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The Japanese Defense Market - Attractiveness, Competitive Landscape and Forecast to 2024

  • ID: 4871291
  • Report
  • November 2019
  • Region: Japan
  • 173 pages
  • GlobalData
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FEATURED COMPANIES

  • Airbus Group
  • BAE Systems
  • Bell
  • Ishikawajima
  • Kawasaki Heavy Industries
  • Lockheed Martin
  • MORE
The Japanese Defense Market - Attractiveness, Competitive Landscape and Forecast to 2024

Summary

In the aftermath of World War II, Japan went on to adopt a pacifistic stance in the international arena; as a result, the Japanese military was primarily relegated to undertaking policing and disaster response functions, while its military operations were primarily self-defense operations.

The country’s defense expenditure is expected to be largely driven by efforts to enhance the combat potential of the JSDF in order to counter the threat of North Korea’s rising military strength, Chinese intrusion on offshore islands within the country’s vicinity, and Russian activities in the disputed Northern territory. The country’s capital expenditure allocation, which stood at an average of 55.9% during the historic period, is expected to increase marginally over the forecast period to 56%, primarily due to similar trends in its procurement patterns.

As such, the country increased its budgetary allocations, inclusive of funding for the Special Action Committee on Okinawa (SACO) and US force realignment, from US$42.4 billion in 2015 to US$47.9 billion in 2019, reflecting a growth rate of 3.12%. Similarly, although the projected growth in the Japanese defense budget is expected to flatten and moderate, the country is still expected to maintain sustained growth in terms of its defense budget, with it increasing from US$48.5 billion in 2020 to US$51.3 billion in 2024, reflecting a CAGR of 1.43% over the forecast period.

The Japanese homeland security budget represents the budget of the National Police Agency of Japan, which is anticipated to be driven by the need to clamp down on organized crime and contain drug trafficking. The country’s homeland security spending increased form US$2.7 billion in 2015 to US$3.1 billion in 2019, reflecting a growth rate of 4.00% during the historic period; however, over the forecast period, the country’s homeland security budget is projected to increase at a CAGR of 3.94% to value US$3.7 billion in 2024. Expenditure is expected to be largely driven by the need to mitigate damages caused by natural disasters, Yakuza operations, the threat of terrorism, and rising instances of information theft.

Aircraft accounted for the largest share of imports during 2014-2018, with the US being the biggest supplier. The country acquired transport and multi-purpose aircraft, RQ-4A Global Hawk UAVs, APY-9 AEW radars, Aegis Ashore ABM systems from the US. Other major imports during the period were engines, sensors, naval weapons, missiles, air defense systems, armored vehicles and artillery systems, which were acquired from countries such as the UK, Sweden, Germany, Australia, and France.

Japanese defense exports are expected to gain momentum over the forecast period, due to an amendment to the existing export ban in 2014. This amendment now allows the country to export defense equipment to the US and European nations. India and New Zealand previously showed interest in acquiring Japanese defense equipment such as ShinMaywa US-2, Kawasaki C-2 and Kawasaki P-1 maritime patrol aircraft, its attempts to sell C-1 and P-1 aircraft to New Zealand were unsuccessful, with the Indian deal to acquire ShinMaywa US-2 amphibious aircraft presently stuck in negotiations.

The report “The Japanese Defense Market - Attractiveness, Competitive Landscape and Forecast to 2024” offers detailed analysis of the Japanese 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, it provides an in-depth analysis of the following -
  • The Japanese defense industry market size and drivers: detailed analysis of the Japanese defense industry during 2019-2023, 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 with respect to capital expenditure and revenue expenditure. It also details the key challenges faced by defense market participants within the country
  • Import and Export Dynamics: analysis of prevalent trends in the country’s imports and exports over the last five years
  • Market opportunities: list of the top ten defense investment opportunities over the next 5 years
  • Competitive landscape and strategic insights: analysis of the competitive landscape of the Japanese defense industry
Companies Mentioned: Lockheed Martin, Raytheon, BAE Systems, Airbus Group, Bell, NEC Corporation, Toshiba Corporation, Mitsubishi Heavy Industries, Kawasaki Heavy Industries, Ishikawajima, Mitsubishi Electric Corporation

Scope
  • During the historic period, the total defense budget, including funding for SACO and US force realignment, witnessed a CAGR of 3.12% to value US$47.9 billion in 2019, compared to US$42.4 billion in 2015. However, the country's defense budget excluding SACO and US force relignment expenditure was valued at US$39.8 billion in 2015, which increased to about US$45.5 billion in 2019. The country's average capital expenditure stood at US$25.7 billion over the period 2015-2019, accounting for an average of about 56% over the historic period.
  • The country’s defense expenditure is expected to be largely driven by efforts to combat the threat of North Korea’s rising military strength, the Chinese intrusion on offshore islands within the vicinity of the country, and Russian activities in the disputed Northern territory. As a percentage of GDP, the country’s defense expenditure is expected to average 0.9% over the forecast period.
Reasons to buy
  • This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Japanese 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
  • Profiles of the top domestic and foreign defense manufacturers . This will provide the user with a total competitive landscape of the sector
  • A deep qualitative analysis of the Japanese defense industry covering sections including demand drivers, Key Trends , and latest industry contracts
Note: Product cover images may vary from those shown
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FEATURED COMPANIES

  • Airbus Group
  • BAE Systems
  • Bell
  • Ishikawajima
  • Kawasaki Heavy Industries
  • Lockheed Martin
  • MORE
1. Introduction
1.1. What is this Report About?
1.2. Definitions
1.3. Summary Methodology
1.4. About the Author

2. Executive Summary

3. Market Attractiveness and Emerging Opportunities
3.1. Current Market Scenario
3.2. Defense Market Size Historical and Forecast
3.3. Analysis of Defense Budget Allocation
3.4. Homeland Security Market Size and Forecast
3.5. Benchmarking with Key Global Markets
3.6. Market Opportunities: Key Trends and Growth Stimulators

4. Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.2. Export Market Dynamics

5. Industry Dynamics
5.1. Five Forces Analysis

6. Market Entry Strategy
6.1. Market Regulation
6.2. Market Entry Route
6.3. Key Challenges

7. Competitive Landscape and Strategic Insights
7.1. Competitive Landscape Overview
7.2. Key Foreign Competitors
7.3. Key Domestic Companies

8. Business Environment and Country Risk
8.1. Economic Performance

9. Appendix
9.1. About the Author
9.2. Disclaimer

List of Tables
Table 1: Japan - Ongoing Procurement Programs
Table 2: Japan - Future Procurement Programs
Table 3: Top Japanese Defense Procurement Programs by Value (US$ Million) 2019-2024
Table 4: Japanese Defense Cooperation
Table 5: Japanese Military Training Exercises
Table 6: Japanese Defense Expenditure (JPY Billion and US$ Billion), 2015-2024
Table 7: Japanese Defense Budget (JPY Billion and US$ Billion), 2015-2024
Table 8: Japanese SACO and US Force Realignment Expenditure (JPY Billion and US$ Billion), 2015-2024
Table 9: Japanese GDP Growth and Defense Expenditure as a Percentage of GDP, 2015-2024
Table 10: Japanese Defense Budget Split between Capital and Revenue Expenditure, 2015-2024
Table 11: Japanese Capital Expenditure (JPY Billion and US$ Billion), 2015-2024
Table 12: Japanese Defense Expenditure Breakdown (%), 2015-2024
Table 13: Japanese Defense Budget - Breakdown by Services (JPY Billion), 2015-2024
Table 14: Japanese Defense Budget - Breakdown by Services (US$ Billion), 2015-2024
Table 15: Japanese Per Capita Defense Expenditure (US$), 2015-2024
Table 16: Japanese Homeland Security Expenditure (JPY Billion and US$ Billion), 2015-2024
Table 17: Benchmarking with Key Markets - 2015-2019 vs 2020-2024
Table 18: Top 10 Japanese Defense Market Sectors by Value (US$ Million), 2019-2024
Table 19: Japanese Budget Formation Timetable
Table 20: FMS Deals to Japan
Table 21: Cost Comparison of Defense Equipment in Japan and the US
Table 22: Top Defense Suppliers in the Japanese Defense Industry By Value (US$ Million), 2019-2024
Table 23: Competitive Landscape of the Japanese Defense Industry
Table 24: Lockheed Martin - Products
Table 25: Lockheed Martin - Alliances
Table 26: Lockheed Martin - Recent Contract Wins
Table 27: Raytheon - Products
Table 28: Raytheon - Alliances
Table 29: Raytheon - Recent Contract Wins
Table 30: BAE Systems - Products
Table 31: BAE Systems - Alliances
Table 32: BAE Systems - Recent Contract Wins
Table 33: Airbus Group - Products and Services
Table 34: Airbus Group - Recent Contract Wins
Table 35: Bell - Products and Services
Table 36: Bell - Alliances
Table 37: Bell - Recent Contract Wins
Table 38: NEC Corporation - Products and Services
Table 39: NEC Corporation - Alliances
Table 40: NEC Corporation - Recent Contract Wins
Table 41: Toshiba Corporation - Products
Table 42: Toshiba Corporation - Alliances
Table 43: Toshiba Corporation - Recent Contract Wins
Table 44: Mitsubishi Heavy Industries - Products
Table 45: Mitsubishi Heavy Industries - Alliances
Table 46: Mitsubishi Heavy Industries - Recent Contract Wins
Table 47: Kawasaki Heavy Industries - Products
Table 48: Kawasaki Heavy Industries - Alliances
Table 49: Kawasaki Heavy Industries - Recent Contract Wins
Table 50: Ishikawajima-Harima Heavy Industries Co. Ltd - Products

List of Figures
Figure 1: Analysis of the Japanese Defense Budget, 2020 and 2024
Figure 2: Japanese Defense Imports/Exports, 2014 and 2018
Figure 3: Top Five Japanese Prospective Procurements/Developments
Figure 4: Japanese National Security Threats
Figure 5: Japan’s Partner Countries for Defense Co-operation and Military Training
Figure 6: Japanese Defense Expenditure (JPY Billion), 2015-2024
Figure 7: Japanese Defense Expenditure (US$ Billion), 2015-2024
Figure 8: Japanese Defense Budget (JPY Billion), 2015-2024
Figure 9: Japanese Defense Budget (US$ Billion), 2015-2024
Figure 10: Japanese SACO and US Force Realignment Expenditure (JPY Billion), 2015-2024
Figure 11: Japanese SACO and US Force Realignment Expenditure (US$ Billion), 2015-2024
Figure 12: Japanese GDP Growth vs Defense Expenditure as a Percentage of GDP, 2015-2024
Figure 13:Japanese Defense Budget Split between Capital and Revenue Expenditure, 2015-2024
Figure 14: Japanese Defense Budget Split Between SACO and US Forces Realignment Expenditure (%), 2015-2024
Figure 15: Japanese Capital Expenditure (JPY Billion), 2015-2024
Figure 16: Japanese Capital Expenditure (US$ Billion), 2015-2024
Figure 17: Japanese Defense Expenditure Breakdown - Percentage Share Split by Service Allocations, 2015-2024
Figure 18: Japan Defense Budget - Breakdown by Services (JPY Billion), 2015-2024
Figure 19: Japanese Defense Budget - Breakdown by Services (US$ Billion), 2015-2024
Figure 20: Japanese Per Capita Defense Expenditure (US$), 2015-2024
Figure 21: Japanese Homeland Security Budget (JPY Billion), 2015-2024
Figure 22: Japanese Homeland Security Budget (US$ Billion), 2015-2024
Figure 23: Benchmarking with Key Markets - 2015-2019 vs 2020-2024
Figure 24: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2019 and 2024
Figure 25: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2019
Figure 26: Land-based C4ISR Market Size (US$ Million), 2019-2024
Figure 27: Critical Infrastructure Protection - Physical Security Market Size (US$ Million), 2019-2024
Figure 28: Infrastructure Construction Market Size (US$ Million), 2019-2024
Figure 29: Japanese Defense Procurements in Terms of Their Supplier Relationships
Figure 30: Japanese Defense Imports Trend, 2014-2018
Figure 31: Japanese Defense Imports by Country (%), 2014-2018
Figure 32: Japanese Defense Imports by Category (%), 2014-2018
Figure 33: Industry Dynamics - Porter’s Five Forces Analysis
Figure 34: Structure of the New Japanese Defense Equipment Agency
Figure 35: Japanese Market Challenges
Figure 36: Japanese Market Share Analysis, 2019-2024
Figure 37: Lockheed Martin Corp. - Revenue Trend Analysis (US$ Billion), 2014-2018
Figure 38: Lockheed Martin Corp. - Operating Profit Trend Analysis (US$ Billion), 2014-2018
Figure 39: Lockheed Martin Corp. - Net Profit Trend Analysis (US$ Billion), 2014-2018
Figure 40: Raytheon - Revenue Trend Analysis (US$ Billion), 2014-2018
Figure 41: Raytheon - Operating Profit Trend Analysis (US$ Billion), 2014-2018
Figure 42: Raytheon - Net Profit Trend Analysis (US$ Billion), 2014-2018
Figure 43: BAE Systems - Revenue Trend Analysis (GBP Billion), 2014-2018
Figure 44: BAE Systems - Operating Profit (GBP Billion), 2014-2018
Figure 45: BAE Systems - Net Profit Trend Analysis (GBP Billion), 2014-2018
Figure 46: Airbus Group - Revenue Trend Analysis (EUR Billion), 2014-2018
Figure 47: Airbus Group - Operating Profit (EUR Billion), 2014-2018
Figure 48: Airbus Group - Net Profit Trend Analysis (EUR Billion), 2014-2018
Figure 49: Toshiba - Revenue Trend Analysis (JPY Trillion), 2015-2019
Figure 50: Toshiba - Operating Profit Trend Analysis (JPY Billion), 2015-2019
Figure 51: Toshiba - Net Profit Trend Analysis (JPY Billion), 2015-2019
Figure 52: Mitsubishi Heavy Industries - Revenue Trend Analysis (JPY Billion), 2015-2019
Figure 53: Mitsubishi Heavy Industries - Operating Profit Trend Analysis (JPY Billion), 2015-2019
Figure 54: Mitsubishi Heavy Industries - Net Profit Trend Analysis (JPY Billion), 2015-2019
Figure 55: Kawasaki Heavy Industries - Revenue Trend Analysis (JPY Trillion), 2015-2019
Figure 56: Kawasaki Heavy Industries - Operating Profit Trend Analysis (JPY Billion), 2015-2019
Figure 57: Kawasaki Heavy Industries - Net Profit Trend Analysis (JPY Million), 2015-2019
Figure 58: Mitsubishi Electric Corporation - Revenue Trend Analysis (JPY Trillion), 2015-2019
Figure 59: Mitsubishi Electric Corporation - Operating Profit Analysis (JPY Billion), 2015-2019
Figure 60: Mitsubishi Electric Corporation - Net Profit Analysis (JPY Billion), 2015-2019
Note: Product cover images may vary from those shown
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  • Lockheed Martin
  • Raytheon
  • BAE Systems
  • Airbus Group
  • Bell
  • NEC Corporation
  • Toshiba Corporation
  • Mitsubishi Heavy Industries
  • Kawasaki Heavy Industries
  • Ishikawajima
  • Mitsubishi Electric Corporation
Note: Product cover images may vary from those shown
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