Germany - Defenseand Security: A self-reliant industry (Strategy, Performance and Risk Analysis)
The aircraft category remains one of the key growth drivers of the German defense and security industry, accounting for 27.0% of capital expenditure in 2016; followed by the others category with 25.4%. Recent budget cuts to reduce the country’s fiscal deficit resulted in a decline in defense spending at a CAGR of -1.8%, from US$41.0 billion in 2012 to US$38.0 billion in 2016. However, due to planed government initiatives to modernize its arsenal, the budget will post a forecast-period CAGR of 1.3% to reach US$39.2 billion in 2021.
MarketLine’s premium reports provide a comprehensive overview of each market within a country’s defense industry; benchmark key performance indicators against regional and global peers; review industry trends and drivers; evaluate the competitive landscape and innovation potential of singular markets; and conduct data-driven SWOT analysis to ascertain a structured assessment of the performance of each territory represented.Key Highlights
Germany initiated various procurement and modernization initiatives:
Germany initiated a soldier modernization initiative called Future Soldier System (Infanterist der Zukunft) to provide its defense personnel with advanced training equipment. Its aircraft and rotorcraft fleets are aging and the MoD aims to modernize these platforms through the procurement of state-of-the-art hardware. Modernization programs include NH90 Tactical Transport Helicopters and Sea Lion variants for the NATO Frigate Helicopter (NFH) and Puma IFV projects.
Country’s imports declined due to strong domestic output:
Imports fell at a CAGR of -29.9%, from US$157.0 million in 2012 to US$38.0 million in 2016, owing to a decline in imports from the US and the ability of domestic companies to meet military requirements. Germany imported 28.7% of its defense equipment from the US during 2011-2015, followed by 16.1% from Switzerland, 14% from the Netherlands, and 13.7% from France; imports from the US declined by 93.5% in 2015.
The country aims to develop strategic associations with other European countries:
In a bid to reduce its dependence on imports, the government is set to develop its domestic defense industry through collaborations with the UK and France.
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