
The French Defense Industry - Market Opportunities and Entry Strategies, Analyses and Forecasts to 2016
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Synopsis
• Top level overview of the French defense industry
• A breakdown of the French defense industry by spend pattern valued from 2005 through 2010 and forecasted from 2011 through 2016
• A breakdown of the markets by segments valued from 2005 through 2010 and forecasted from 2011 through 2016
• Details of top companies active across the French defense industry
• Emerging trends and opportunities in the French defense industry in the last 12 months
Summary
This report offers insights into market opportunities and entry strategies adopted by foreign OEMs to gain a market share in the French defense industry. In particular, it offers in-depth analysis of the following:
• Market opportunity and attractiveness: Detailed analysis of the current market size and growth expectations during 2011–2016, including highlights of the key drivers, to aid understanding of the growth dynamics. It also benchmarks the sector against key global markets and provides detailed understanding of emerging opportunities in specific areas.
• Procurement dynamics: Trend analysis of imports and exports, along with their implications and impact on the French defense industry.
• Industry structure: Five forces analysis to identify various power centers in the industry and how these are likely to develop in the future.
• Market entry strategy: Analysis of possible ways to enter the market, along with knowledge of how existing companies have entered the market, including key contracts, alliances, and strategic initiatives.
• Competitive landscape and strategic insights: Analysis of the competitive landscape of defense manufacturers in France. It provides an overview of the key defense companies (both domestic and foreign) along with insights such as key alliances, strategic initiatives and a brief financial analysis.
• Business environment and country risk: A range of drivers at country level, assessing business environment and country risk. It covers historical and forecast values for a range of indicators evaluating business confidence, economic performance, infrastructure quality and availability, labor force, demographics, and political and social risk.
Scope
• Analysis of defense industry market size from 2005 through 2010 and forecasts till 2016
• Analysis of defense budget allocation
• Benchmarking with key global markets
• Market opportunities
• Defense procurement dynamics
• Industry dynamics
• Market entry strategy
• Competitive landscape and strategic insights
• Business environment and country risk
Reasons to Buy
• Gain insight into the French defense industry with current, historic and forecast market values
• Gain insight into market opportunity and attractiveness
• Gain insight into ndustry procurement dynamics
• Gain insight into industry structure
• Gain insight into regulations governing the French defense industry and the potential market entry strategies with an expert analysis of the competitive structure
• Identify top companies of the French defense industry along with profiles of all those companies
Key Highlights
During the review period, French defense expenditure increased at a CAGR of XX.XX%, and, in 2010, valued US$XX.XX billion. The military modernization plans outlined in the French white paper on defense and national security, coupled with perceived terrorist threats and France's status as the United Nations Security Council's second-largest contributor to UN peacekeeping missions, stimulated defense expenditure during the review period. Such factors are expected to continue to fuel defense expenditure during the forecast period. As a result, and despite expected budget cuts during 2010–2013 to reduce the government's fiscal deficit, the country's defense budget is expected to grow at a CAGR of XX.XX% during the forecast period. With this growth expected to be accompanied by a higher growth in the general French economy, French defense expenditure as a percentage of GDP is expected to fall to XX.XX% by 2016, compared to XX.XX% in 2010.
The capital expenditure allocation of the defense budget, which stood at an average of XX.XX% during the review period, increased to XX.XX% in 2010 as a result of a military modernization program. Capital expenditure is expected to account for XX.XX% of the total defense budget in 2011, before stabilizing at an average of XX.XX% during 2012–2016. Common services such as health care expenses and defense infrastructure facilities accounted for the highest budget allocation during the review period, with an average of XX.XX% when other expenses such as research and development and pensions are excluded. During the forecast period, the French Army is expected to receive an average defense budget allocation of XX.XX%, followed by the Air Force with an average of XX.XX% and the Navy with an average of XX.XX%.
Key opportunities for the country's defense industry are expected in areas such as armored vehicles, amphibious ships, and submarines with nuclear missile transportation capabilities. The French aerial defense capabilities are expected to be improved through the procurement of a new fleet of fighter aircraft, UAVs and the upgrade of its existing aircraft. The country is also expected to invest in advanced technology for command control and communication systems.
Keywords
France defense budget, offset, regulation, capital expenditure, army, navy, air force, homeland, drivers, market opportunities, procurement, entry route, key challenge, announcements, alliances, contract awards, financial analysis, business environment
Companies Mentioned
Dassault Aviation, Thales, Constructions Mécaniques de Normandie (CMN), EuroTorp, Cassidian, Safran Group, Snecma, Nexter Systems, MBDA, Eurocopter, DCNS, Renault Truck Defense
Table of Contents
1 Introduction
1.1 What is this Report About?
1.2 Definitions
1.3 Methodology
1.3.1 Secondary Research
1.3.2 Primary Research
1.3.3 Conventions
1.4 ICD Research Terrorism Index
1.5 About ICD Research
1.6 About Strategic Defence Intelligence (www.strategicdefenceintelligence.com)
2 Executive Summary
3 Market Attractiveness and Emerging Opportunities
3.1 Defense market Size Historical and Forecast
3.1.1 Colombian defense expenditure expected to reach US$20.88 billion by 2016
3.1.2 Threat from Venezuela, high crime levels, military modernization, threats from rebel groups and drug trafficking set to increase defense expenditure
3.1.3 Defense expenditure as a percentage of GDP expected to rise to 5.2% by 2016
3.2 Analysis of Defense Budget Allocation
3.2.1 Majority of defense budget allocated for revenue expenditure
3.2.2 Police and other defense expenses account for majority of defense budget
3.2.3 Budget allocation for army higher than remaining military divisions
3.2.4 Navy receives limited defense budget allocation
3.2.5 Government plans substantial investment in air force to boost air power
3.2.6 Police force receives a quarter of the total defense budget
3.3 Homeland Security Market Size and Forecast
3.3.1 Homeland security market to grow steadily during 2011-2016
3.3.2 Internal security challenges expected to increase homeland security expenditure
3.3.3 ICD Research Intelligence Terrorism Index rates Colombia to be a "highly affected" region
3.3.4 Columbia scores 1.9 on the terrorism index
3.4 Benchmarking with Key Global Markets
3.4.1 Colombian defense expenditure forecast to grow faster than the majority of largest global defense budgets
3.4.2 Colombian defense expenditure is one of the highest in South America
3.4.3 Colombia spends more than 4% of its GDP on defense
3.4.4 Colombia is "highly affected" by acts of terrorism
3.5 Market Opportunities: Key Trends and Drivers
3.5.1 Increased demand for medium-lift utility helicopters expected in the next two years
3.5.2 Modernization of existing frigates
3.5.3 Lack of battle tanks to lead to new army procurement
3.5.4 UAV procurement will increase as a part of the military modernization program
3.5.5 US$3 billion proposal to enhance air defense systems will create new opportunities
4 Defense Procurement Market Dynamics
4.1 Import Market Dynamics
4.1.1 Limitations of the domestic defense industry will support arms imports
4.1.2 Defense imports have grown significantly over the last five years
4.1.3 Aircraft account for majority of defense imports
4.1.4 US and Israel continue to be major arms suppliers
4.2 Export Market Dynamics
4.2.1 Colombia is not a major defense exporting country
5 Industry Dynamics
5.1 Five Forces Anlysis
5.1.1 Bargaining power of supplier: low to medium
5.1.2 Bargaining power of Buyer: high to medium
5.1.3 Barrier to entry: low to high
5.1.4 Intensity of rivalry: low
5.1.5 Threat of Substitution: medium
6 Market Entry Strategy
6.1 Market Regulation
6.1.1 Offset guidelines are channeled to benefit industrial and social sectors
6.1.2 FDI in defense sector is closed
6.2 Market Entry Route
6.2.1 Direct selling is the preferred market entry route for foreign OEMs
6.3 Key Challenges
6.3.1 Corruption, bribery and influence of anti-state elements damages the credibility of military
6.3.2 Low capital expenditure discourages both foreign and domestic firms
7 Competitive landscape and Strategic Insights
7.1 Competitive landscape Overview
7.2 Key Public Sector Companies
7.2.1 Industria Militar: Overview
7.2.2 Industria Militar: Major Products and Services
7.2.3 Industria Militar: Recent Announcements and Strategic Initiatives
7.2.4 Industria Militar: Alliances
7.2.5 Industria Militar: Recent Contract Wins
7.2.6 Industria Militar: Financial Analysis
7.3 Key Private Sector Companies
7.3.1 Sudamin Aeronautica y Defensa S.A.: Overview
7.3.2 Sudamin Aeronautica y Defensa S.A.: Major Products and Services
7.3.3 Sudamin Aeronautica y Defensa S.A.: Recent Announcements and Strategic Initiatives
7.3.4 Sudamin Aeronautica y Defensa S.A.: Alliances
7.3.5 Sudamin Aeronautica y Defensa S.A.: Recent Contract Wins
7.3.6 Sudamin Aeronautica y Defensa S.A.: Financial Analysis
7.3.7 Cotecmar: Overview
7.3.8 Cotecmar: Major Products and Services
7.3.9 Cotecmar: Recent Announcements and Strategic Initiatives
7.3.10 Cotecmar: Alliances
7.3.11 Cotecmar: Recent Contract Wins
7.3.12 Cotecmar: Financial Analysis
8 Business Environment and Country Risk
8.1 Business Confidence
8.1.1 Market capitalization trend - The Colombian Stock Exchange (BVC), Colombia
8.1.2 FDI inflows by sector
8.1.3 Deployment of credit
8.2 Economic Performance
8.2.1 GDP at constant prices
8.2.2 GDP per capita at constant prices
8.2.3 GDP at current prices
8.2.4 GDP per capita at current prices
8.2.5 GDP split by key sectors
8.2.6 Agriculture net output at current prices (local currency)
8.2.7 Agriculture net output at current prices (US dollars)
8.2.8 Agriculture net output at current prices as percentage of GDP
8.2.9 Manufacturing net output at current prices (local currency)
8.2.10 Manufacturing net output at current prices (US dollars)
8.2.11 Manufacturing net output at current prices as percentage of GDP
8.2.12 Mining, manufacturing and utilities net output at current prices (local currency)
8.2.13 Mining, manufacturing and utilities at current prices (US$ Billion)
8.2.14 Mining, manufacturing and utilities at current prices as percentage of GDP
8.2.15 Construction net output at current prices (local currency)
8.2.16 Construction net output at current prices (US dollars)
8.2.17 Construction output at current prices as a percentage of GDP
8.2.18 Crude steel production
8.2.19 Crude oil consumption
8.2.20 Inflation rate
8.2.21 Fiscal deficit as a percentage of GDP
8.2.22 Trade balance as a percentage of GDP
8.2.23 Exports as a percentage of GDP
8.2.24 Imports as a percentage of GDP
8.2.25 Exports growth
8.2.26 Imports growth
8.2.27 External debt as percentage of GDP
8.2.28 Debt service ratio
8.2.29 Exchange rate US$–COP (annual average)
8.2.30 Exchange rate US$–COP (end of fiscal)
8.3 Infrastructure Quality and Availability
8.3.1 Total airports and ports
8.3.2 Railways and roads
8.3.3 Automotive components export trend
8.3.4 Automotive products import trend
8.3.5 Passenger car penetration
8.3.6 Total installed capacity for electricity generation
8.3.7 Installed capacity for conventional thermal electricity generation
8.3.8 Electricity Production
8.3.9 Installed capacity for hydroelectricity generation
8.3.10 Installed capacity for renewable electricity generation
8.3.11 Electric power consumption
8.3.12 Electricity exports
8.3.13 Healthcare expenditure
8.3.14 Healthcare expenditure as a percentage of GDP
8.3.15 Healthcare expenditure per capita
8.3.16 Research and development expenditure as a percentage of GDP
8.3.17 Total internet subscribers
8.3.18 Broadband internet subscribers
8.3.19 Personal computer penetration
8.3.20 Mobile phone penetration rate
8.4 Labor Force
8.4.1 Labor force
8.4.2 Unemployment rate
8.5 Demographics
8.5.1 Annual disposable income
8.5.2 Annual per capita disposable income
8.5.3 Annual consumer expenditure on food
8.5.4 Annual per capita consumer expenditure on food
8.5.5 Urban and rural population
8.5.6 Females as percentage of population
8.5.7 Males as percentage of population
8.5.8 Mean age of population
8.5.9 Median age of population
8.5.10 Population density
8.5.11 Age distribution of the total population
8.5.12 Age distribution of the male population
8.5.13 Age distribution of the female population
8.5.14 Number of households
8.6 Political and Social Risk
8.6.1 Political stability
8.6.2 Terrorism index
8.6.3 Transparency index
9 Appendix
9.1 Methodology
9.2 Contact us
9.3 About ICD Research
9.4 Disclaimer
List of Tables
Table 1: Colombian Defense Expenditure (2005–2010)
Table 2: Colombian Defense Expenditure (2011–2016)
Table 3: Colombian Defense Expenditure as a % of GDP (2005–2010)
Table 4: Colombian Defense Expenditure as a % of GDP (2011–2016)
Table 5: Colombian Defense budget Split between Capital and Revenue Expenditure (2005–2010)
Table 6: Colombian Defense budget Split between Capital and Revenue Expenditure (2011–2016)
Table 7: Colombian Defense Budget Allocation(%), (2005–2010)
Table 8: Colombian Defense Budget Allocation (%), (2011–2016)
Table 9: Colombian Army Defense Expenditure (US$ Billion), (2005–2010)
Table 10: Colombian Navy Defense Expenditure (US$ Billion), (2011–2016)
Table 11: Colombian Air Force Defense Expenditure (US$ Billion), (2005–2010)
Table 12: Colombian Air Force Defense Expenditure (US$ Billion), (2011–2016)
Table 13: Colombian Police Force Expenditure (2005–2010)
Table 14: Colombian Police Force Expenditure (2011–2016)
Table 15: Colombian Homeland Security Expenditure (2005–2010)
Table 16: Colombian Homeland Security Expenditure (2011–2016)
Table 17: Benchmarking with Key Markets - 2005–2010 vs 2011–2016
Table 18: Benchmarking with Large Defense Spenders in the World - 2010 and 2016
Table 19: ICD Research Terrorism Index
Table 20: Offset Regulations in Colombia
Table 21: Industria Militar – Major Products & Services
Table 22: Industria Militar – Alliances
Table 23: Industria Militar – Recent Contract Wins
Table 24: Sudamin Aeronautica y Defensa S.A. – Major Products & Services
Table 25: Sudamin Aeronautica y Defensa S.A. – Alliances
Table 26: Cotecmar – Major Products & Services
Table 27: Cotecmar – Alliances
List of Figures
Figure 1: Colombian Defense Expenditure (2005–2010)
Figure 2: Colombian Defense Expenditure (2011–2016)
Figure 3: Colombian Defense Expenditure as % of GDP (2011–2016)
Figure 4: Colombian Defense budget Split between Capital and Revenue Expenditure (2005–2010)
Figure 5: Colombian Defense budget Split between Capital and Revenue Expenditure (2011–2016)
Figure 6: Colombian Defense Budget Allocation (%), (2005–2010)
Figure 7: Colombian Defense Budget Allocation (%), (2011–2016)
Figure 8: Colombian Army Budget (US$ Billion), (2005–2010)
Figure 9: Colombian Army Defense Expenditure (US$ Billion), (2011–2016)
Figure 10: Colombian Navy Defense Expenditure (US$ Billion), (2005–2010)
Figure 11: Colombian Navy Defense Expenditure (US$ Billion), (2011–2016)
Figure 12: Colombian Air Force Defense Expenditure (US$ Billion), (2005–2010)
Figure 13: Colombian Air Force Defense Expenditure (US$ Billion), (2011–2016)
Figure 14: Colombian Police Force Expenditure (2005–2010)
Figure 15: Colombian Police Force Expenditure (2011–2016)
Figure 16: Colombian Homeland Security Expenditure (2005–2010)
Figure 17: Colombian Homeland Security Expenditure (2011–2016)
Figure 18: ICD Research Terrorism Heat Map
Figure 19: ICD Research Terrorism Heat Index, 2010
Figure 20: Benchmarking with Key Markets – (2005–2010) vs (2011–2016)
Figure 21: Benchmarking with Large Defense Spenders in the World - 2010 and 2016
Figure 22: Benchmarking with Large Defense Spenders as % of GDP - 2010 and 2016
Figure 23: Colombian Defense imports TIV value (US$ Million), (2005–2010)
Figure 24: Colombian Defense Imports by Category (%), (2005–2010) and 2010 (TIV values)*
Figure 25: Colombian Defense Imports by Region (%), 2005–2010 and 2010
Figure 26: Industry Dynamics – Porter's Five Forces Analysis
Figure 27: Industria Militar – Revenue Trend Analysis (2005–2010)
Figure 28: Industria Militar – Operating Profit Trend Analysis (2005–2010)
Figure 29: Industria Militar – Net Profit Trend Analysis (2005–2010)
Figure 30: The Colombian Stock Exchange (BVC) Market Capitalization (US$ Billion), (2003–2009)
Figure 31: Colombian FDI Inflows by Sector (US$ Billion), (2003–2009)
Figure 32: Colombian Deployment of Credit (US$ Billion), 2003–2009
Figure 33: Colombian GDP Value at Constant Prices (US$ Billion), (2003–2015)
Figure 34: Colombian GDP per Capita at Constant Prices (US$), (2003–2015)
Figure 35: Colombian GDP at Current Prices (US$ Billion), (2003–2015)
Figure 36: Colombian GDP per Capita at Current Prices (US$), (2003–2015)
Figure 37: Colombian GDP Split by Key Sectors, 2003 vs. 2009
Figure 38: Colombian Agriculture Net Output at Current Prices (COP Billion), (2003–2015)
Figure 39: Colombian Agriculture Net Output at Current Prices (US$ Billion), (2003–2015)
Figure 40: Colombian Agriculture Net Output at Current Prices as a Percentage of GDP (%), (2003–2015)
Figure 41: Colombian Manufacturing Net Output at Current Prices (COP Billion), (2003–2015)
Figure 42: Colombian Manufacturing Net Output at Current Prices (US$ Billion), (2003–2015)
Figure 43: Colombian Mining, Manufacturing and Utilities Output at Current Prices (US$ Billion), (2003–2015)
Figure 44: Colombian Mining, Manufacturing and Utilities Output at Current Prices as a Percentage of GDP (%), (2003–2015)
Figure 45: Colombian Construction Net Output at Current Prices (COP Billion), (2003–2015)
Figure 46: Colombian Construction Net Output at Current Prices (US$ Billion), (2003–2015)
Figure 47: Colombian Construction Output at Current Prices as a Percentage of GDP (%), (2003–2015)
Figure 48: Colombian Crude Steel Production (Thousand Metric Tons), (2003–2015)
Figure 49: Colombian Crude Oil Consumption (Million Tons), (2003–2015)
Figure 50: Colombian Inflation Rate (%), (2003–2015)
Figure 51: Colombian Fiscal Balance as a Percentage of GDP (%), (2003–2015)
Figure 52: Colombia Trade Balance as a Percentage of GDP (%), (2003–2009)
Figure 53: Colombia Exports as a Percentage of GDP (%), (2003–2015)
Figure 54: Colombian Imports as a Percentage of GDP (%), (2003–2015)
Figure 55: Colombian Exports Growth (%), (2003–2015)
Figure 56: Colombia Imports Growth (%), (2003–2015)
Figure 57: Colombia External Debt as a Percentage of GDP (%), (2003–2009)
Figure 58: Colombian Debt Service Ratio, (2003–2009)
Figure 59: Colombian Exchange Rate US$–COP (Annual Average), (2003–2009)
Figure 60: Colombian Airports and Ports, 2009
Figure 61: Colombian Railways and Roadways (km), 2009
Figure 62: Colombian Automotive Components Exports (US$ Million), (2003–2015)
Figure 63: Colombian Automotive Components Imports (US$ Million), (2003–2015)
Figure 64: Colombian Passenger Car Penetration (per thousand people), (2003–2015)
Figure 65: Colombian Total Installed Capacity for Electricity Generation (million kilowatts), (2003–2015)
Figure 66: Colombian Installed Capacity for Conventional Thermal Electricity Generation (million kilowatts), (2003–2015)
Figure 67: Colombian Electricity Production (billion kilowatt hours), (2003–2015)
Figure 68: Colombian Installed Capacity for Hydroelectricity Generation (million kilowatts), (2003–2015)
Figure 69: Colombian Installed Capacity for Renewable Electricity Generation (million kilowatts), (2003–2015)
Figure 70: Colombian Electricity Exports (billion kWh), (2003–2015)
Figure 71: Colombian Healthcare Expenditure (US$ billion), (2003–2015)
Figure 72: Colombian Healthcare Expenditure as a Percentage of GDP (%), (2003–2015)
Figure 73: Colombian per Capita Healthcare Expenditure (US$), (2003–2015)
Figure 74: Colombian R&D Expenditure as a percentage of GDP (%), (2003–2015)
Figure 75: Colombian Internet Subscribers (thousands), (2003–2015)
Figure 76: Colombian Broadband Internet Subscribers (thousands), (2003–2015)
Figure 77: Colombian Personal Computer Usage (per hundred people), (2003–2015)
Figure 78: Colombian Mobile Phone Penetration (%), (2003–2015)
Figure 79: Colombian Size of Labor Force (in 15–59 age group), (2003–2015)
Figure 80: Colombian Annual Disposable Income (US$ Billion), (2003–2015)
Figure 81: Colombian Annual per Capita Disposable Income (US$), (2003–2015)
Figure 82: Colombian Consumer Expenditure on Food (US$ Billion), (2003–2015)
Figure 83: Colombian Annual per Capita Consumer Expenditure on Food (US$), (2003–2015)
Figure 84: Colombian Urban and Rural Population (%), (2003–2015)
Figure 85: Colombian Females as a Percentage of Population (%), (2003–2015)
Figure 86: Colombian Males as a Percentage of Population (%), (2003–2015)
Figure 87: Colombian Mean Age of Population (Years), (2003–2015)
Figure 88: Colombian Median Age of Population (Years), (2003–2015)
Figure 89: Colombian Population Density (per Square Kilometer) (2003–2015)
Figure 90: Colombian Age Distribution of the Total Population (%), (2003–2015)
Figure 91: Colombian Age Distribution of the Male Population (%), (2003–2015)
Figure 92: Colombian Age Distribution of the Female Population, (2003–2015)
Figure 93: Colombian Number of Households (Million), (2003–2015)
Figure 94: Global Terrorism Heat Map, 2009
Figure 95: Colombian Transparency Index, (2003–2009)
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