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. http://www.bharatbook.com/defense-market-research-reports/future-of-the-german-defense-industry-market-attractiveness-competitive-landscape-and-forecasts-to-2018.html
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.
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.
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.
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.
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.
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Future of the German Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018
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Future of the German Defense Industry - Market Attractivenes