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Future of the Spain Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022

Future of the Spain Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022

Summary

Spanish defense industry, which values US$8.1 Billion in 2017, is anticipated to grow at a CAGR of 5.16% over the forecast period, to reach US$10.2 Billion by 2022. The country is currently facing a physical debt due to economic slowdown, which has resulted in a cut in military procurements over the historic period 2013-2017. However, over the forecast period, Spain’s defense expenditure will be stimulated by its involvement in existing military procurement programs, security threats from terrorist organizations, and territorial disputes with Morocco. The country’s defense budget is expected to be capped at an average of 0.7% of GDP over the forecast period.

Government expenditure on the Spanish homeland security market has been increasing because of growing troubles posed by drug trafficking, illegal immigration, and terrorist activities. Spain’s geographical location, bordering the Mediterranean Sea, makes it favorable for the transit of drugs and border crossings. Furthermore, the recent turmoil in the North African region has led to increased illegal immigration in Spain, thereby increasing the urgency of acquiring enhanced border security and control. The forecast period is expected to witness enhanced opportunities in security systems and its related platforms. The Spanish homeland security budget is valued at US$8.5 Billion in 2017 and is anticipated to increase to US$11.2 Billion by 2022, reflecting a CAGR of 3.89% over the forecast period 2018-2022.

During 2011-2015, Spanish defense exports ranked seventh largest in the world, accounting for 3.5% of world deliveries. Over 2012-2016, Spain has enhanced its naval and aerospace sectors significantly and, as a result, aircraft and naval vessels account for the majority of defense exports, occupying 69.7% and 26.7% respectively. Australia was the largest recipient, occupying 26.7% of the Spanish defense exports, followed by Saudi Arabia and Turkey.

Spain witnessed a sharp decline in imports between 2012 and 2016 due to the financial crisis and postponed its procurement plans. Germany is the largest exporter to Spain, contributing 37.9% in overall imports, and this is expected to continue over the forecast period. Germany is followed by the US and France. The country mostly imported equipment in areas where it lacked competency or technological capability, such as missiles, armored vehicles, fighter aircraft, and engines.

The report “Future of the Spain Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022” offers detailed analysis of Spain 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, this report provides an in-depth analysis of the following -
- Spain defense industry market size and drivers: Detailed analysis of Spain defense industry during 2018-2022, 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. It also details the key challenges faced by defense market participants within the country.
- Porter’s Five Force analysis of Spain 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 Spain 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: Thales, Iveco, Navantia, General Dynamics European Land Systems (GDELS), Aernnova Aerospace, S.A., Aries Ingenieria Y Sistemas, S.A., Indra Sistemas S.A., Sociedad Anonima De Electrónica Submarina, S.A., Tecnobit, Uro Vehiculos Especiales S.A., and Amper.

Scope

- In 2017, the Spanish government allocated US$8.1 billion for the total defense budget, which recorded a CAGR of 0.79% between 2013 and 2017. The marginal growth in defense expenditure is primarily due to the aftershocks of the European debt crisis, which has greatly weakened the foundations of the Spanish economy and forced the country to rationalize and re-prioritize its defense spending. The country is expected to witness higher levels of budget allocations over the forecast period, during which the expenditure is anticipated to increase at a CAGR of 5.16%.
- During 2013-2017, revenue expenditure accounted for an average of 84.8% of the total Spanish defense expenditure. The remaining 15.2% was spent on procuring equipment and services. The implementation of budget cuts and reform measures, such as the reduction of troop sizes and no new procurement programs by the MoD, are expected to curtail overall expenditure. Over the forecast period, the country’s defense capital allocations are anticipated to increase marginally and average 16.1% of its defense budget, while revenue expenditure accounts for the remaining 83.9% of the budget.
- The MoD is expected to invest in fighters and Multi-role aircraft, Military-IT networking and transport and utility aircraft.

Reasons to buy

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


1. Introduction
1.1. What is this Report About?
1.2. Definitions
1.3. Summary Methodology
1.4. About Strategic Defence Intelligence
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
3.1.4.1. Ongoing procurement programs
3.1.4.2. Future 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. Spanish defense budget is expected to increase at a CAGR of 5.16% during 2018-2022
3.2.2. Territorial dispute with Morocco, security threats posed by terrorist organizations, and large equipment procurement programs will drive defense expenditure during the forecast period
3.3. Analysis of Defense Budget Allocation
3.3.1. Revenue expenditure accounts for the largest percentage share
3.3.2. Capital expenditure expected to increase at a CAGR of 5.07% over 2018-2022
3.3.3. Defense expenditure as a percentage of GDP is expected to reach 0.70% in 2022
3.3.4. Per capita defense expenditure set to increase over the forecast period
3.4. Homeland Security Market Size and Forecast
3.4.1. Homeland security expenditure is expected to register a CAGR of 3.89% over the forecast period
3.4.2. Border security and drug trafficking will drive homeland security expenditure in Spain
3.4.3. Spain is at “some risk” of terrorism
3.4.4. Spain faces some level of threat from foreign terrorist organizations
3.4.5. Spain has a terrorism index score of 1.2
3.5. Benchmarking with Key Global Markets
3.5.1. Spanish defense expenditure expected to increase over the forecast period
3.5.2. The country’s defense budget is moderate compared to other leading spenders
3.5.3. Spanish defense expenditure as a percentage of GDP is expected to decrease over the forecast period
3.6. Market Opportunities: Key Trends and Drivers
3.6.1. Military-IT Networking
3.6.2. Fighters and Multi-Role Aircraft
3.6.3. Transport and Utility Aircraft
4. Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. Spanish defense imports are expected to grow moderately during the forecast period
4.1.2. Germany emerged as a significant arms supplier to Spain
4.1.3. Missiles and armored vehicles dominate military hardware imports
4.2. Export Market Dynamics
4.2.1. Spain ranked seventh among the countries with the highest volume of defense exports
4.2.2. Australia accounted for the largest percentage share of Spanish defense exports
4.2.3. Aircraft and ships 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: medium
5.1.3. Barrier to entry: medium
5.1.4. Intensity of rivalry: high
5.1.5. Threat of substitution: high
6. Market Entry Strategy
6.1. Market Regulation
6.1.1. Offset policy mandates suppliers invest 100% of the contract value into the Spanish economy
6.1.2. FDI in defense subject to approval
6.1.3. Unified Procurement Policy
6.2. Market Entry Route
6.2.1. Budgeting Process
6.2.2. Procurement Policy and Process
6.2.3. Foreign OEMs venture into the market by partnering with domestic defense firms
6.2.4. Joint R&D provides an attractive entry route to foreign OEMs
6.2.5. Collaborations provide market entry opportunities
6.3. Key Challenges
6.3.1. Defense budget cuts discourage investors from entering the industry
6.3.2. Project delays deter defense industry growth
7. Competitive Landscape and Strategic Insights
7.1. Competitive Landscape Overview
7.2. Key Foreign Companies
7.2.1. Thales: Overview
7.2.2. Thales: Defense Products
7.2.3. Thales: Recent Announcements and Strategic Initiatives
7.2.4. Thales: Alliances
7.2.5. Thales: Recent Contract Wins
7.2.6. Thales: Financial Analysis
7.2.7. Iveco: Overview
7.2.8. Iveco: Defense Products
7.2.9. Iveco: Recent Announcements and Strategic Initiatives
7.2.10. Iveco: Alliances
7.2.11. Iveco: Recent Contract Wins
7.3. Key Public Sector Companies
7.3.1. Navantia: Overview
7.3.2. Navantia: Defense Products
7.3.3. Navantia: Recent Announcements and Strategic Initiatives
7.3.4. Navantia: Alliances
7.3.5. Navantia: Recent Contract Wins
7.4. Key Private Sector Companies
7.4.1. General Dynamics European Land Systems (GDELS): Overview
7.4.2. General Dynamics European Land Systems (GDELS): Defense Products
7.4.3. General Dynamics European Land Systems (GDELS): Recent Announcements and Strategic Initiatives
7.4.4. General Dynamics European Land Systems (GDELS): Alliances
7.4.5. General Dynamics European Land Systems (GDELS): Recent Contract Wins
7.4.6. Aernnova Aerospace S.A.: Overview
7.4.7. Aernnova Aerospace S.A.: Defense Products
7.4.8. Aernnova Aerospace S.A.: Recent Announcements and Strategic Initiatives
7.4.9. Aernnova Aerospace S.A: Alliances
7.4.10. Aernnova Aerospace S.A.: Recent Contract Wins
7.4.11. Aries Ingenieria Y Sistemas, S.A.: Overview
7.4.12. Aries Ingenieria Y Sistemas, S.A.: Defense Products
7.4.13. Aries Ingenieria Y Sistemas, S.A.: Recent Announcements and Strategic Initiatives
7.4.14. Aries Ingenieria Y Sistemas, S.A: Alliances
7.4.15. Indra Sistemas S.A.: Overview
7.4.16. Indra Sistemas SA: Defense Products
7.4.17. Indra Sistemas S.A.: Recent Announcements and Strategic Initiatives
7.4.18. Indra Sistemas S.A.: Alliances
7.4.19. Indra Sistemas S.A.: Recent Contract Wins
7.4.20. Indra Sistemas S.A.: Financial Analysis
7.4.21. Sociedad Anonima De Electrónica Submarina, S.A.: Overview
7.4.22. Sociedad AnonimaDe Electrónica Submarina, S.A.: Defense Products
7.4.23. Sociedad Anonima De Electrónica Submarina, S.A.: Recent Announcements and Strategic Initiatives
7.4.24. SociedadAnonima De Electrónica Submarina, S.A.: Alliances
7.4.25. Sociedad Anonima De Electrónica Submarina, S.A.: Recent Contract Wins
7.4.26. Tecnobit: Overview
7.4.27. Tecnobit: Defense Products
7.4.28. Tecnobit: Recent Announcements and Strategic Initiatives
7.4.29. Tecnobit: Alliances
7.4.30. Tecnobit: Recent Contract Wins
7.4.31. Uro Vehiculos Especiales S.A.: Overview
7.4.32. Uro Vehiculos Especiales S.A.: Defense Products
7.4.33. Uro Vehiculos Especiales S.A.: Recent Announcements and Strategic Initiatives
7.4.34. Uro Vehiculos Especiales S.A.: Recent Contract Wins
7.4.35. Amper: Overview
7.4.36. Amper: Defense Products
7.4.37. Amper: Recent Announcements and Strategic Initiatives
7.4.38. Amper: Alliances
7.4.39. Amper: Recent Contract Wins
8. Business Environment and Country Risk
8.1. Economic Performance
8.1.1. GDP Per Capita at Constant Prices
8.1.2. GDP at Current Prices (US$ Billion)
8.1.3. Exports of Goods and Services (current US$ Billion)
8.1.4. Imports of Goods and Services (current US$ Billion)
8.1.5. Gross National Disposable Income (US$ Billion)
8.1.6. LCU per US$ (period average)
8.1.7. Market Capitalization of Listed Companies (US$ Billion)
8.1.8. Market Capitalization of Listed Companies (% of GDP)
8.1.9. Government Cash Surplus/Deficit as a Percentage of GDP (LCU)
8.1.10. Goods Exports as a Percentage of GDP
8.1.11. Goods Imports as a Percentage of GDP
8.1.12. Services Imports as a Percentage of GDP
8.1.13. Service Exports as a Percentage of GDP
8.1.14. Foreign Direct Investment, net (BoP, current US$ Billion)
8.1.15. Net Foreign Direct Investment as Percentage of GDP
8.1.16. Mining, Manufacturing, Utilities Output (LCU Billion)
9. Appendix
9.1. About SDI
9.2. Disclaimer
List of Tables
Table 1: The Spanish Army Strength
Table 2: Spanish Navy Strength
Table 3: Spanish Air Force Strength
Table 4: Spain - Ongoing Procurement Programs
Table 5: Spain - Future Procurement Programs
Table 6: Spanish Defense Expenditure (EUR Billion and US$ Billion), 2013-2022
Table 7: Spanish Defense Budget Split Between Capital and Revenue Expenditure (%), 2013-2022
Table 8: Spanish - Defense Capital Expenditure (EUR Billion and US$ Billion), 2013-2022
Table 9: Spanish - GDP Growth vs Defense Expenditure as a Percentage of GDP, 2013-2022
Table 10: Spanish Per Capita Defense Expenditure (US$), 2013-2022
Table 11: Spain’s - Homeland Security Expenditure (EUR Billion and US$ Billion), 2013-2022
Table 12: Terrorism Index, 2017
Table 13: Benchmarking with Key Markets - 2013-2017 vs. 2018-2022
Table 14: Spanish Defense Offset Regulations
Table 15: Spanish Budget Formation Timetable
Table 16: Market Entry Strategies by Key Foreign Companies
Table 17: Competitive Landscape of the Spanish Defense Industry
Table 18: Thales - Product Focus
Table 19: Thales - Alliances
Table 20: Thales - Recent Contracts
Table 21: Iveco - Key Products and Services
Table 22: Iveco - Alliances
Table 23: Iveco - Recent Contract Wins
Table 24: Navantia - Key Products
Table 25: Navantia - Alliances
Table 26: Navantia - Recent Contract Wins
Table 27: General Dynamics European Land Systems (GDELS) - Key Products
Table 28: General Dynamics European Land Systems (GDELS) - Alliances
Table 29: General Dynamics European Land Systems (GDELS) - Recent Contract Wins
Table 30: Aernnova Aerospace S.A. - Key Products
Table 31: Aernnova Aerospace S.A - Alliances
Table 32: Aernnova Aerospace S.A. - Recent Contract Wins
Table 33: Aries Ingenieria Y Sistemas, S.A - Key Products and Services
Table 34: Aries Ingenieria Y Sistemas - Alliances
Table 35: Indra Sistemas SA - Key Products and Services
Table 36: Indra Sistemas S.A. - Alliances
Table 37: Indra Sistemas S.A. - Recent Contract Wins
Table 38: Sociedad Anonima De Electrónica Submarina, S.A. - Key Products and Services
Table 39: Sociedad Anonima De Electrónica Submarina, S.A. - Alliances
Table 40: Sociedad Anonima De Electrónica Submarina, S.A. - Recent Contract Wins
Table 41: Tecnobit - Key Products and Services
Table 42: Tecnobit - Alliances
Table 43: Tecnobit - Recent Contract Wins
Table 44: Uro Vehiculos Especiales S.A. - Key Products
Table 45: Uro Vehiculos Especiales S.A. - Recent Contract Wins
Table 46: Amper - Key Products and Services
Table 47: Amper - Alliances
Table 48: Amper - Recent Contract Wins 110"
List of Figures
Figure 1: Spanish Defense Expenditure (EUR Billion), 2013-2022
Figure 2: Spanish Defense Expenditure (US$ Billion), 2013-2022
Figure 3: Spanish Defense Budget Split Between Capital and Revenue Expenditure (%), 2013-2022
Figure 4: Spanish - Defense Capital Expenditure (EUR Billion), 2013-2022
Figure 5: Spanish - Defense Capital Expenditure (US$ Billion), 2013-2022
Figure 6: Spanish GDP Growth vs. Defense Expenditure as Percentage of GDP, 2013-2022
Figure 7: Spanish Per Capita Defense Expenditure (US$), 2013-2022
Figure 8: Spanish Homeland Security Budget (EUR Billion), 2013-2022
Figure 9: Spanish Homeland Security Budget (US$ Billion), 2013-2022
Figure 10: SDI Terrorism Heat Map, 2017
Figure 11: Terrorism Index, 2017
Figure 12: Benchmarking with Key Markets - 2013-2017 vs. 2018-2022
Figure 13: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2017 & 2022
Figure 14: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2017
Figure 15: Military-IT Networking (US$ Million), 2017-2027
Figure 16: Fighter and Multi-Role Aircraft (US$ Million), 2017-2027
Figure 17: Transport & Utility Aircraft (US$ Million), 2017-2027
Figure 18: Spanish Defense Import Trend (US$ Million), 2012-2016 (TIV values)
Figure 19: Spanish Defense Imports by Country (%), 2012-2016
Figure 20: Spanish Defense Imports by Category (%), 2012-2016
Figure 21: Spanish Defense Exports (US$ Million), 2012-2016 (TIV values)
Figure 22: Spanish Defense Exports by Country (%), 2012-2016
Figure 23: Spanish Defense Exports by Category (%), 2012-2016
Figure 24: Industry Dynamics - Porter’s Five Forces Analysis
Figure 25: Thales - Revenue Trend Analysis (EUR Billion), 2012-2016
Figure 26: Thales - Operating Profit Trend Analysis (EUR Million), 2012-2016
Figure 27: Thales - Net Profit Trend Analysis (EUR Million), 2012-2016
Figure 28: Indra Sistemas S.A. - Revenue Trend Analysis (EUR Billion), 2012-2016
Figure 29: Indra Sistemas S.A. - Operating Profit Trend Analysis (EUR Million), 2012-2016
Figure 30: Indra Sistemas S.A. - Net Profit Trend Analysis (EUR Million), 2012-2016
Figure 31: Spanish GDP Per Capita at Constant Prices (US$), 2015-2025
Figure 32: Spain GDP at Current Prices (US$ Billion), 2015-2025
Figure 33: Spanish Exports of Goods and Services (US$ Billion), 2005-2014
Figure 34: Spanish Imports of Goods and Services (LCU Billion), 2005-2014
Figure 35: Spanish Gross National Disposable Income (US$ Billion), 2005-2013
Figure 36: Spain LCU per US$, 2015-2024
Figure 37: Spanish Market Capitalization of Listed Companies (US$ Billion), 2005-2012
Figure 38: Spanish Market Capitalization of Listed Companies (% of GDP), 2002-2011
Figure 39: Spanish Government Cash Surplus/Deficit as Percentage of GDP (LCU), 2005-2012
Figure 40: Spain- Goods Exports as a Percentage of GDP (%), 2005-2014
Figure 41: Spain- Goods Imports as a Percentage of GDP (%), 2002-2011
Figure 42: Spanish Services Imports as a Percentage of GDP (%), 2005-2014
Figure 43: Spanish Service Exports as a Percentage of GDP (%), 2005-2014
Figure 44: Spain - Foreign Direct Investment, net (BoP, current US$ Billion), 2005-2014
Figure 45: Spanish Net Foreign Direct Investment (% GDP) 2005-2014
Figure 46: Spanish Mining, Manufacturing, Utilities Output (LCU Billion), 2005-2014

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