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Market Research Report

Future of the Israeli Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023

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Future of the Israeli Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023
Published: November 8, 2018 Content info: 154 Pages
Description

"Future of the Israeli Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023", published by GlobalData, provides readers with detailed analysis of both historic and forecast defense industry values, factors influencing demand, the challenges faced by industry participants, analysis of industry leading companies, and key news.

This report offers detailed analysis of the Israeli 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 Israeli defense industry market size and drivers: detailed analysis of the Israeli 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 Israeli defense industry.

Scope

  • As one of the countries with the largest per capita defense expenditures in the world, US$2,090.9 in 2018, Israel is an attractive defense market.
  • The country's defense expenditure is projected to continue to grow due to both internal and external security threats.
  • Between 2014 and 2018, the country's capital expenditure allocation stood at an average of 51% of the total defense budget.
  • Overall, Israel is projected to spend a total of US$72.3 billion (including funding through US foreign military financing) on the acquisition of military hardware between 2019 and 2023.

Reasons to buy

  • This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Israeli 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 Israeli defense industry covering sections including demand drivers, Key Trends , and latest industry contracts.
Table of Contents
Product Code: GDDF0528MR

Table of Contents

1. Introduction 10

  • 1.1. What is this Report About? 10
  • 1.2. Definitions 10
  • 1.3. Summary Methodology 12
  • 1.4. About GlobalData 13

2. Executive Summary 14

3. Market Attractiveness and Emerging Opportunities 16

  • 3.1. Current Market Scenario 17
    • 3.1.1. Primary threat perception 17
    • 3.1.2. Military Doctrine & Strategy 18
    • 3.1.3. Military Fleet Size 23
    • 3.1.4. Procurement Programs 28
    • 3.1.5. Social, Political and Economic Environment & Support for Defense Projects 30
    • 3.1.6. Political and Strategic Alliances 31
  • 3.2. Defense Market Size Historical and Forecast 32
    • 3.2.1. Israel's gross defense expenditure (inclusive of income dependent expenditure) to register a CAGR of 5.83% over 2019-2023 32
    • 3.2.2. Israel's net defense expenditure (excluding of income dependent expenditure) to register a CAGR of 5.18% over 2019-2023 35
    • 3.2.3. Israeli revenue dependent expenditure, inclusive of US military aid, will post a forecast-period CAGR of 8.27% 38
    • 3.2.4. Hostile neighborhood, combined with terrorist threats, will continue to drive Israeli defense expenditure 41
  • 3.3. Analysis of Defense Budget Allocation 43
    • 3.3.1. The defense budget as a percentage of GDP is expected to be 5% over the forecast period 43
  • 3.4. Analysis of Defense Budget Allocation 45
    • 3.4.1. The majority of Israel's defense budget is earmarked for capital expenditure 45
    • 3.4.2. Capital expenditure forecast to increase at a CAGR of 5.90% over 2019-2023 47
    • 3.4.3. Per capita defense expenditure expected to increase over the forecast period 50
  • 3.5. Homeland Security Market Size and Forecast 51
    • 3.5.1. Israeli homeland security market expected to grow at a CAGR of 6.00% over the forecast period 51
    • 3.5.2. Measures to curb illegal immigration and organized crime to drive homeland security expenditure over the forecast period 54
    • 3.5.3. Israel is "highly affected" by terrorism 55
    • 3.5.4. Israel faces a high level of threat from terrorist organizations 56
    • 3.5.5. Israel has a terrorism index score of 5.1 58
  • 3.6. Benchmarking with Key Global Markets 59
    • 3.6.1. Israel is one of the largest defense spenders in the Middle East 59
    • 3.6.2. The US has the largest defense expenditure in the world 61
    • 3.6.3. Israeli defense expenditure expected to reach 4.9% of GDP by 2023 62
  • 3.7. Market Opportunities: Key Trends and Growth Stimulators 63
    • 3.7.1. Top 10 Defense Sectors by Value (US$ Million) - Projections over 2018-2023 63
    • 3.7.2. Critical Infrastructure Protection - Physical Security 64
    • 3.7.3. Land-based C4ISR 65
    • 3.7.4. Multirole Aircraft 66

4. Defense Procurement Market Dynamics 67

  • 4.1. Import Market Dynamics 68
    • 4.1.1. Defense imports increased after 2013 reaching highest point in 2015 68
    • 4.1.2. The US accounted for over 59.8% of Israeli defense imports during 2013-2017 69
    • 4.1.3. Aircraft accounted for the majority of Israeli defense imports 70
  • 4.2. Export Market Dynamics 71
    • 4.2.1. Israel exports a major portion of its domestic defense production 71
    • 4.2.2. India, Azerbaijan and Vietnam emerged as the largest importers of Israeli defense equipment 72
    • 4.2.3. Missiles, sensors and air defense systems were the most exported defense goods 73

5. Industry Dynamics 74

  • 5.1. Five Forces Analysis 74
    • 5.1.1. Bargaining Power of Supplier: Medium-High 75
    • 5.1.2. Bargaining Power of Buyer: High 75
    • 5.1.3. Barrier to Entry: Low to Medium 75
    • 5.1.4. Intensity of Rivalry: High 75
    • 5.1.5. Threat of Substitution: Medium to High 76

6. Market Entry Strategy 77

  • 6.1. Market Regulation 77
    • 6.1.1. Offset policy requires foreign OEMs to invest 50% of the contract value in Israel 77
    • 6.1.2. Defense sector remains closed to foreign direct investment 77
  • 6.2. Market Entry Route 78
    • 6.2.1. Procurement Policy and Process 78
    • 6.2.2. Foreign companies penetrate the market by supplying arms 78
    • 6.2.3. Foreign OEMs form alliances to market products in the global defense industry 78
  • 6.3. Key Challenges 80
    • 6.3.1. Israeli defense industry highly dependent on the US 80
    • 6.3.2. Monopolistic competition 80

7. Competitive Landscape and Strategic Insights 81

  • 7.1. Competitive Landscape Overview 81
    • 7.1.1. Domestic companies fulfill the majority of Israeli defense requirements 83
  • 7.2. Key Foreign Companies 84
    • 7.2.1. General Dynamics: Overview 84
    • 7.2.2. General Dynamics: Products 84
    • 7.2.3. General Dynamics: Recent Announcements and Strategic Initiatives 84
    • 7.2.4. General Dynamics: Alliances 84
    • 7.2.5. General Dynamics: Recent Contract Wins 85
    • 7.2.6. Navistar Defense: Overview 86
    • 7.2.7. Navistar Defense: Products 86
    • 7.2.8. Navistar Defense: Recent Announcements and Strategic Initiatives 86
    • 7.2.9. Navistar Defense: Alliances 87
    • 7.2.10. Navistar Defense: Recent Contract Wins 87
    • 7.2.11. Lockheed Martin: Overview 88
    • 7.2.12. Lockheed Martin: Products 88
    • 7.2.13. Lockheed Martin: Recent Announcements and Strategic Initiatives 89
    • 7.2.14. Lockheed Martin: Alliances 89
    • 7.2.15. Lockheed Martin: Recent Contract Wins 90
    • 7.2.16. Raytheon: Overview 91
    • 7.2.17. Raytheon: Products 91
    • 7.2.18. Raytheon: Recent Announcements and Strategic Initiatives 92
    • 7.2.19. Raytheon: Alliances 92
    • 7.2.20. Raytheon: Recent Contract Wins 93
  • 7.3. Key Public Companies 94
    • 7.3.1. Rafael Advanced Defense Systems: Overview 94
    • 7.3.2. Rafael Advanced Defense Systems: Products 94
    • 7.3.3. Rafael Advanced Defense Systems: Recent Announcements and Strategic Initiatives 97
    • 7.3.4. Rafael Advanced Defense Systems: Alliances 98
    • 7.3.5. Rafael Advanced Defense Systems: Recent Contract Wins 99
    • 7.3.6. Israel Aerospace Industries: Overview 100
    • 7.3.7. Israel Aerospace Industries: Products 100
    • 7.3.8. Israel Aerospace Industries: Recent Announcements and Strategic Initiatives 101
    • 7.3.9. Israel Aerospace Industries: Alliances 103
    • 7.3.10. Israel Aerospace Industries: Recent Contract Wins 104
    • 7.3.11. Elta Systems: Overview 106
    • 7.3.12. Elta Systems: Overview 106
    • 7.3.13. IMI Systems: Overview 109
    • 7.3.14. IMI Systems: Products and Services 109
    • 7.3.15. IMI Systems: Recent Announcements and Strategic Initiatives 110
    • 7.3.16. IMI Systems: Alliances 111
    • 7.3.17. IMI Systems: Recent Contract Wins 112
  • 7.4. Domestic Private Companies 113
    • 7.4.1. Israel Shipyards: Overview 113
    • 7.4.2. Israel Shipyards: Products 113
    • 7.4.3. Israel Shipyards: Recent Announcements and Strategic Initiatives 113
    • 7.4.4. Israel Shipyards: Recent Contract Wins 114
    • 7.4.5. Elbit Systems: Overview 115
    • 7.4.6. Elbit Systems: Products 115
    • 7.4.7. Elbit Systems: Recent Announcements and Strategic Initiatives 117
    • 7.4.8. Elbit Systems: Alliances 118
    • 7.4.9. Elbit Systems: Recent Contract Wins 119
    • 7.4.10. Elbit Systems: Financial Analysis 122
    • 7.4.11. Elisra Systems: Overview 124
    • 7.4.12. Elisra Systems: Products 124
    • 7.4.13. Elisra Systems: Recent Announcements and Strategic Initiatives 125
    • 7.4.14. Elisra Systems: Alliances 126
    • 7.4.15. Elisra Systems: Recent Contract Wins 127
    • 7.4.16. TSG IT Advanced Systems Ltd.: Overview 128
    • 7.4.17. TSG IT Advanced Systems Ltd.: Products and Services 128
    • 7.4.18. TSG IT Advanced Systems Ltd.: Recent Announcements and Strategic Initiatives 129
    • 7.4.19. TSG IT Advanced Systems Ltd.: Alliances 130
    • 7.4.20. TSG IT Advanced Systems Ltd.: Recent Contract Wins 130
    • 7.4.21. Plasan: Overview 131
    • 7.4.22. Plasan: Products 131
    • 7.4.23. Plasan: Recent Announcements and Strategic Initiatives 131
    • 7.4.24. Plasan: Alliances 132
    • 7.4.25. Plasan: Recent Contract Wins 133
    • 7.4.26. SimiGon: Overview 134
    • 7.4.27. SimiGon: Products 134
    • 7.4.28. SimiGon: Recent Announcement and Strategic Initiatives 135
    • 7.4.29. SimiGon: Alliances 135
    • 7.4.30. SimiGon: Recent Contract Wins 136

8. Business Environment and Country Risk 138

  • 8.1. Economic Performance 138
    • 8.1.1. GDP Per Capita 138
    • 8.1.2. GDP, Current Prices 139
    • 8.1.3. Export of Goods and Services (LCU Billion) 140
    • 8.1.4. Import of Goods and Services (LCU Billion) 141
    • 8.1.5. Gross National Disposable Income (US$ Billion) 142
    • 8.1.6. Local Currency Unit per US Dollar 143
    • 8.1.7. Market Capitalization of Listed Companies 144
    • 8.1.8. Market Capitalization of Listed Companies (% of GDP) 145
    • 8.1.9. Government Cash Surplus/Deficit as a Percentage of GDP 146
    • 8.1.10. Goods exports as a Percentage of GDP 147
    • 8.1.11. Goods imports as a Percentage of GDP 148
    • 8.1.12. Service Imports as a Percentage of GDP 149
    • 8.1.13. Service Exports as a Percentage of GDP 150
    • 8.1.14. Foreign Direct Investment 151
    • 8.1.15. Net Foreign Direct Investment as a Percentage of GDP 152
    • 8.1.16. Mining, Manufacturing, Utilities Output (LCU Bn) 153

9. Appendix 154

  • 9.1. About GlobalData 154
  • 9.2. Disclaimer 154

List of Tables

  • Table 1: Israeli - Army Strength 23
  • Table 2: Israeli - Air Force Strength 25
  • Table 3: Israeli - Navy Strength 26
  • Table 4: Israeli - Ongoing Development and Procurement Programs, 2018 28
  • Table 5: Israeli - Future Procurement Programs, 2018 28
  • Table 6: Israeli Top Defense Procurement Programs by Value (US$ Million), 2018-2023 29
  • Table 7: Israeli Gross Defense Expenditure (ILS Billion & US$ Billion), 2014-2023 33
  • Table 8: Israeli Net Defense Expenditure (ILS Billion & US$ Billion), 2014-2023 36
  • Table 9: Israeli Income Dependent Defense Expenditure Including US Aid (ILS Billion and US$ Billion ), 2014-2023 38
  • Table 10: Israeli GDP Growth vs Defense Expenditure as a Percentage of GDP Growth, 2014-2023 43
  • Table 11: Israeli Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023 45
  • Table 12: Israeli Defense Capital Expenditure, (ILS Million & US$ Billion), 2014-2023 48
  • Table 13: Israeli Per Capita Defense Expenditure (US$), 2014-2023 50
  • Table 14: Israeli Homeland Security Expenditure, (ILS Billion & US$ Billion), 2014-2023 52
  • Table 15: Terrorism Index, 2018 56
  • Table 16: Benchmarking with Key Markets - 2014-2018 vs 2019-2023 59
  • Table 17: Top Israeli Defense Sectors by Value (US$ Million), 2018-2023 63
  • Table 18: Israeli Defense Offset Regulations 77
  • Table 19: Market Entry by Key Foreign OEMs 79
  • Table 20: Competitive Landscape of the Israeli Defense Industry 81
  • Table 21: Top Defense Suppliers in the Israeli Defense Industry By Value (US$ Million), 2018-2023 83
  • Table 22: General Dynamics - Products 84
  • Table 23: General Dynamics - Alliances 84
  • Table 24: General Dynamics - Recent Contract Wins 85
  • Table 25: Navistar Defense - Products 86
  • Table 26: Navistar Defense - Alliances 87
  • Table 27: Navistar Defense - Recent Contract Wins 87
  • Table 28: Lockheed Martin - Products 88
  • Table 29: Lockheed Martin - Alliances 89
  • Table 30: Lockheed Martin - Recent Contract Wins 90
  • Table 31: Raytheon - Products 91
  • Table 32: Raytheon - Alliances 92
  • Table 33: Raytheon - Recent Contract Wins 93
  • Table 34: Rafael Advanced Defense Systems - Products 94
  • Table 35: Rafael Advanced Defense Systems - Alliances 98
  • Table 36: Rafael Advanced Defense Systems - Recent Contract Wins 99
  • Table 37: Israel Aerospace Industries - Products 100
  • Table 38: Israel Aerospace Industries - Alliances 103
  • Table 39: Israel Aerospace Industries - recent contract wins 104
  • Table 40: Elta Systems - Key Products 106
  • Table 41: IMI Systems - Products and Services 109
  • Table 42: IMI Systems - Alliances 111
  • Table 43: IMI Systems - Recent Contract Wins 112
  • Table 44: Israel Shipyards - Products 113
  • Table 45: Israel Shipyards: Recent Contract Wins 114
  • Table 46: Elbit Systems - Products 115
  • Table 47: Elbit Systems - Alliances 118
  • Table 48: Elbit Systems - Recent Contract Wins 119
  • Table 49: Elisra Systems - Products 124
  • Table 50: Elisra Systems - Alliances 126
  • Table 51: Elisra Systems : Recent Contract Wins 127
  • Table 52: TSG IT Advanced Systems Ltd. - Products and Services 128
  • Table 53: TSG IT Advanced Systems Ltd. - Alliances 130
  • Table 54: TSG IT Advanced Systems Ltd. - Recent Contract Wins 130
  • Table 55: Plasan - Products 131
  • Table 56: Plasan - Alliances 132
  • Table 57: Plasan - Recent Contract Wins 133
  • Table 58: SimiGon - Products 134
  • Table 59: SimiGon - Alliances 135
  • Table 60: SimiGon - recent contract wins 136

List of Figures

  • Figure 1: Israeli Gross Defense Expenditure (ILS Billion), 2014-2023 33
  • Figure 2: Israeli Gross Defense Expenditure (US$ Billion), 2014-2023 34
  • Figure 3: Israeli Net Defense Expenditure (ILS Billion), 2014-2023 36
  • Figure 4: Israeli Net Defense Expenditure (US$ Billion), 2014-2023 37
  • Figure 5: Israeli Income Dependent Expenditure (ILS Billion), 2014-2023 39
  • Figure 6: Israeli Income Dependent Defense Expenditure (US$ Billion), 2014-2023 39
  • Figure 7: Israeli - Defense Budget Including Income Dependent Expenditure vs Israeli Defense Expenditure Excluding Income Dependent Expenditure (US$ Billion), 2014-2023 40
  • Figure 8: Israeli GDP Growth vs Defense Expenditure Growth and Defense Expenditure as a Percentage of GDP, 2014-2023 44
  • Figure 9: Israeli Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023 46
  • Figure 10: Israeli Capital Budget Allocation (ILS Billion), 2014-2023 48
  • Figure 11: Israeli Capital Budget Allocation (US$ Billion), 2014-2023 49
  • Figure 12: Israeli Per Capita Defense Expenditure (US$), 2014-2023 50
  • Figure 13: Israeli Homeland Security Budget (ILS Billion), 2014-2023 52
  • Figure 14: Israeli Homeland Security Budget (US$ billion), 2014-2023 53
  • Figure 15: Terrorism Heat Map, 2018 55
  • Figure 16: Terrorism Index, 2018 58
  • Figure 17: Benchmarking with Key Markets - 2014-2018 vs 2019-2023 60
  • Figure 18: Defense Expenditure of the World's Largest Military Spenders (US$ Billion), 2018 and 2023 61
  • Figure 19: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2018 62
  • Figure 20: Israel's Physical Security Market Size (US$ Million), 2018-2023 64
  • Figure 21: Israel's Land Based C4ISR Market Size (US$ Million), 2018-2023 65
  • Figure 22: Israel's Multirole Aircraft Market Size (US$ Million), 2018-2023 66
  • Figure 23: Top Israeli Defense Procurements in Terms of Their Supplier Relationships 67
  • Figure 24: Israel Defense Imports TIV Value (US$ Million), 2013-2017 68
  • Figure 25 : Israeli Arms Imports by Country, 2013-2017 69
  • Figure 26: Israeli Defense Imports by Category (%), 2013-2017 70
  • Figure 27 : Israeli Defense Exports TIV Value (US$ million), 2013-2017 71
  • Figure 28 : Israeli Defense Exports by Country (%), 2013-2017 72
  • Figure 29 : Israeli Defense Exports by Category (%), 2013-2017 73
  • Figure 30: Industry Dynamics - Porter's Five Forces Analysis 74
  • Figure 31: Elbit Systems, Revenue Trend Analysis, 2013-2017 122
  • Figure 32: Elbit Systems, Operating Profit Trend Analysis, 2013-2017 123
  • Figure 33: Elbit Systems, Net Profit Trend Analysis, 2013-2017 123
  • Figure 34: Israeli GDP Per Capita, 2015-2025 138
  • Figure 35: Israeli GDP, Current Prices (US$ Billion), 2015-2025 139
  • Figure 36: Israeli Export of Goods and Services (LCU Billion), 2005-2014 140
  • Figure 37: Israeli Import of Goods and Services (LCU Billion), 2005-2014 141
  • Figure 38: Israeli Gross National Disposable Income (US$ Billion), 2005-2014 142
  • Figure 39: Local Currency per US$, 2015-2024 143
  • Figure 40: Israeli Market Capitalization of Listed Companies (US$ Billion), 2005-2012 144
  • Figure 41: Israeli Market Capitalization of Listed Companies (% of GDP), 2005-2012 145
  • Figure 42: Israeli Government Cash Surplus/Deficit as a Percentage of GDP, 2005-2012 146
  • Figure 43: Israeli Goods Exports as a Percentage of GDP, 2005-2014 147
  • Figure 44: Israeli Goods Imports as a Percentage of GDP, 2005-2014 148
  • Figure 45: Israeli Service Imports as a Percentage of GDP, 2005-2014 149
  • Figure 46: Israeli Service Exports as a Percentage of GDP, 2005-2014 150
  • Figure 47: Israeli Foreign Direct Investment (US$ Billion), 2005-2014 151
  • Figure 48: Israeli Net Foreign Direct Investment as a Percentage of GDP, 2005-2014 152
  • Figure 49: Israeli Mining, Manufacturing, Utilities Output (LCU Bn), 2005-2014 153
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