.24 ESG Elektroniksystem- und Logistik: financial analysis
7.2.25 Diehl Stiftung: overview
7.2.26 Diehl Stiftung: products and services
7.2.27 Diehl Stiftung: recent announcements and strategic initiatives
7.2.28 Diehl Stiftung: alliances
7.2.29 Diehl Stiftung: recent contract wins
7.2.30 Diehl Stiftung: financial analysis
7.2.31 ThyssenKrupp Marine Systems: overview
7.2.32 ThyssenKrupp Marine Systems: products and services
7.2.33 ThyssenKrupp Marine Systems: recent announcements and strategic initiatives
7.2.34 ThyssenKrupp Marine Systems: alliances
7.2.35 ThyssenKrupp Marine Systems: recent contract wins
7.2.36 ThyssenKrupp Marine Systems: financial analysis
7.2.37 Thales Deutschland: overview
7.2.38 Thales Deutschland: products and services
7.2.39 Thales Deutschland: recent announcements and strategic initiatives
7.2.40 Thales Deutschland: alliances
7.2.41 Thales Deutschland: recent contract wins
7.2.42 Thales Deutschland: Financial Analysis
7.2.43 EADS: overview
7.2.44 EADS: product and services
7.2.45 EADS: recent announcements and strategic initiatives
7.2.46 EADS: alliances
7.2.47 EADS: recent contract wins
7.2.48 EADS: financial analysis
7.2.49 Airbus Military: overview
7.2.50 Airbus Military: products and services
7.2.51 Airbus Military: recent announcements and strategic initiatives
7.2.52 Airbus Military: alliances
7.2.53 Airbus Military: recent contract wins
7.2.54 Airbus Military: financial analysis
7.2.55 MBDA: overview
7.2.56 MBDA: products and services
7.2.57 MBDA: recent announcements and strategic initiatives
7.2.58 MBDA: alliances
7.2.59 MBDA: recent contract Wins
7.2.60 MBDA: financial analysis
7.2.61 Eurofighter Jagdflugzeug: overview
7.2.62 Eurofighter Jagdflugzeug: products and services
7.2.63 Eurofighter Jagdflugzeug: recent announcements and strategic initiatives
7.2.64 Eurofighter Jagdflugzeug: alliances
7.2.65 Eurofighter Jagdflugzeug: recent contract wins
7.2.66 Eurofighter Jagdflugzeug: financial analysis
7.2.67 Rheinmetall: overview
7.2.68 Rheinmetall AG: products and services
7.2.69 Rheinmetall: recent announcements and strategic initiatives
7.2.70 Rheinmetall: alliances
7.2.71 Rheinmetall: recent contract wins
7.2.72 Rheinmetall: financial analysis
8 Business Environment and Country Risk
8.1 Business Confidence
8.1.1 Business Confidence Index
8.1.2 Market Capitalization Trend The Frankfurt Stock Exchange (FWB), Germany
8.1.3 FDI Inflows by Sector
8.1.4 Deployment of Credit by Sector
8.2 Economic Performance
8.2.1 GDP at Constant Prices
8.2.2 GDP per Capita at Constant Prices
8.2.3 GDP at Current Prices
8.2.4 GDP Per Capita at Current Prices
8.2.5 GDP Split by Key Segments
8.2.6 Agriculture Agriculture Net Output at Current Prices (Local Currency)
8.2.7 Agriculture Agriculture Net Output at Current Prices (US Dollar)
8.2.8 Agriculture Agriculture Net Output at Current Prices as Percentage of GDP
8.2.9 Manufacturing Manufacturing Net Output at Current Prices (Local Currency)
8.2.10 Manufacturing Manufacturing Net Output at Current Prices (US Dollar)
8.2.11 Manufacturing Manufacturing Net Output-Current Prices as Percentage of GDP
8.2.12 Manufacturing Mining, Manufacturing, and Utilities Net Output at Current Prices (Local Currency)
8.2.13 Manufacturing Mining, Manufacturing, Utilities at Current Prices (US Dollars)
8.2.14 Manufacturing Mining, Manufacturing, Utilities at Current Prices, as Percentage of GDP
8.2.15 Construction Construction Net Output at Current Prices, (Local Currency)
8.2.16 Construction Construction Net Output at Current Prices (US Dollar)
8.2.17 Construction Construction Output-Current Prices as a % of GDP
8.2.18 Industry - Crude Steel Production
8.2.19 Industry - Crude Oil Consumption
8.2.20 Inflation Rate
8.2.21 Fiscal Deficit as a Percentage of GDP
8.2.22 Trade Balance as a Percentage of GDP
8.2.23 Exports as a Percentage of GDP
8.2.24 Imports as a Percentage of GDP
8.2.25 Exports Growth
8.2.26 Imports Growth
8.2.27 Exchange Rate US$-EUR (Annual Average)
8.2.28 Exchange Rate US$-EUR (End of Fiscal)
8.3 Infrastructure Quality and Availability
8.3.1 Transport Total Airports and Ports
8.3.2 Transport Railways System
8.3.3 Transport - Passenger Vehicle Production Volume
8.3.4 Transport - Commercial Vehicle Production Volume
8.3.5 Transport - Automotive Components Export Trend
8.3.6 Transport - Automotive Products Import Trend
8.3.7 Transport - Passenger Vehicle Export Trend
8.3.8 Transport - Commercial Vehicle Export Trend
8.3.9 Transport - Passenger Car Penetration
8.3.10 Utilities - Total Installed Capacity for Electricity Generation
8.3.11 Utilities - Installed Capacity for Conventional Thermal Electricity Generation
8.3.12 Utilities - Electricity Production
8.3.13 Utilities - Installed Capacity for Hydro-electricity Generation
8.3.14 Utilities - Installed Capacity for Renewable Electricity Generation
8.3.15 Utilities - Electric Power Consumption
8.3.16 Utilities Electricity Exports
8.3.17 Utilities Electricity Imports
8.3.18 Healthcare - Healthcare Expenditure
8.3.19 Healthcare - Healthcare Expenditure as % GDP
8.3.20 Healthcare - Healthcare Expenditure Per Capita
8.3.21 Technology R&D Expenditure as a percentage of GDP
8.3.22 Communication - Total Internet Subscribers
8.3.23 Communication - Broadband Internet Subscribers
8.3.24 Communication - Personal Computer penetration
8.3.25 Communication Mobile Phone Penetration Rate
8.4 Labor Force
8.4.1 Labor Force
8.4.2 Unemployment Rate
8.5 Demographics
8.5.1 Annual Disposable Income
8.5.2 Annual Per Capita Disposable Income
8.5.3 Annual Consumer Expenditure on Food
8.5.4 Annual Per Capita Consumer Expenditure on Food
8.5.5 Urban and Rural Population
8.5.6 Female as Percentage of Population
8.5.7 Male as Percentage of Population
8.5.8 Mean Age of Population
8.5.9 Median Age of Population
8.5.10 Population Density
8.5.11 Age Distribution Total Population
8.5.12 Age Distribution-Male Population
8.5.13 Age Distribution-Female Population
8.5.14 No. of Households
8.6 Political and Social Risk
8.6.1 Political Stability
8.6.2 Terrorism Index
8.6.3 Transparency Index
List of Tables
Table 1: ICD Research Defense Terrorism Index
Table 2: Key Foreign Players and Operations in the German Defense Sector
Table 3: Heckler & Koch - Recent Contract Wins
Table 4: MAN Nutzfahrzeuge - alliances
Table 5: Eurocopter - Alliances
Table 6: Eurocopter - Recent Contract Wins
Table 7: ESG Elektroniksystem- und Logistik - Alliances
Table 8: ESG Elektroniksystem- und Logistik - Recent Contract Wins
Table 9: Diehl Stiftung- Alliances
Table 10: Diehl Stiftung - Recent Contract Wins
Table 11: ThyssenKrupp Marine Systems - Alliances
Table 12: ThyssenKrupp Marine Systems - Recent Contract Wins
Table 13: Thales Deutschland - Alliances
Table 14: Thales Deutschland - Recent Contract Wins
Table 15: EADS - Alliances
Table 16: EADS - Recent Contract Wins
Table 17: MBDA - Alliances
Table 18: MBDA - Recent Contract Wins
Table 19: Eurofighter Jagdflugzeug - Recent Contract Wins
Table 20: Rheinmetall - Alliances
Table 21: Rheinmetall - Recent Contract Wins
List of Figures
Figure 1: German Defense Market Size and Forecast, 200415F
Figure 2: German Defense Expenditure as a Percentage of GDP (%), 200415F
Figure 3: Defense Expenditure Allocation Split between Revenue and Capital Expenditure (%), 200415F
Figure 4: German Defense Capital Expenditure Breakdown (%), 200415F
Figure 5: German Defense Capital Expenditure for Army (US$ Million), 200915F
Figure 6: German Defense Capital Expenditure for Air Force (US$ Million), 200915F
Figure 7: German Defense Capital Expenditure for Navy (US$ Million), 200915F
Figure 8: German Defense Capital Expenditure for Research and Development (US$ Million), 200915F
Figure 9: ICD Research Terrorism Heat Map, 2009
Figure 10: Benchmarking with Key Global Markets Historical vs. Expected Defense Budget Growth
Figure 11: Defense Expenditure of the Largest Military Expenditures in the World (US$ Billion), 2009 and 2015F
Figure 12: Defense Expenditure as a percentage of GDP of Largest Military Spenders (%), 2009
Figure 13: German Defense Imports by Supplier Country and Category Trend (%), 200409
Figure 14: German Defense Exports (US$ Million), 200509
Figure 15: Global Top Ten Arms Suppliers (%), 200409
Figure 16: Top Ten German Arms Importers by Country (%), 200409 and 2009
Figure 17: German Defense Exports by Category (%), 200409
Figure 18: Industry Dynamics Porters Five Forces Analysis
Figure 20: Rheinmetall - Revenue Trend Analysis (EUR Million), FY200509
Figure 21: Rheinmetall - Operating Profit Trend Analysis (EUR Million), FY200509
Figure 22: Rheinmetall - Net Profit Trend Analysis (EUR Million), FY200509
Figure 23: Germany Business Confidence Index, 2008-10
Figure 24: The Frankfurt Stock Exchange (FWB) Market Capitalization, 2003-09
Figure 25: Germany FDI Inflows by Sector, 2003-08
Figure 26: Germany Deployment of Credit by Sector, 2003-09
Figure 27: Germany GDP Value at Constant Prices, 2003-15F
Figure 28: Germany GDP Per Capita at Constant Prices, 2003-15F
Figure 29: Germany GDP at Current Prices, 2003-15F
Figure 30: Germany GDP Per Capita at Current Prices, 2003-15F
Figure 31: Germany GDP Split by Key Segments, 2003 Vs 2009
Figure 32: Germany Agriculture Net Output at Current Prices (Local Currency), 2003-15F
Figure 33: Germany Agriculture Net Output at Current Prices (US Dollar), 2003-15F
Figure 34: Germany Agriculture Net Output at Current Prices (% of GDP), 2003-15F
Figure 35: Germany Manufacturing Net Output at Current Prices (Local Currency), 2003-15F
Figure 36: Germany Manufacturing Net Output at Current Prices (US Dollar), 2003-15F
Figure 37: Germany Manufacturing Net Output at Current Prices (% of GDP), 2003-15F
Figure 38: Germany Mining, Manufacturing and Utilities Net Output, at Current Prices (Local Currency), 2003-15F
Figure 39: Germany Mining, Manufacturing, Utilities Output, at Current Prices (US Dollar), 2003-15F
Figure 40: Germany Mining, Manufacturing, Utilities Output, at Current Prices (% of GDP), 2003-15F
Figure 41: Germany Construction Net Output, at Current Prices (Local Currency), 2003-15F
Figure 42: Germany Construction Net Output, at Current Prices (US Dollar), 2003-15F
Figure 43: Germany Construction Output, at
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