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Market Research Report

German Defense Market: Market Attractiveness, Competitive Landscape and Forecast to 2024

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German Defense Market: Market Attractiveness, Competitive Landscape and Forecast to 2024
Published: April 30, 2019 Content info: 135 Pages
Description

German defense expenditure is expected to be US$295.9 billion cumulatively over 2020-2024. Germany has reassured the North Atlantic Treaty Organization (NATO) it will adhere to its plans to continue increasing military spending to reach 1.5% of gross domestic product by 2024 despite declining tax revenues in an attempt to strengthen the combat readiness of its armed forces. German defense expenditure is projected to increase at a CAGR of 6.48% over 2020-2024, compared to a CAGR of 8.48% over 2015-2019. A large portion of this budget will be directed towards the procurement of overhauled modern weapon systems and other advanced equipment.

The German MoD is anticipated to allocate an average of 19.5% of its total defense budget towards capital expenditure, with the remaining 80.5% assigned to revenue expenditure. Germany's government is considering purchasing 45 Boeing F/A-18 fighter jets for its air force to replace its aging Tornado fleet. In addition, German defense expenditure will also be driven by the country's involvement in peacekeeping operations. Most of the German soldiers and police officers currently deployed on peace missions are serving with the United Nations peace mission in Mali (MINUSMA), Afghanistan, KFOR in Kosovo and also has a large military contingent serving in the EU mission EUNAVOR MED (Operation Sophia) in the Mediterranean. Germany has the second largest commitment to peacekeeping operations among European countries, after the UK.

A well-established domestic defense industry was able to meet the requirements of the German defense ministry over the historic period. Germany mostly imported equipment in areas where it lacked competency or technological capability, such as satellite radar systems, air defense systems, and missiles. However, the German government is seeking approval from the parliament for major military purchases, such as helicopters, UAVs and rocket launchers, valued at several billion euros.

Germany encourages Foreign Direct Investment (FDI) in all areas of its domestic defense industry as part of its open economy policy, which allows foreign corporations to own a 100% stake in a German defense firm. Many foreign OEMs have successfully established subsidiaries by merging with existing German companies to form a conglomerate, or have formed joint ventures (JV) with domestic firms to enter the market. However, in December 2018, Germany toughened rules on non-EU share purchases and acquisitions of its strategic companies, amid growing disquiet about takeovers by Chinese firms.

The report "German Defense Market: Market Attractiveness, Competitive Landscape and Forecast to 2024", offers detailed analysis of the German 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.

Companies Mentioned: Saab, Airbus Helicopters, Sikorsky, Northrop Grumman Corp, Lockheed Martin Corp., Leonardo, Daewoo Shipbuilding & Marine Engineering

Scope

The report provides an in-depth analysis of the following -

  • The German defense industry market size and drivers: detailed analysis of the German defense industry during 2020-2024, 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 German defense industry.

Reasons to buy

  • This report will give the user confidence to make the correct business decisions based on a detailed analysis of the German 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 the German defense industry covering sections including demand drivers, key trends and latest industry contracts.
Table of Contents
Product Code: GDDF0571MR

Table of Contents

1. Introduction

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

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. Social, Political and Economic Environment and Support for Defense Projects
    • 3.1.6. Political and Strategic Alliances
  • 3.2. Defense Market Size Historical and Forecast
    • 3.2.1. Germany's defense expenditure is expected to increase at a CAGR of 6.48% over 2020-2024
    • 3.2.2. Maintenance of the country's armed forces and peacekeeping operations to drive defense expenditure over the forecast period
    • 3.2.3. German defense expenditure as a percentage of GDP expected to decrease
  • 3.3. Analysis of Defense Budget Allocation
    • 3.3.1. Germany to allocate a higher share towards revenue expenditure than capital expenditure over the forecast period
    • 3.3.2. Capital expenditure is expected to increase at a CAGR of 6.46% over the forecast period
    • 3.3.3. Per capita defense expenditure is expected to increase significantly between 2019-2024
  • 3.4. Homeland Security Market Size and Forecast
    • 3.4.1. German homeland security expenditure is expected to increase at a CAGR of 11.09% during the forecast period
    • 3.4.2. Counter terrorism and cyber security to drive homeland security expenditure
  • 3.5. Benchmarking with Key Global Markets
    • 3.5.1. The German defense budget is expected to increase over the forecast period
    • 3.5.2. Germany's defense expenditure is expected to be one of the top among European countries
    • 3.5.3. Germany allocates a lower share of GDP to defense compared to other European countries
  • 3.6. Market Opportunities: Key Trends and Growth Stimulators
    • 3.6.1. Top 10 Defense Market Sectors by Value (US$ Million) - Projections over 2019-2024
    • 3.6.2. Multi-role Aircraft MRO
    • 3.6.3. IFV
    • 3.6.4. Transport Aircraft Engines

4. Defense Procurement Market Dynamics

  • 4.1. Import Market Dynamics
    • 4.1.1. Defense imports are expected to increase slightly during the forecast period after the recent dip
    • 4.1.2. Germany sourced most of its arms imports from the US
    • 4.1.3. Missiles and sensors dominate military hardware imports
  • 4.2. Export Market Dynamics
    • 4.2.1. Arms exports recovered in 2016 after a decrease in 2014 and 2015 but are again slowly declining due to Germany's arms embargoes
    • 4.2.2. South Korea, Greece and Israel are Germany's biggest arms importers
    • 4.2.3. Naval vessels 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. Threshold for foreign direct investment screening lowered to 10% for the defense sector
  • 6.2. Market Entry Route
    • 6.2.1. Budget Process
    • 6.2.2. Procurement Policy and Process
    • 6.2.3. Germany Toughened Rules for Non-EU Buyouts
    • 6.2.4. The German Government Wants to Dissuade Unwanted Takeovers by Chinese Investors
  • 6.3. Key Challenges
    • 6.3.1. Project delays deter defense industry growth
    • 6.3.2. German arms exports to large defense markets outside the EU are minimal

7. Competitive Landscape and Strategic Insights

  • 7.1. Competitive Landscape Overview
    • 7.1.1. Germany Market Share Analysis, 2019-2024
    • 7.1.2. Foreign OEMs have strong collaborations with domestic defense firms
  • 7.2. Key Companies
    • 7.2.1. Diehl Stiftung: Overview
    • 7.2.2. Diehl Stiftung: Products
    • 7.2.3. Diehl Stiftung: Recent Announcements and Strategic Initiatives
    • 7.2.4. Diehl Stiftung: Alliances
    • 7.2.5. Diehl Stiftung: Recent Contract Wins
    • 7.2.6. Airbus Group: Overview
    • 7.2.7. Airbus Group: Products
    • 7.2.8. Airbus Group: Recent Announcements and Strategic Initiatives
    • 7.2.9. Airbus Group: Alliances
    • 7.2.10. Airbus Group: Recent Contract Wins
    • 7.2.11. Airbus Group: Financial Analysis
    • 7.2.12. Heckler & Koch: Overview
    • 7.2.13. Heckler & Koch: Products
    • 7.2.14. Heckler and Koch: Recent Announcements and Strategic Initiatives
    • 7.2.15. Heckler and Koch: Recent Contract Wins
    • 7.2.16. MAN Truck & Bus AG: Overview
    • 7.2.17. MAN Truck & Bus AG: Products and Services
    • 7.2.18. MAN Truck & Bus AG: Recent Announcements and Strategic Initiatives
    • 7.2.19. MAN Truck & Bus AG: Alliances
    • 7.2.20. MAN Truck & Bus AG: Recent Contract Wins
    • 7.2.21. Airbus Helicopters: Overview
    • 7.2.22. Airbus Helicopters: Products and Services
    • 7.2.23. Airbus Helicopters: Recent Announcements and Strategic Initiatives
    • 7.2.24. Airbus Helicopters: Alliances
    • 7.2.25. Airbus Helicopters: Recent Contract Wins
    • 7.2.26. ESG Elektroniksystem-und Logistik: Overview
    • 7.2.27. ESG Elektroniksystem-und Logistik: Products
    • 7.2.28. ESG Elektroniksystem-und Logistik: Recent Announcements and Strategic Initiatives
    • 7.2.29. ESG Elektroniksystem-und Logistik: Alliances
    • 7.2.30. ESG Elektroniksystem-und Logistik: Recent Contract Wins
    • 7.2.31. ThyssenKrupp Marine Systems (TKMS): Overview
    • 7.2.32. ThyssenKrupp Marine Systems (TKMS): Products
    • 7.2.33. ThyssenKrupp Marine Systems (TKMS): Recent Announcements and Strategic Initiatives
    • 7.2.34. ThyssenKrupp Marine Systems: Alliances
    • 7.2.35. ThyssenKrupp Marine Systems: Recent Contract Wins
    • 7.2.36. Thales Deutschland: Overview
    • 7.2.37. Thales Deutschland: Products
    • 7.2.38. Thales Deutschland: Recent Announcements and Strategic Initiatives
    • 7.2.39. Thales Deutschland: Alliances
    • 7.2.40. Thales Deutschland: Recent Contract Wins
    • 7.2.41. MBDA: Overview
    • 7.2.42. MBDA: Products
    • 7.2.43. MBDA: Recent Announcements and Strategic Initiatives
    • 7.2.44. MBDA: Alliances
    • 7.2.45. MBDA: Recent Contract Wins
    • 7.2.46. Eurofighter Jagdflugzeug: Overview
    • 7.2.47. Eurofighter Jagdflugzeug: Products
    • 7.2.48. Eurofighter Jagdflugzeug: Recent Announcements and Strategic Initiatives
    • 7.2.49. Eurofighter Jagdflugzeug: Recent Contract Wins
    • 7.2.50. Rheinmetall: Overview
    • 7.2.51. Rheinmetall: Products and Services
    • 7.2.52. Rheinmetall: Recent Announcements and Strategic Initiatives
    • 7.2.53. Rheinmetall: Alliances
    • 7.2.54. Rheinmetall: Recent Contract Wins
    • 7.2.55. Rheinmetall: Financial Analysis

8. Business Environment and Country Risk

  • 8.1. Economic Performance
    • 8.1.1. Gross Domestic per Capita
    • 8.1.2. Gross Domestic Product, Current US$
    • 8.1.3. Exports of Goods and Services
    • 8.1.4. Imports of Goods and Services
    • 8.1.5. Gross National Disposable Income
    • 8.1.6. Local Currency Unit per US$
    • 8.1.7. Market Capitalization of Listed Companies
    • 8.1.8. Market Capitalization of Listed Companies as a Percentage of GDP
    • 8.1.9. Total 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. Services Exports as a Percentage of GDP
    • 8.1.13. Services Imports as a Percentage of GDP
    • 8.1.14. Foreign Direct Investments, Net (BoP, Current US$ Billion)
    • 8.1.15. Net Foreign Direct Investment as a Percentage of GDP
    • 8.1.16. Mining, Manufacturing, Utilities, Output (LCU billion)

9. Appendix

  • 9.1. About GlobalData
  • 9.2. Disclaimer

List of Tables

  • Table 1: German Army
  • Table 2: German Air Force
  • Table 3: German Navy Strength
  • Table 4: German - Ongoing Development and Procurement Programs
  • Table 5: German - Future Procurement Programs
  • Table 6: Top German Defense Procurement Programs by Value (US$ Million), 2019-2024
  • Table 7: Germany Defense Expenditure (EUR Billion and US$ Billion), 2015-2024
  • Table 8: GDP Growth and Defense Expenditure as a Percentage of GDP Growth, 2015-2024
  • Table 9: German Defense Budget Split Between Capital and Revenue Expenditure (%), 2015-2024
  • Table 10: German Defense Capital Expenditure (EUR Million and US$ Million), 2015-2024
  • Table 11: Per Capita Defense Expenditure (US$), 2015-2024
  • Table 12: German Homeland Security Expenditure (EUR Billion and US$ Billion), 2015-2024
  • Table 13: Benchmarking with Key Markets - 2015-2019 vs. 2020-2024
  • Table 14: Top German Defense Market Sectors by Value (US$ Million), 2019-2024
  • Table 15: Key Foreign Players and Operations in the German Defense Industry
  • Table 16: Competitive Landscape of the German Defense Industry
  • Table 17: Top Defense Suppliers in the German Defense Industry - By Value (US$ Million) 2019-2024
  • Table 18: Diehl Stiftung - Products
  • Table 19: Diehl Stiftung - Alliances
  • Table 20: Diehl Stiftung - Recent Contract Wins
  • Table 21: Airbus Group - Products
  • Table 22: Airbus Group - Alliances
  • Table 23: Airbus Group - Recent Contract Wins
  • Table 24: Heckler & Koch GmbH (HK) - Products
  • Table 25: Heckler & Koch - Recent Contract Wins
  • Table 26: MAN Truck & Bus AG - Products and Services
  • Table 27: MAN Truck & Bus AG - Alliances
  • Table 28: MAN Truck & Bus AG - Recent Contract Wins
  • Table 29: Airbus Helicopters - Products and Services
  • Table 30: Airbus Helicopters - Alliances
  • Table 31: Airbus Helicopters - Contract Wins
  • Table 32: ESG Elektroniksystem-und Logistik (ESG) - Products
  • Table 33: ESG Elektroniksystem-und Logistik - Alliances
  • Table 34: ESG Elektroniksystem-und Logistik - Recent Contract Wins
  • Table 35: ThyssenKrupp Marine Systems (TKMS) - Products
  • Table 36: ThyssenKrupp Marine Systems - Alliances
  • Table 37: ThyssenKrupp Marine Systems - Recent Contract Wins
  • Table 38: Thales Deutschland - Products
  • Table 39: Thales Deutschland - Alliances
  • Table 40: Thales Deutschland - Contracts Wins
  • Table 41: MBDA - Products
  • Table 42: MBDA - Alliances
  • Table 43: MBDA - Recent Contract Wins
  • Table 44: Eurofighter Jagdflugzeug - Products
  • Table 45: Eurofighter Jagdflugzeug - Recent Contract Wins
  • Table 46: Rheinmetall - Products and Services
  • Table 47: Rheinmetall - Alliances
  • Table 48: Rheinmetall - Recent Contract Wins

List of Figures

  • Figure 1: German Defense Budget, 2020 and 2024
  • Figure 2: German Defense Imports/Exports, 2014 and 2018
  • Figure 3: Germany's Top Three Prospective Procurements/Developments
  • Figure 4: German National Security Threats
  • Figure 5: Germany's Partnering Countries for Defense Cooperation and Military Training
  • Figure 6: German Defense Expenditure (EUR Billion), 2015-2024
  • Figure 7: German Defense Expenditure (US$ Billion), 2015-2023
  • Figure 8: GDP Growth and Defense Expenditure as a Percentage of GDP Growth, 2015-2024
  • Figure 9: German Defense Expenditure Split Between Capital and Revenue Expenditure (%), 2015-2024
  • Figure 10: German Defense Capital Expenditure (EUR Billion), 2015-2024
  • Figure 11: German Defense Capital Expenditure (US$ Billion), 2015-2024
  • Figure 12: German Per Capita Defense Expenditure (US$), 2015-2024
  • Figure 13: German Homeland Security Expenditure (EUR Billion), 2015-2024
  • Figure 14: Germany Homeland Security Expenditure (US$ Billion), 2015-2024
  • Figure 15: Benchmarking with Key Markets - 2015-2019 vs. 2019-2024
  • Figure 16: Defense Expenditure of the World's Largest Military Spenders (US$ Billion), 2019 and 2024
  • Figure 17: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2019
  • Figure 18: Multi-role Aircraft MRO Market Size (US$ Million), 2019-2024
  • Figure 19: IFV Market Size (US$ Million), 2019-2024
  • Figure 20: Transport Aircraft Engine Market Size (US$ Million), 2019-2024
  • Figure 21: Top German Defense Procurements in Terms of Their Supplier Relationships
  • Figure 22: German Defense Imports Trend, 2014-2018 (TIV Values)
  • Figure 23: German Defense Imports by Country (%), 2014-2018
  • Figure 24: German Defense Imports by Category (%), 2014-2018
  • Figure 25: German Defense Exports Trend, 2014-2018 (TIV values)
  • Figure 26: German Defense Exports by Country (%), 2014-2018
  • Figure 27: German Defense Exports by Category (%), 2013-2017
  • Figure 28: Industry Dynamics Porter's Five Forces Analysis
  • Figure 29: Germany's Budgeting Process
  • Figure 30: Key Challenges in German Defense Market
  • Figure 31: Germany Market Share Analysis, 2019-2024
  • Figure 32: Airbus Group - Revenue Trend Analysis (EUR Billion), 2013-2017
  • Figure 33: Airbus Group - Operating Profit Trend Analysis (EUR Billion), 2013-2017
  • Figure 34: Airbus Group - Net Profit Trend Analysis (EUR Billion), 2013-2017
  • Figure 35: Rheinmetall - Revenue Trend Analysis (EUR Billion), 2013-2017
  • Figure 36: Rheinmetall - Operating Profit Trend Analysis (EUR Million), 2013-2017
  • Figure 37: Rheinmetall - Net Profit Trend Analysis (EUR Million), 2013-2017
  • Figure 38: Germany GDP per Capita, 2015-2025
  • Figure 39: Germany Gross Domestic Product (current US$ Billion), 2015-2025
  • Figure 40: Germany Exports of Goods and Services (LCU Billion), 2005-2014
  • Figure 41: Germany Imports of Goods and Services (LCU Billion), 2005-2014
  • Figure 42: Germany Gross National Disposable Income (US$ Billion), 2005-2012
  • Figure 43: Germany LCU per US$, 2015-2024
  • Figure 44: Germany Market Capitalization of Listed Companies (US$ Billion), 2005-2012
  • Figure 45: Germany Market Capitalization of Listed Companies as a Percentage of GDP, 2005-2012
  • Figure 46: Germany Government Cash Surplus/Deficit as a Percentage of GDP, 2005-2012
  • Figure 47: Germany Goods Exports as a Percentage of GDP, 2005-2014
  • Figure 48: Germany Goods Imports as a Percentage of GDP, 2005-2014
  • Figure 49: Germany Services Exports as a Percentage of GDP, 2005-2014
  • Figure 50: Germany Services Imports as a Percentage of GDP, 2005-2014
  • Figure 51: Foreign Direct Investments, Net (BoP, Current US$ Billion) 2005-2013
  • Figure 52: Germany Net Foreign Direct Investment as a % of GDP, 2005-2013
  • Figure 53: Mining, Manufacturing, Utilities Output (LCU billion), 2005-2014
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