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Market Research Report

Swiss Defense Market - Attractiveness, Competitive Landscape and Forecasts to 2024

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Swiss Defense Market - Attractiveness, Competitive Landscape and Forecasts to 2024
Published: May 27, 2019 Content info: 93 Pages
Description

Switzerland's military expenditure, which stands at US$5.27 billion in 2019, is anticipated to grow from US$5.32 billion in 2020 to value US$5.89 billion in 2024, registering a CAGR of 2.59%, over the forecast period. With a neutral stance during times of war and a reputation for being a peace loving nation, Switzerland has traditionally made only modest budget allocations to defense. In 2019, the Swiss Government increased its defense budget expenditure by 9.9% compared to the previous year.

The defense budget as a percentage of GDP is expected to decrease marginally from an average of 0.69% during 2015-2019 to 0.67% over 2020-2024. The country's per capita defense expenditure is expected to increase from US$612.0 in 2020 to US$646.5 in 2024. The Swiss homeland security expenditure valued US$1.3 billion in 2020 and is expected to grow at a CAGR of 2.55% to reach US$1.5 billion in 2024, over the forecast period.

The growth will primarily be fueled by government plans to invest in military equipment and devices based on new technologies, replacing outdated equipment. Switzerland is an active participant in joint operations in the peacekeeping operations with NATO and the United Nations (UN), and as such, is targeting higher spending in terms of its defense sector. This, along with the Air 2030 program that the country is anticipated to undertake over the next coming years, is expected to drive Switzerland's defense expenditure over the forecast period.

Over the forecast period, the country's capital expenditure allocation is expected to average 35.5%, and revenue expenditure is expected to cap at an average of 64.5%. Capital expenditure over the forecast period is expected to increase at a CAGR of 3.47%, from US$1.9 billion in 2020 to US$2.1 billion in 2024, due to the significant uptick in weapon procurement plans, as well as the procurement of defense equipment to replace outdated ones.

Swiss defense imports increased drastically from 2014 to 2016, before declining in 2017 and 2018. The country sourced the majority of its defense equipment from the US, accounting for 68.6% of total imports during 2014-2018. The major countries importing military equipment include Germany, Sweden and Norway. Over the forecast period, Switzerland's arms imports will continue to be dominated by the US and the European suppliers. The country's defense exports reveal a declining trend from 2015 to 2018, after a high rise in 2015. During 2014-2018, Saudi Arabia, China, and Indonesia were the three largest consumers of the country's defense equipment.

The report "Swiss Defense Market - Attractiveness, Competitive Landscape and Forecasts to 2024" offers detailed analysis of the Swiss 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 defense industry market size and drivers: detailed analysis of the Swiss 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
  • Porter's Five Force analysis of the Swiss 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
  • Competitive landscape and strategic insights: analysis of the competitive landscape of the Swiss defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis

Scope

  • Switzerland's military expenditure, which stands at US$5.27 billion in 2019, is anticipated to grow from US$5.32 billion in 2020 to value US$5.89 billion in 2024, registering a CAGR of 2.59%, over the forecast period.
  • With a neutral stance during times of war and a reputation for being a peace loving nation, Switzerland has traditionally made only modest budget allocations to defense. In 2019, the Swiss Government increased its defense budget expenditure by 9.9% compared to the previous year.
  • The growth will primarily be fueled by government plans to invest in military equipment and devices based on new technologies, replacing outdated equipment.

Reasons to buy

  • This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Swiss 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 Swiss defense industry covering sections including demand drivers, Porter's Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts

Companies mentioned - Elbit Systems, Thales Group, Revision Military, Inc., Pilatus Group, RUAG Defense, General Dynamics European Land Systems (GDELS), Pilatus Group, RUAG Defense, General Dynamics European Land Systems, Rheinmetall Air Defense AG, Atos AG, Meteolabor AG.

Table of Contents
Product Code: GDDF0574MR

Table of Contents

  • LIST OF FIGURES
  • LIST OF TABLES

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. Procurement Programs
    • 3.1.4. Geopolitical and Economic Scenario
    • 3.1.5. Political & Strategic Alliances
  • 3.2. Defense Market Size Historical and Forecast
    • 3.2.1. Swiss defense budget is expected to register a CAGR of 2.59% over the forecast period
    • 3.2.2. Procurement of better defense systems and peace-support programs to drive defense expenditure
    • 3.2.3. Defense expenditure as a percentage of GDP is expected to average 0.69% over the forecast period
  • 3.3. Analysis of Defense Budget Allocation
    • 3.3.1. Capital expenditure's share expected to increase over the forecast period
    • 3.3.2. Capital expenditure expected to grow at a CAGR of 3.47% over the forecast period
    • 3.3.3. Per capita defense expenditure expected to increase over the forecast period
  • 3.4. Homeland Security Market Size and Forecast
    • 3.4.1. Swiss homeland security expenditure expected to increase at a CAGR of 2.55% over the forecast period
    • 3.4.2. Organized crime and terrorist financing are the major threats to homeland security
  • 3.5. Benchmarking with Key Global Markets
    • 3.5.1. Switzerland's defense budget to increase at a CAGR of 2.59% over the forecast period
    • 3.5.2. Switzerland military expenditure is low when compared to the largest defense spenders
    • 3.5.3. The country allocates a lower percentage of GDP towards defense compared to other top defense spenders globally
  • 3.6. Market Opportunities: Key Trends
    • 3.6.1. Top 10 Defense market sectors by value (US$ Million) - Projections over period 2019-2024
    • 3.6.2. Land-based C4ISR
    • 3.6.3. Software
    • 3.6.4. Networking

4. Defense Procurement Market Dynamics

  • 4.1. Import Market Dynamics
    • 4.1.1. Defense imports to be driven by modernization initiatives over the forecast period
    • 4.1.2. Switzerland sourced the majority of its arms from the US
    • 4.1.3. Missiles accounted for the majority of defense imports during 2013-2017
  • 4.2. Export Market Dynamics
    • 4.2.1. Swiss defense exports peaked in 2015 and registered their highest level since 2009
    • 4.2.2. Switzerland supplies defense equipment to a diverse consumer base
    • 4.2.3. Aircraft accounted for the majority of the country's defense exports during 2014-2018

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 to medium
    • 5.1.4. Intensity of Rivalry: high
    • 5.1.5. Threat of Substitution: medium to high

6. Market Entry Strategy

  • 6.1. Market Regulation
    • 6.1.1. Offset policy requires suppliers to invest 100% of the contract value into the Swiss economy
    • 6.1.2. Swiss defense industry open to foreign direct investment
  • 6.2. Market Entry Route
    • 6.2.1. Budgeting Process
    • 6.2.2. Foreign defense companies enter the market via acquisitions or alliances
    • 6.2.3. Establishment of subsidiary or operating unit in Switzerland
    • 6.2.4. Entering into joint ventures
  • 6.3. Key Challenges
    • 6.3.1. Switzerland's defense neutrality challenging for defense foreign companies
    • 6.3.2. Low defense budget and lack of external threat act as an obstacle for foreign investors
    • 6.3.3. Domestic defense companies facing challenges from foreign companies

7. Competitive Landscape and Strategic Insights

  • 7.1. Competitive Landscape Overview
    • 7.1.1. Swiss Market Share Analysis, 2018
  • 7.2. Key Private Sector Operators
    • 7.2.1. Pilatus Group: overview
    • 7.2.2. Pilatus Group: defense products
    • 7.2.3. Pilatus Group: recent announcements and strategic initiatives
    • 7.2.4. Pilatus Group: alliances
    • 7.2.5. Pilatus Group: recent contract awards
    • 7.2.6. RUAG Defense: overview
    • 7.2.7. RUAG Defense: products and services
    • 7.2.8. RUAG Defense: recent announcements and strategic initiatives
    • 7.2.9. RUAG Defense: alliances
    • 7.2.10. RUAG Defense: recent contract awards
    • 7.2.11. Thales: overview
    • 7.2.12. Thales: products and services
    • 7.2.13. General Dynamics European Land Systems: overview
    • 7.2.14. General Dynamics European Land Systems: defense products
    • 7.2.15. General Dynamics European Land Systems: recent announcements and strategic initiatives
    • 7.2.16. General Dynamics European Land Systems: alliances
    • 7.2.17. General Dynamics European Land Systems: recent contract wins
    • 7.2.18. Rheinmetall Air Defense AG: overview
    • 7.2.19. Rheinmetall Air Defense AG: products and services
    • 7.2.20. Rheinmetall Air Defense AG: recent announcements and strategic initiatives
    • 7.2.21. Rheinmetall AirDefense: alliances
    • 7.2.22. Rheinmetall Air Defense AG: recent contract wins
    • 7.2.23. Atos AG: overview
    • 7.2.24. Atos AG: defense services
    • 7.2.25. Meteolabor AG: overview
    • 7.2.26. Meteolabor AG: products

8. Business Environment and Country Risk

  • 8.1. Economic Performance
    • 8.1.1. GDP Per Capita
    • 8.1.2. GDP, Current Prices
    • 8.1.3. Exports of Goods and Services (current LCU Billion)
    • 8.1.4. Imports of Goods and Services (current LCU Billion)
    • 8.1.5. Local Currency Unit per US Dollar
    • 8.1.6. Market Capitalization of Listed Companies (US$ Billion)
    • 8.1.7. Market Capitalization of Listed Companies (% of GDP)
    • 8.1.8. Government Cash Surplus/Deficit as a Percentage of GDP (LCU)
    • 8.1.9. Goods Imports as a Percentage of GDP
    • 8.1.10. Goods Exports as a Percentage of GDP
    • 8.1.11. Services Imports as a Percentage of GDP
    • 8.1.12. Service Exports as a Percentage of GDP
    • 8.1.13. Foreign Direct Investment, net (BoP, current US$ Billion)
    • 8.1.14. Net Foreign Direct Investment as a Percentage of GDP
    • 8.1.15. Mining, Manufacturing, Utilities Output LCU Billion

9. Appendix

  • 9.1. About GlobalData
  • 9.2. Disclaimer

List of Tables

  • Table 1: Swiss Ongoing Procurement Programs
  • Table 2: Swiss Future Procurement Programs
  • Table 3: Votes concerning the Swiss Armed Forces since 1989
  • Table 4: Swiss Defense Expenditure (CHF Billion & US$ Billion), 2015-2024
  • Table 5: Swiss GDP Growth vs. Defense Expenditure as a Percentage of GDP, 2015-2024
  • Table 6: Swiss Defense Budget Split Between Capital and Revenue Expenditure (%), 2015-2024
  • Table 7: Swiss Defense Capital Expenditure (CHF Billion & US$ Billion), 2015-2024
  • Table 8: Swiss Per Capita Defense Expenditure (US$), 2015-2024
  • Table 9: Swiss Homeland Security Expenditure (CHF Billion & US$ Billion), 2015-2024
  • Table 10: Benchmarking with Key Markets - 2015-2019 vs. 2020-2024
  • Table 11: Top 10 Swiss Defense Market Sectors by Value (US$ Million) - 2019-2024
  • Table 12: Offset Regulations in Switzerland
  • Table 13: Competitive Landscape of the Swiss Defense Industry
  • Table 14: Switzerland - Top Defense Suppliers by Value (US$ Million),2019-2024
  • Table 15: Pilatus Group - Product Focus
  • Table 16: Pilatus Group: Alliances
  • Table 17: Pilatus Group: Recent Contract Awards
  • Table 18: RUAG Defense- Product and Service Focus
  • Table 19: RUAG Defense: Alliances
  • Table 20: RUAG Defense: Recent Contract Awards
  • Table 21: Thales - Product and Service Focus
  • Table 22: General Dynamics European Land Systems - Product Focus
  • Table 23: General Dynamics European Land Systems: Alliances
  • Table 24: General Dynamics European Land Systems: Recent Contract Wins
  • Table 25: Rheinmetall Air Defense AG - Product and Service Focus
  • Table 26: Rheinmetall AirDefense: Alliances
  • Table 27: Rheinmetall Air Defense: Recent Contract Wins
  • Table 28: Atos AG - Service Focus
  • Table 29: Meteolabor AG - Product Focus

List of Figures

  • Figure 1: Swiss Defense Budget: 2020 and 2024
  • Figure 2 : Swiss Defense Imports/Exports: 2014 and 2018
  • Figure 3: Switzerland's Top Prospective Procurements/Developments
  • Figure 4: Swiss National Security Threats
  • Figure 5: Swiss Defense Expenditure (CHF Billion), 2015-2024
  • Figure 6: Swiss Defense Expenditure (US$ Billion), 2015-2024
  • Figure 7: Swiss GDP Growth vs. Defense Expenditure as Percentage of GDP Growth, 2015-2024
  • Figure 8: Swiss Defense Budget Split Between Capital and Revenue Expenditure (%), 2015-2024
  • Figure 9: Swiss Capital Budget Allocation (CHF Billion), 2015-2024
  • Figure 10: Swiss Capital Budget Allocation (US$ Billion), 2015-2024
  • Figure 11: Swiss Per Capita Defense Expenditure (US$), 2015-2024
  • Figure 12: Swiss Homeland Security Expenditure (CHF Billion), 2015-2024
  • Figure 13: Swiss Homeland Security Budget (US$ Billion), 2015-2024
  • Figure 14: Benchmarking with Key Markets - 2015-2019 vs. 2020-2024
  • Figure 15: Defense Expenditure of the World's Largest Military Spenders (US$ Billion), 2019 and 2024
  • Figure 16: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2019
  • Figure 17: Land-based C4ISR Market Size (US$ Million), 2019-2024
  • Figure 18: Software Market Size (US$ Million), 2019-2024
  • Figure 19: Networking Market Size (US$ Million), 2019-2024
  • Figure 20: Switzerland - Defense Procurements in Terms of Supplier Relationships, 2019
  • Figure 21: Swiss Defense Import Trend (US$ million), 2014-2018 (TIV values)
  • Figure 22: Swiss Defense Imports by Country (%), 2014-2018
  • Figure 23: Swiss Defense Imports by Category (%), 2014-2018
  • Figure 24: Swiss Defense Exports Trend (US$ Million), 2014-2018
  • Figure 25: Swiss Defense Exports by Country (%), 2014-2018
  • Figure 26: Swiss Defense Exports by Category (%), 2014-2018
  • Figure 27: Industry Dynamics - Porter's Five Forces Analysis
  • Figure 28: The Swiss Budgeting Process
  • Figure 29: Key Challenges in Swiss Defense Market
  • Figure 30: Swiss Market Share Analysis, 2018
  • Figure 31: Swiss GDP Per Capita at Constant Prices (US$), 2015-2025
  • Figure 32: Swiss GDP, Current Prices (US$ Billion), 2015-2025
  • Figure 33: Swiss Exports of Goods and Services (current LCU Billion), 2005-2014
  • Figure 34: Swiss Imports of Goods and Services (current LCU Billion), 2005-2014
  • Figure 35: Local Currency per USD, 2015-2024
  • Figure 36: Swiss Market Capitalization of Listed Companies (US$ Billion), 2005-2012
  • Figure 37: Swiss Market Capitalization of Listed Companies (% of GDP), 2005-2012
  • Figure 38: Swiss Government Cash Surplus/Deficit as a % of GDP (LCU), 2005-2011
  • Figure 39: Swiss Goods imports as a % of GDP, 2005-2014
  • Figure 40: Swiss Goods Exports as a % of GDP, 2005-2014
  • Figure 41: Swiss Services Imports as a % of GDP, 2005-2014
  • Figure 42: Swiss Service Exports as a % of GDP, 2005-2014
  • Figure 43: Swiss Foreign Direct Investment, net (BoP, current US$ Billion), 2005-2014
  • Figure 44: Swiss Net Foreign Direct Investment as a % of GDP, 2005-2014
  • Figure 45: Swiss Mining, Manufacturing, Utilities Output (LCU Billion), 2005-2014
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