This report is the result of SDI's extensive market and company research covering the global missiles and missile defense systems industry. It provides detailed analysis of both historic and forecast global industry values, factors influencing demand, the challenges faced by industry participants, analysis of the leading companies in the industry, and key news.
Introduction and Landscape
Why was the report written?
"The Global Missiles and Missile Defense Systems Market 2013-2023" offers the reader detailed analysis of the global missiles and missile defense systems market over the next ten years, alongside potential market opportunities to enter the industry, using detailed market size forecasts.
What are the key drivers behind recent market changes?
The US has witnessed budget cuts in the recent past and is likely to continue to do so in the future. Despite this, North America is expected to account for the largest share of the total global expenditure on missiles and missile defense systems with 39% in the forecast period. High demand in the region is primarily driven by the five major missile defense programs: the Aegis Ballistic Missile Defense (BMD) System, the Ground-Based Mid-Course Defense System, the Terminal High-Altitude Air Defense System (THAAD), the Medium Extended Air Defense System and the European Phased Adaptive Approach (PAA) Defense System. Asia and Europe are also expected to account for a significant proportion of the total global missiles and missile defense systems market during the forecast period, with shares of 33% and 16% respectively. This will be largely driven by the efforts of countries such as India, China and Russia to modernize their armed forces. The Middle East, Latin America and Africa account for 9%, 2% and 1% of global missile and missile defense systems expenditure respectively.
What makes this report unique and essential to read?
"The Global Missiles and Missile Defense Systems Market 2013-2023" provides detailed analysis of the current industry size and growth expectations from 2013 to 2023, 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 market for missiles and missile defense systems during 2013-2023, including the factors that influence why countries are investing or cutting defense expenditure. It provides detailed expectations of growth rates and projected total expenditure.
A significant number of countries are investing in the development of their domestic missile industries by establishing strategic alliances and technology transfer agreements with global missile manufacturers. In addition to improving the indigenous capabilities of a domestic defense firm, this provides the foreign original equipment manufacturers (OEM) with an opportunity to cater to a new market. Furthermore, European countries still suffering from the effects of a recession, including France, Germany, Italy and the UK, are undertaking joint research and development projects in order to reduce the per-unit costs of a missile. Partnerships between countries that possess an advance defense industrial base, such as the UK and France, also enable mutual sharing of advanced technology.
Foreign OEMs seeking to enter a specific missiles market often enter into marketing agreements with domestic companies to gain an opportunity to market their products in a specific region. For example, in August 2011, Ratheon of the US and Israel's Rafael Advanced Defense Systems Ltd teamed up to market the Iron Dome weapon system in the US. Rafael developed the short-range Iron Dome air defense system to provide protection against rockets, artillery and mortar attacks. In June 2007, Lockheed Martin and Kongsberg signed a joint marketing agreement for an aircraft version of the Naval Strike Missile (NSM), adapted for deployment on Lockheed Martin's F-35 joint strike fighter. In January 2007, Lockheed Martin and Kongsberg signed a joint marketing agreement for an aircraft-version of the Naval Strike Missile (NSM), known as the Joint Strike Missile (JSM).
Key Market Issues
Traditionally, North America and Europe accounted for around 80% of global defense spending. However, the global economic downturn, US economic crisis and European debt crisis are expected to negatively impact defense spending, leading to defense budget cuts. As a consequence, allocation for missiles and missile defense systems is not expected to grow significantly during the forecast period owing to financial constraints faced by most of the leading defense spenders. For example, the US, the largest defense spender, announced defense budget cuts of US$178 billion during 2011-2015. The US Defense Department recently proposed cutting more than a half-billion dollars from missile defense in 2014 even amid heightened concern over North Korea and new intelligence suggesting Pyongyang may be able to arm a ballistic missile with a nuclear warhead. The Pentagon plans to spend US$9.16 billion on ballistic missile defense in fiscal 2014. The amount is US $558 million, or 5.7% less than the US$9.72 billion it requested for 2013. Furthermore, the figures do not take into account the automatic budget cuts, known as sequestration, which took effect in March 2013.
In 2009, the US government scrapped the European missile defense system due to technical flaws and significant cost overruns, and replaced it with entirely new missile defense architecture. Various missile defense programs are currently facing the same problems due to the sheer magnitude of resources required for their successful implementation. The US Missile Defense Agency (MDA) has spent US$80 billion in researching and deploying various elements of the country's BMD system since 2002. However, due to inadequate and inaccurate reporting of baseline budget numbers by the MDA, the Government Accountability Office (GAO) has been unable to conclusively assess the total cost of the US BMD program for six years in a row. Moreover, with the MDA failing to achieve its test objectives for many of its missile defense programs, the government is incurring large cost overruns, which are estimated at US$4-6 billion.
The latest nuclear missile tests undertaken by the North Korean government in 2013 have raised serious concerns among various countries globally, including the US, South Korea, Japan, Australia etc. The relations between the US and North Korea have been tense from a long period of time. Therefore, with the North Korean deployment of missiles aimed at the US and the knowledge that the North Korean missiles possess capabilities to hit Japan, South Korea and other countries in the vicinity, the spending on the sector in the region is expected to rise significantly during the forecast period. Apart from North Korea, another nation which poses a significant threat to global peace is Iran. Iran has been carrying out uranium enrichment for its nuclear power program, which some nations are concerned could be used in nuclear weapons. The country possesses various short, medium and intermediate range ballistic missiles and is in the process of developing an intercontinental-range missile known as the Shahab-6, which is expected to strike as far as the UK. Iran has also received assistance from Russia and North Korea, with Russia looking to weaken the military stronghold of the US. In addition to its development programs, Iran is also engaged in the mass distribution of ballistic missile technology to countries such as North Korea, Sudan and Congo, all of which have been deemed to be rouge states by the US and pose a threat to global security.
Due to the fact that many missiles are becoming obsolete or reaching the end of their lives, the global missiles and missile defense systems market is expected to grow during the forecast period, despite budget cuts. Countries such as the US, Russia, China, the UK, Germany and countries in South Asia are seeking to replace existing missiles with new ones or upgrade their existing technology.
A number of countries worldwide are planning to increase their nuclear capabilities and missile strike ranges. Countries such as the US, India, Russia, Israel, China, Italy, Germany, France, Spain, Sweden and the UK are procuring long-range ICBMs which are capable of hitting targets at distances of up to 6,000 kilometers. South Korea, which until recently was prohibited by an accord with the US to possess missiles with a range of more than 300 kilometers is expected to acquire ICBMs with longer ranges of up to 800 kilometers.
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