The German Defense Sector - Market Opportunities and Entry Strategies, Analyses and Forecasts to 2015

iCD Research, July 2010, Pages: 156

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 2010–2015, 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 country’s 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, Germany’s 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, Germany’s 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

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 Germany’s 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 Germany’s 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 Germany’s arms exports grew strongly during 2005–09
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

- Heckler & Koch
- MAN Nutzfahrzeuge
- Eurocopter
- ESG Elektroniksystem- und Logistik
- Diehl Stiftung
- ThyssenKrupp Marine Systems
- Thales Deutschland
- EADS
- Airbus Military
- MBDA
- Eurofighter Jagdflugzeug
- Rheinmetall

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