The Austrian Defense Industry - Market Opportunities and Entry Strategies, Analyses and Forecasts to 2017
This report is the result of SDI's extensive market and company research covering the Austrian defense industry. It provides detailed analysis of both historic and forecast defense industry values including key growth stimulators, analysis of the leading companies in the industry, and key news.
Introduction and Landscape
Why was the report written?
The Austrian defense Industry Market Opportunities and Entry Strategies, Analyses and Forecasts to 2017, offers the reader an insight into the market opportunities and entry strategies adopted by foreign original equipment manufacturers (OEMs) to gain market share in the Austrian defense industry.
What is the current market landscape and what is changing?
Austria is projected to spend US$12.0 billion on its armed forces during the forecast period. Defense spending, which registered a CAGR of -4.39% during the review period, is anticipated to record a CAGR of 0.48% during the forecast period. Military spending is expected to be driven by the procurement of new defense systems and participation in international peacekeeping missions. The country's per-capita defense spending is also expected to decline during the forecast period. Austria's homeland security budget is expected to be driven by its efforts to counter criminal activities such as the illicit drug trade and human trafficking. Defense equipment suppliers and subcontractors can expect demand for interoperable defense equipment, and the homeland security market will experience a rise in demand for surveillance and biometric identification systems, and equipment capable of enhancing border security.
What are the key drivers behind recent market changes?
Austria's defense expenditure is expected to be driven by peacekeeping and disaster relief operations along with the need to acquire advanced defense equipment. Over the next five years the country is expected to invest US$4.1 billion on the acquisition of military hardware for its armed forces. The country has been involved in peacekeeping missions since 1960. While the country is expected to reduce its overall defense spending, it is expected to acquire interoperable defense systems such as simulator systems, unmanned weapon stations, and military transport systems.
What makes this report unique and essential to read?
The Austrian Defense Industry Market Opportunities and Entry Strategies, Analyses and Forecasts to 2017provides detailed analysis of the current industry size and growth expectations from 2013to 2017, including highlights of key growth stimulators. It also benchmarks the industry against key global markets and provides a detailed understanding of emerging opportunities in specific areas.
Key Features and Benefits
The report provides detailed analysis of the current industry size and growth expectations from 2013 to 2017, including highlights of key growth stimulators. It also benchmarks the industry against key global markets and provides a detailed understanding of emerging opportunities in specific areas.
The report includes trend analysis of imports and exports, together with their implications and impact on the Austrian defense industry.
The report covers five forces analysis to identify various power centers in the industry and how these are expected to develop in the future.
The report allows readers to identify possible ways to enter the market, together with detailed descriptions of how existing companies have entered the market, including key contracts, alliances, and strategic initiatives.
The report helps the reader to understand the competitive landscape of the defense industry in Austria. It provides an overview of key defense companies, both domestic and foreign, together with insights such as key alliances, strategic initiatives, and a brief financial analysis.
Key Market Issues
The Austrian economy began to recover from the 2008 recession with a growth rate of 6.3% in 2011. The pace of recovery is, however, expected to be slow. To counter the mounting deficit and increasing public debt, the government is making cut backs, including spending on defense. This is expected to adversely affect military procurement expenditure over the next five years, and the domestic industry, which is mostly dependent on government procurement, will be severely affected. Companies may find it difficult to maintain profitability and may have to postpone their capital expenditure programs.
The recession, combined with decreasing threat levels from external sources, has made the Austrian government refocus its defense procurement strategy. In December 2010, it announced a massive sell-off plan of its heavy equipment armory and, according to the country's Defense Ministry; this is a direct consequence of the peace efforts propagated by the European Union (EU) region bordering Austria. This led to the Austrian government's announcement of the sale or scrapping of over 500 tanks and armored vehicles, a reduction of over 50% in the country's heavy military equipment inventory. The army will also reduce some of its inventory of 20mm and 35mm anti-aircraft guns, Mistral anti-aircraft missiles, Panzerabwehrlenkwaffe 2000 anti-tank missiles, 81mm and 120mm mortars, and parts of its air-defense network.
Austria's domestic defense capabilities are limited to the production of armored vehicles, small arms, ammunition and subsystems, and components for equipment such as aircraft. In order to enhance the capabilities of its domestic defense industry the country is compelled to import defense equipment from foreign defense firms. European suppliers such as Germany and Italy dominate the Austrian defense market, as the country favors military hardware manufactured by EU (European Union) members. During the review period, aircraft emerged as the country's largest category of defense equipment imports.
Austrian defense expenditure, which stands at US$2.7 billion in 2012, declined at a CAGR of -4.39% during the review period. On a cumulative basis, the country is expected to spend an estimated US$12.0 billion on its armed forces during the forecast period. The country's overall defense spending, however, is anticipated to register a CAGR of 0.48% during the forecast period and value US$2.5 billion in 2017. The Austrian defense budget is likely to reduce due to the budget cuts associated with the ongoing financial crisis faced by the country. Despite the government's efforts to reduce the country's budget deficit, military spending is expected to be driven by factors such as participation in international peacekeeping missions and the acquisition of advanced defense systems.
Austria's homeland security expenditure, as represented by the Interior Ministry budget, is estimated to be US$3.05 billion in 2013, having grown at a CAGR of -0.88% during the review period. It is expected to witness a CAGR of 0.33% during the forecast period, to be US$3.098 billion in 2017. On a cumulative basis, the country's homeland security spending is forecast to be US$15.5 billion over the next five years. Despite financial constraints, spending will be driven by the policing of organized crime such as the illicit drug trade, illegal immigration, and human trafficking, and the country is expected to invest in border security equipment.
The country's domestic defense capabilities are limited and, as a consequence, it relies on foreign defense firms to fulfill its military needs. Austria's defense industry is capable of manufacturing equipment such as armored vehicles, small arms, ammunition, and mortar bombs. With its active participation in various peacekeeping missions, the country focuses on acquiring defense equipment which is interoperable with the armies of other countries. In order to enhance the capabilities of its armed forces, the country is expected to import defense equipment such as aircraft, along with subcomponents and unmanned weapon stations during the forecast period.