The German Defense Industry – Market Opportunities and Entry Strategies, Analyses and Forecasts to 2016

iCD Research, January 2012, Pages: 167

This report offers insights into market opportunities and entry strategies adopted by foreign OEMs 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 market size and growth expectations during 2010–2016, including highlights of the key drivers, to aid understanding of the growth dynamics. It also benchmarks the sector against key global markets and provides detailed understanding of emerging opportunities in specific areas.

- Procurement dynamics: Trend analysis of imports and exports, along with their 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, along with knowledge of how existing companies have entered the market, including key contracts, alliances, and strategic initiatives.

- Competitive landscape and strategic insights: Analysis of the competitive landscape of defense manufacturers in Germany. It provides an overview of the key defense companies (both domestic and foreign) along 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.

Synopsis:

- Top level overview of the German defense industry
- A breakdown of the German defense industry by spend pattern valued from 2005 through 2010 and forecasted from 2011 through 2016
- A breakdown of the markets by segment valued from 2005 through 2010 and forecasted from 2011 through 2016
- Details of top companies active across the German defense industry
- Emerging trends and opportunities in the German defense industry in the last 12 months

Scope:

- Analysis of defense industry market size from 2005 through 2010 and forecasts till 2016
- 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 the German defense industry with current, historic and forecast market values
- Gain insight into market opportunity and attractiveness
- Gain insight into industry procurement dynamics
- Gain insight into 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 expenditure which valued at US$44.1 billion in 2011, allocates as much as US$14.6 billion on the procurement of military hardware. Furthermore, the country has a mature domestic sector, capable of fulfilling both local 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 borders 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 forecast to emerge in the areas of unmanned aerial vehicles (UAVs), 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 What is this Report About?
1.2 Definitions
1.3 Summary Methodology
1.4 ICD Research Terrorism Index
1.5 About ICD Research
1.6 About Strategic Defense Intelligence

2 Executive Summary

3 Market Attractiveness and Emerging Opportunities
3.1 Defense Market Size Historical and Forecast
3.1.1 German annual defense expenditure to reach US$XX billion by 2016
3.1.2 Defense expenditure driven by factors such as security of EU, peacekeeping initiatives and A400M development program
3.1.3 Defense expenditure as a percentage of GDP expected to decrease
3.2 Analysis of Defense Budget Allocation
3.2.1 Majority of defense budget allocated for the acquisition of advanced technology and equipment
3.2.2 Air force receives largest capital expenditure allocation
3.2.3 Capital expenditure for army is expected to increase
3.2.4 Capital expenditure of air force is expected to decrease
3.2.5 Naval capital expenditure is set to increase
3.2.6 R&D expenditure is expected to increase
3.3 Homeland Security Market Size and Forecast
3.3.1 Homeland security budget US$XX 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 XX% 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 (MALE) 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 strong trade relationships with other countries will continue to drive defense exports
4.2.2 Germany’s arms exports grew during 2005–2010
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 XX% FDI in the defense industry
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 JV 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 industry
8.1.4 Deployment of credit by industry
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 industries
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 a 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 a percentage of gdp
8.2.12 Manufacturing – mining, manufacturing and utilities net output at current prices (local currency)
8.2.13 Manufacturing – mining, manufacturing and utilities at current prices (us dollars)
8.2.14 Manufacturing – mining, manufacturing and utilities at current prices, as a 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 percentage 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 a percentage of 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 Females as a percentage of the population
8.5.7 Males as a percentage of the 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-of male population
8.5.13 Age distribution of female population
8.5.14 Number of households
8.6 Political and Social Risk
8.6.1 Political Stability
8.6.2 Terrorism Index
8.6.3 Transparency Index

9 Appendix
9.1 Contact Us
9.2 About ICD Research
9.3 Disclaimer

- Heckler and Koch
- MAN Nutzfahrzeuge
- Eurocopter
- ESG Elektroniksystem- und Logistik
- Diehl Stiftung
- ThyssenKrupp Marine Systems
- Thales Deutschland
- European Aeronautic Defense and Space Company (EADS)
- Airbus Military
- MBDA
- Eurofighter Jagdflugzeug
- Rheinmetall

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