The Future of the Russian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023
Russian defense modernization has traditionally been funded by booming oil and gas profits; however the crash in the global energy market resulted in erosion in the country’s revenues and has forced the country to adopt austerity measures to cut down on government expenditure.
Russian defense expenditure declined drastically from US$56.7 billion in 2016 to US$48.7 billion in 2017, however with the recovery in global energy prices, Russia’s financial position has slowly started to improve, and its value has started to recover against the US dollar. The country’s defense expenditure increased to US$51.9 billion (RUB 2.95 trillion) in 2018. The finalized defense expenditure of US$51.9 Billion (RUB2.95 trillion) for 2018 is 8.1% higher than the US$48 billion (RUB2.73 trillion) which was initially earmarked for defense spending in the draft budget.
In addition, capital expenditure is expected to increase at a CAGR of 9.17% during 2019-2023, compared to the CAGR of -15.62% recorded during the historic period.
During 2018-2027, the Russian government is expected to prioritize the development of long-range hypersonic and supersonic Precision Guided Munitions (PGM) and weapon systems, missile vessels and nuclear submarines for the navy.
The country is expected to focus on the modernization and procurement of C4ISR systems, transport aircraft, naval vessels, multirole aircraft, and conventional and nuclear submarines, among others. In November 2017, Russia unveiled its new modernized TU-160M2 Blackjack strategic bomber, which is scheduled to enter service by the year 2021.
The report ""The Future of the Russian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023"" offers detailed analysis of the Russian defense industry with market size forecasts covering the next five years.
In particular, the report provides an in-depth analysis of the following -
- The Russian defense industry market size and drivers: detailed analysis of the Russian defense industry during 2018-2023, 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
- Porter’s Five Force analysis of the Russian 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 over the next 10 years
- Competitive landscape and strategic insights: analysis of the competitive landscape of the Russian defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis
Companies mentioned in this report - United Aircraft Corporation (UAC), Sukhoi, Irkut Corporation, Rostec, Uralvagonzavod (UVZ), Splav, KBP Instrument Design Bureau, V.A.Degtyarev Plant, Kalashnikov Concern, Oboronprom Corporation, United Engine Corporation (UEC), Tactical Missiles Corporation,Almaz-Antey, Kurganmashzavod, and United Shipbuilding Corporation (USC)
- Russia’s defense expenditure in 2018 values US$51.9 billion, recording a CAGR of -5.79% during the historic period, and it is expected to cumulatively value US$308.5 billion over the forecast period. Russia has the world’s longest land border, which it shares with 16 other countries, along with maritime borders with Japan, via the sea of Okhotsk, and the US state of Alaska, across the Bering Strait. The country places the utmost importance on the protection of its borders and critical infrastructure, which covers a large geographical area that is rich in natural resources.
- During the historic period, the Russian Government allocated an average of 50.7% of its total defense budget to capital expenditure and the remaining 49.3% to revenue expenditure. Capital expenditure is expected to increase during the forecast period to an average of 58.2%, due to the adoption of State armaments program 2018-2027 in the year 2017.
- The MoD is expected to invest in land based ISR, Critical Infrastructure Protection (CIP), and airborne C4ISR capabilities.
Reasons to buy
- This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Russian 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 Russian defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts