Future of the Australia Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022

  • ID: 4328257
  • Report
  • Region: Australia
  • 136 Pages
  • Strategic Defence Intelligence
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FEATURED COMPANIES

  • Airbius Group Australia
  • ASC
  • Austal Ltd
  • Boeing Defence Australia
  • Lockheed Martin
  • Navantia
  • MORE

Summary

Australian defense budget recorded a CAGR of 0.28% during the historic period (2013-2017), from US$26.2 Billion in 2013 to US$26.5 Billion in 2017. Modernization initiatives and advanced equipment procurement programs - as outlined in white papers published by the Australian Department of Defence (DoD) - will drive expenditure. According to one white paper, the country is expected to undertake a number of modernization and procurement programs over the coming decade. Participation in a number of UN peacekeeping operations will also fuel the country’s defense expenditure, propelling the budget from US$27.5 Billion in 2016 to US$35.4 Billion in 2022, at a CAGR of 6.54%.

During the historic period, other expenditure - which comprises intelligence capabilities, chief operating officers, defense support and reforms, chief information officers, science and technology - accounted for 41.6% of the total defense budget and valued at US$10.90 Billion in 2017. It will average 44.0% over the forecast period. Due to security threats from terrorist organizations and the deployment of troops in overseas peacekeeping missions, Australia will focus on the acquisition of multirole aircraft, helicopters, nuclear attack submarines, patrol ships, frigates, and armored vehicles.

To accelerate exports, the government established the Defense Export Unit (DEU), which assists domestic companies in gaining access to the export market. The Australian Industry Capability (AIC) plan was designed to provide domestic firms with access to external global supply chains and foreign firms’ technology.

The preferred entry route for most foreign OEMs looking to enter the Australian defense market has been to establish a subsidiary or acquire a domestic firm. Increasingly, foreign OEMs are entering the market by sub-contracting business to the domestic industry or entering into a foreign direct investment (FDI) scheme. In recognition, the DoD launched a scheme rewarding those defense suppliers that maintain a successful relationship with the Australian Defense Organization.

The report “Future of the Australia Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022” offers detailed analysis of Australia defense industry with market size forecasts covering the next five years. This report will also analyze factors that influence demand for the industry, key market trends, and challenges faced by industry participants.

In particular, this report provides an in-depth analysis of the following:

  • Australia defense industry market size and drivers: Detailed analysis of Australia defense industry during 2018-2022, including highlights of the demand drivers and growth stimulators for the industry. It also provides a snapshot of the country’s expenditure and modernization patterns.
  • Budget allocation and key challenges: Insights into procurement schedules formulated within the country and a breakdown of the defense budget. It also details the key challenges faced by defense market participants within the country.
  • Porter’s Five Force analysis of Australia defense industry: analysis of the market characteristics by determining the bargaining power of suppliers, bargaining power of buyers, threat of substitution, intensity of rivalry, and barriers to entry.
  • Import and Export Dynamics: Analysis of prevalent trends in the country’s imports and exports over the last five years.
  • Market opportunities: Details of the top five defense investment opportunities over the next 10 years.
  • Competitive landscape and strategic insights: Analysis of the competitive landscape of Australia defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis.

Companies mentioned in this report: Thales Australia, Boeing Defence Australia, Lockheed Martin, Raytheon Australia, Austal Ltd, Saab Systems, General Dynamics Land Systems Australia, Navantia, Airbius Group Australia, ASC.

Scope

  • The Australian government remains committed to building strong defense capabilities. The country’s defense budget recorded a CAGR of 0.28% during the historic period (2013-2017), from US$26.2 billion in 2013 to US$26.5 billion in 2017. Modernization initiatives and advanced equipment procurement programs - as outlined in white papers published by the Australian Department of Defence (DoD) - will drive expenditure. According to one white paper, the country is expected to undertake a number of modernization and procurement programs over the coming decade.
  • During the historic period, an average of 27.9% of the total defense budget was allocated to capital expenditure; this will reach 39.4% over the forecast period. This is predominantly due to Australia’s planned armed force modernization program and procurement plans. Specifically, investment will be allocated to replacing ageing armored vehicles with infantry fighting and combat reconnaissance vehicles.
  • The MoD is expected to invest in Multi-role aircraft, submarines, frigates, multi-role aircraft MRO, land-based C4ISR, and armored fighting vehicles

Reasons to Buy

  • This report will give the user confidence to make the correct business decisions based on a detailed analysis of Australia defense industry market trends for the coming five years
  • The market opportunity section will inform the user about the various military requirements that are expected to generate revenues during the forecast period. The description includes technical specifications, recent orders, and the expected investment pattern by the country during the forecast period
  • Detailed profiles of the top domestic and foreign defense manufacturers with information about their products, alliances, recent contract wins, and financial analysis wherever available. This will provide the user with a total competitive landscape of the sector
  • A deep qualitative analysis of Australia defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts
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Note: Product cover images may vary from those shown
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FEATURED COMPANIES

  • Airbius Group Australia
  • ASC
  • Austal Ltd
  • Boeing Defence Australia
  • Lockheed Martin
  • Navantia
  • MORE

1. Introduction
1.1. What is this Report About?
1.2. Definitions
1.3. Summary Methodology
1.4. About

2. Executive Summary

3. Market Attractiveness and Emerging Opportunities
3.1. Current Market Scenario
3.1.1. Primary threat perception
3.1.2. Military doctrine and strategy
3.1.3. Military Fleet Size
3.1.4. Procurement programs
3.1.5. Ongoing procurement programs
3.1.6. Future procurement programs
3.1.7. Social, political and economic environment and support for defense projects
3.1.8. Political and strategic alliances
3.2. Defense Market Size Historical and Forecast
3.2.1. The Australian defense budget will grow over the forecast period
3.2.2. Military modernization and participation in peacekeeping missions are the major factors driving the Australian defense industry
3.2.3. Australian defense budget be at 2.0% of GDP over 2018-2022
3.3. Analysis of Defense Budget Allocation
3.3.1. Capital expenditure share to increase over the next five years
3.3.2. Capital expenditure to post a forecast-period CAGR of 9.83%
3.3.3. Much of the defense budget is allocated to cyberspace and space-related security operations
3.3.4. Australia to invest US$5.88 billion on its land forces over the forecast period
3.3.5. Air force budget to grow at a CAGR of 6.15% over the forecast period
3.3.6. Naval expenditure will post a forecast-period CAGR of 4.21%
3.3.7. A large proportion of Australia’s defense budget is allocated to ‘others’
3.3.8. Per capita defense expenditure to increase over the forecast period
3.4. Homeland Security Market Size and Forecast
3.4.1. Measures to curb organized crime, cyberattacks, and maritime threats to drive homeland security expenditure
3.4.2. Australia faces minimal threat from foreign terrorist organizations
3.5. Australia faces moderate threat from foreign terrorist organizations
3.6. Australia has a terrorism index score of 2.7
3.7. Benchmarking with Key Global Markets
3.7.1. Australian defense expenditure to remain modest compared to the leading spenders
3.7.2. Australia will continue to dominate the arms market in the Asia-Pacific region
3.7.3. Defense expenditure as a percentage of GDP to remain at 1.8% over forecast period
3.8. Market Opportunities: Key Trends and Growth Stimulators
3.8.1. Multirole aircraft
3.8.2. Submarines
3.8.3. Frigates
3.8.4. Multirole aircraft MRO
3.8.5. Land-based C4ISR
3.8.6. Armored fighting vehicles

4. Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. Defense imports expected to increase considerably over the forecast period
4.1.2. The US was the largest arms supplier to Australia during 2012-2016
4.1.3. Imports of aircraft and missiles expected to surge over the forecast period
4.2. Export Market Dynamics
4.2.1. Defense exports are expected to increase over the forecast period owing to the government initiatives
4.2.2. The US was the main importer of the Australian defense goods during 2012-2016
4.2.3. Aircraft and ships constitute the majority of Australian exports

5. Industry Dynamics
5.1. Five Forces Analysis
5.1.1. Bargaining power of supplier: low to medium
5.1.2. Bargaining power of buyer: high
5.1.3. Barrier to entry: high
5.1.4. Intensity of rivalry: medium to high
5.1.5. Threat of substitution: high

6. Market Entry Strategy
6.1. Market Regulation
6.1.1. AIC program ensures the participation of local industry
6.1.2. Approval for foreign investment in defense industry set at US$216.2 million
6.2. Market Entry Route
6.2.1. Budgeting process
6.2.2. Procurement policy and process
6.2.3. Establishing a domestic subsidiary is the preferred market entry route
6.2.4. Foreign OEMs sub-contract defense deals to domestic firms to enter the market
6.2.5. Foreign OEMs offer domestic companies access to global supply chains in order to enter the industry
6.3. Key Challenges
6.3.1. Cost overruns and project delays continue to worry the defense industry
6.3.2. Low allocation of skilled labor in the defense industry

7. Competitive Landscape and Strategic Insights
7.1. Competitive Landscape Overview
7.2. Key Domestic Companies
7.2.1. Thales Australia: overview
7.2.2. Thales Australia: products and services
7.2.3. Thales Australia: recent announcements and strategic initiatives
7.2.4. Thales Australia: alliances
7.2.5. Thales Australia: recent contract wins
7.2.6. Boeing Defense Australia: overview
7.2.7. Boeing Defense Australia: products and services
7.2.8. Boeing Defense Australia: recent announcements and strategic initiatives
7.2.9. Boeing Defense Australia: alliances
7.2.10. Boeing Defense Australia: Recent Contract Wins
7.2.11. Lockheed Martin Australia: overview
7.2.12. Lockheed Martin Australia: products and services
7.2.13. Lockheed Martin Australia: recent announcements and strategic initiatives
7.2.14. Lockheed Martin Australia: alliances
7.2.15. Lockheed Martin Australia: recent contract wins
7.2.16. Raytheon Australia: overview
7.2.17. Raytheon Australia: products and services
7.2.18. Raytheon Australia: Recent Announcements and Strategic Initiatives
7.2.19. Raytheon Australia: alliances
7.2.20. Raytheon Australia: recent contract wins
7.2.21. Austal Ltd: overview
7.2.22. Austal Ltd: products and services
7.2.23. Austal Ltd: recent announcements and strategic initiatives
7.2.24. Austal Ltd: alliances
7.2.25. Austal Ltd: recent contract wins
7.2.26. Saab Systems: overview
7.2.27. Saab Systems: products and services
7.2.28. Saab Systems: recent announcements and strategic initiatives
7.2.29. Saab Systems: alliances
7.2.30. Saab Systems: recent contract wins
7.2.31. General Dynamics Land Systems Australia: overview
7.2.32. General Dynamics Land Systems Australia: products and services
7.2.33. General Dynamics Land Systems Australia: Recent Announcements and Strategic Initiatives
7.2.34. General Dynamics Land Systems Australia: recent contract wins
7.2.35. Navantia: overview
7.2.36. Navantia: products and services
7.2.37. Navantia: recent announcements and strategic initiatives
7.2.38. Navantia: alliances
7.2.39. Navantia: recent contract wins
7.2.40. Airbus Group Australia Pacific: overview
7.2.41. Airbus Group Australia Pacific: Major Products and Services
7.2.42. Airbus Group Australia Pacific: recent announcements and strategic initiatives
7.2.43. Airbus Group Australia Pacific: alliances
7.2.44. Airbus Group Australia Pacific: Recent Contract Wins
7.3. Key Public Sector Company
7.3.1. ASC: overview
7.3.2. ASC: Major Products and Services
7.3.3. ASC: recent announcements and strategic initiatives
7.3.4. ASC: alliances
7.3.5. ASC: Recent Contract Wins

8. Business Environment and Country Risk
8.1. Economic Performance
8.1.1. GDP per capita
8.1.2. GDP at current prices (US$)
8.1.3. Exports of goods and services current prices
8.1.4. Imports of goods and services (current prices)
8.1.5. Gross national disposable income (US$ billion)
8.1.6. Local currency unit per US dollar
8.1.7. Market capitalization of listed companies
8.1.8. Market capitalization of listed companies a percentage of GDP
8.1.9. Government cash surplus/deficit as a percentage of GDP
8.1.10. Goods exports as a percentage of GDP
8.1.11. Goods imports as a percentage of GDP
8.1.12. Goods trade surplus/deficit as a percentage of GDP
8.1.13. Service imports as a percentage of GDP
8.1.14. Service exports as a percentage of GDP
8.1.15. Foreign direct investment, net (BoP, current US$ billion)
8.1.16. Net foreign direct investment as a percentage of GDP
8.1.17. Mining, manufacturing, utilities output (LCU Billion)

9. Appendix
9.1. About
9.2. Disclaimer

List of Tables

Table 1: Australia Army Strength
Table 2: Australian Navy Strength
Table 3: Australia Air Force Strength
Table 4: Australia - Procurement Programs
Table 5: Australia - Future Procurement Programs
Table 6: Australia - Defense Expenditure (AUD Billion/US$ Billion), 2013-2022
Table 7: Australia - GDP Growth vs. Defense Expenditure as Percentage of GDP Growth, 2013-2022
Table 8: Australia - Defense Budget Split by Capital and Revenue Expenditure (%), 2013-2021
Table 9: Australia - Defense Capital Expenditure (AUD Billion/US$ Billion), 2013-2022
Table 10: Australia - Defense Expenditure Allocation (%), 2013-2022
Table 11: Australia Defense Expenditure for Army (AUD Billion & US$ Billion), 2013-2022
Table 12: Australia - Defense Expenditure for Air Force (AUD Billion/US$ Billion), 2013-2022
Table 13: Australia - Defense Expenditure for Navy (AUD Billion/US$ Billion), 2013-2022
Table 14: Australia - Defense Expenditure for Others (AUD Billion/US$ Billion), 2013-2022
Table 15: Australia - Per Capita Defense Expenditure (US$), 2013-2022
Table 16: Australia - Homeland Security Expenditure (AUD Billion/US$ Billion), 2013-2022
Table 17: Terrorism Index, 2017
Table 18: Benchmarking with Key Markets (US$ Billion), 2013-2017 vs. 2018-2022
Table 19: FATA Approval for Acquisition within the Defense sector in Australia
Table 20: Australia Budget Formation Timetable: (July 1-June 30)
Table 21: FMS deals to Australia
Table 22: Key Foreign OEMS and Subsidiaries
Table 23: Small Projects with Cost Overruns
Table 24: Major Projects with Cost Overruns
Table 25: Project Delays
Table 26: Competitive Landscape of the Polish Defense Industry
Table 27: Thales Australia - Main Products and Services
Table 28: Thales Australia - Alliances
Table 29: Thales Australia - Recent Contract Wins
Table 30: Boeing Defense Australia - Main Products and Services
Table 31: Boeing Defense Australia - Alliances
Table 32: Boeing Defense Australia - Recent Contract Wins
Table 33: Lockheed Martin Australia - Main Products and Services
Table 34: Lockheed Martin Australia - Alliances
Table 35: Lockheed Martin Australia - Recent Contract Wins
Table 36: Raytheon Australia - Main Products and Services
Table 37: Raytheon Australia - Alliances
Table 38: Raytheon Australia - Recent Contract Wins
Table 39: Austal Ltd - Main Products and Services
Table 40: Austal - Alliances
Table 41: Austal Ltd - Recent Contract wins
Table 42: Saab Systems - Main Products and Services
Table 43: Saab Systems - Alliances
Table 44: Saab Systems - Recent Contract Wins
Table 45: General Dynamics Land Systems Australia - Main Products and Services
Table 46: General Dynamics Land Systems Australia - Recent Contract Wins
Table 47: Navantia - Main Products and Services
Table 48: Navantia - Alliances
Table 49: Navantia - Recent Contract Wins
Table 50: Airbus Group Australia Pacific - Main Products and Services
Table 51: Airbus Group Australia Pacific - Alliances
Table 52: Airbus Group Australia Pacific - Recent Contract Wins
Table 53: ASC - Main Products and Services
Table 54: ASC - Alliances
Table 55: ASC - Recent Contract wins

List of Figures

Figure 1: Australia - Defense Expenditure (AUD Billion), 2013-2022
Figure 2: Australia - Defense Expenditure (US$ Billion), 2013-2022
Figure 3: Australia - GDP Growth vs. Defense Expenditure as Percentage of GDP, 2013-2022
Figure 4: Australia - Defense Budget Split by Capital and Revenue Expenditure (%), 2013-2022
Figure 5: Australia - Defense Expenditure Allocation (%), 2013-2022
Figure 6: Australia - Army Defense Budget (AUD Billion), 2013-2022
Figure 7: Australia - Army Defense Budget (US$ Billion), 2013-2022
Figure 8: Australia - Air Force Defense Budget (AUD Billion), 2013-2022
Figure 9: Australia - Air Force Defense Budget (US$ Billion), 2013-2022
Figure 10: Australia - Naval Defense Budget (AUD Billion), 2013-2022
Figure 11: Australia - Naval Defense Budget (US$ Billion), 2013-2022
Figure 12: Australia - Others Defense Budget (AUD Billion), 2013-2022
Figure 13: Australia - Others Defense Budget (US$ Billion), 2013-2022
Figure 14: Australian Per Capita Defense Expenditure (US$), 2013-2022
Figure 15: Australia - Homeland Security Budget (AUD Billion), 2013-2022
Figure 16: Australia - Homeland Security Budget (US$ Billion), 2013-2022
Figure 17: Terrorism Heat Map, 2017
Figure 18: Terrorism Index, 2017
Figure 19: Benchmarking with Key Markets (%) 2013-2017 vs. 2018-2022
Figure 20: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2017 and 2022
Figure 21: Defense Expenditure as a Percentage of GDP by Country (%), 2017
Figure 22: Multirole Aircraft Market Size (US$ Billion), 2017-2027
Figure 23: Diesel Electric Submarine Market Size (US$ Billion), 2017-2027
Figure 24: Frigates Market Size (US$ Million), 2017-2027
Figure 25: Multirole Aircraft MRO Market Size (US$ Million), 2017-2027
Figure 26: Land-Based C4ISR Market Size (US$ Million), 2017-2027
Figure 27: Armored Fighting Vehicles Market Size (US$ Million), 2017-2027
Figure 28: Australia - Defense Import (US$ Million), 2012-2016
Figure 29: Australia - Defense Import by Country (%), 2012-2016
Figure 30: Australia - Defense Imports by Category (%), 2012-2016
Figure 31: Australia - Defense Export Trend (US$ Million), 2012-2016
Figure 32: Australian Defense Exports by Country (%), 2012-2016
Figure 33: Australian Defense Exports by Category (%), 2012-2016
Figure 34: Industry Dynamics - Porter’s Five Forces Analysis
Figure 35: Australia’s GDP Per Capita at Constant Prices (US$), 2015-2025
Figure 36: Australia - GDP at Current Prices (US$ Billion), 2015-2025
Figure 37: Australia - Exports of Goods and Services (LCU Billion), 2005-2014
Figure 38: Australia - Imports of Goods and Services (LCU Billion), 2005-2014
Figure 39: Australia - Gross National Disposable Income (US$ Billion), 2005-2012
Figure 40: Australia - Local Currency Unit per US$ - Exchange Rate, 2015-2024
Figure 41: Australia - Market Capitalization of Listed Companies (US$ Billion), 2005-2012
Figure 42: Australia - Market Capitalization of Listed Companies as Percentage of GDP, 2005-2012
Figure 43: Australia - Government Cash Surplus/Deficit as a Percentage of GDP, 2005-2012
Figure 44: Australia - Goods Exports as a Percentage of GDP, 2005-2014
Figure 45: Australia - Goods Imports as a Percentage of GDP, 2005-2014
Figure 46: Australia - Goods Trade Surplus/Deficit as a Percentage of GDP, 2005-2014
Figure 47: Australia - Service Imports as a Percentage of GDP, 2005-2014
Figure 48: Australia - Service Exports as a Percentage of GDP, 2005-2014
Figure 49: Australia - Foreign Direct Investment, Net BoP (US$ Billion), 2005-2014
Figure 50: Australia - Net Foreign Direct Investment as a Percentage of GDP, 2005-2014
Figure 51: Australia Mining, Manufacturing, Utilities Output (LCU Billion), 2005-2014

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  • ASC
  • Airbius Group Australia
  • Austal Ltd
  • Boeing Defence Australia
  • General Dynamics Land Systems Australia
  • Lockheed Martin
  • Navantia
  • Raytheon Australia
  • Saab Systems
  • Thales Australia
Note: Product cover images may vary from those shown
5 of 4
Note: Product cover images may vary from those shown
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