This report is the extensive market and
company research covering the Italian defense industry, and 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 Future of the Italian Defense
Industry - Market Attractiveness, Competitive Landscape, and Forecasts to 2019
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 Italian defense industry.
What
is the current market landscape and what is changing?
Italy which is one of the largest
defense spenders in Europe and tenth largest spender in the world is projected
to spend US$147.2 billion on its armed forces during the forecast period. In 2014,
the Italian government allocated US$27.67 billion for the total defense budget
which recorded a CAGR of 5.18% during 2010 to 2014. Defense expenditure is
inclusive of the expenditure on the defense function, homeland security, and
other expenses. Italian defense expenditure is primarily driven by increasing
terrorist threats, participation in peacekeeping initiatives, replacing the
ageing military equipment, and the modernization of defense forces with
advanced technology equipment. The defense function stood at US$19.13 billion
in 2014 and is expected to increase at a CAGR of 3.09% during the forecast
period, to reach US$22.32 billion in 2019. Capital expenditure will also see a
marginal increase which is anticipated to grow at 5.16% due to the country's
heavy procurement pattern during the forecast period. The Italian defense
industry is expected to focus on modernization of the armed forces by
implementing various procurement programs that include F-35 Joint Strike
Fighter project. Typhoon multirole combat aircraft, FREMM frigates, NH 90
helicopters, and Medium Extended Air Defense System (MEADS) program
What
are the key drivers behind recent market changes?
Modernization of defense systems,
participation in peacekeeping initiatives, and maintaining NATO, EU and UN
stipulations expected to drive the Italian defense expenditure
What
makes this report unique and essential to read?
The Future of the Italian Defense
Industry - Market Attractiveness, Competitive Landscape, and Forecasts to 2019
provides detailed analysis of the current industry size and growth expectations
from 2015 to 2019, 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 2015 to 2019, including
highlights of key growth stimulators, and 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 Italian
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 Italy. 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
As per the SDI's business outlook
survey, 84% of the European respondents have quoted that the biggest concern
for the defense industry in the coming 5 years are the impending global defense
budget cuts. The economic crisis in Italy and across Europe has led to
reductions in the defense budgets of many countries, including France, Greece
and Poland, which are some of the top importing countries of Italian defense
products. The cuts will decrease the procurement expenditure of these countries
and have a negative impact on the order book of the Italian defense industry.
The key procurement cutbacks made by Italy's own MOD include:
As a member of the EU, the Italian
government has a policy to give priority to European-manufactured defense
goods, which makes it more difficult for non-European defense companies to
supply to the Italian defense market. The high capability of, and the
prohibition of foreign direct investment in, the defense industry further
reduces the scope for non-European defense companies. Moreover, the
participation of the domestic defense industry in international development
programs helps the domestic defense industry to acquire advanced technologies,
which further narrows the opportunities for foreign firms keen to enter the
market through technology transfers.
Key
Highlights
The country's defense budget declined
during 2010 to 2014 due to various austerity measures implemented by the
government, however, the country's procurement plans still remain ambitious and
the government is keen to continue modernization albeit at a slower pace. For
example: In 2012, Italy's initial procurement of 131 F-35 fighter jets was
reduced to 90 aircraft. The country is anticipated to spend US$16 billion over
the procurement of the aircrafts which include F-35 fighter and Eurofighter
Typhoon over 45 years starting in 2015. Further; the Italian Navy has also
obtained funding for building 10 naval vessels consisting of eight multipurpose
ships, one amphibious ship and a logistics vessel over the next decade. The
multipurpose ships are procured for combat purposes and to support humanitarian
relief operations. Additionally to replace its ageing Fincantieri-built Lupo
and Maestrale-class ships, Italy has undertaken the FREMM multi-mission ship
program in collaboration with France to build 10 frigates to be delivered by
2022. The vessels will be equipped with the SAAM Aster 15 missile system, Teseo
Mk2 sea-skimming anti-ship missiles to support anti-submarine warfare and
anti-air warfare missions.
A rise in the number of internal
security threats, terrorist attacks, the emergence of home-grown insurgency
networks, a number of anarchist groups active in the country are factors
driving homeland security expenditure in the country. Terrorist threats:
Terrorism is a growing problem in the Italy and the government is increasing
its efforts to dismantle terrorist-related groups within its borders, and
maintain cooperation with international partners in this aspect. In January
2014, the Italian Olympics committee has received a terrorist threat concerning
the Games due to start next month in Sochi, Russia. Further in 2013, the
Italian police department arrested a group of Tunisian men who were creating an
Islamic militant cell in the Southern Italian town. In 2009, the Italian
government investigated 216 terror threats against the country, including the
bombing of a northern police barrack in October. Italy perceives Islamist
organizations, such as Al-Qaeda, as the biggest threat to its internal
security. Italy is working closing with the US on countering terrorist
financing and coordinating with other foreign participants as an active member
of the Financial Action Task Force and the Egmont Group. Additionally Italy is
a founding member of the Global Counterterrorism Forum (GCF), which is a
multilateral platform focusing on addressing the challenges of
counterterrorism.
Italian defense exports have increased
significantly over 2010 to 2014 due to the various joint development programs
such as the Joint Strike Fighter, Horizon-class Frigates programs, Eurofighter
typhoon and the FREMM program etc. In addition, the Italian defense industry
has collaborated with several other equipment manufacturers thereby boosting
its export after the recession. Italy was the seventh largest exporter of arms
over 2010 to 2014. However, in the forecast period, defense exports are
expected to decline further due to the defense budget cuts of most European
countries, such as France and Greece, which are the major defense trading
partners of Italy. With the expansion of growing BRIC markets like India and
Brazil the demand for defense goods is expected to be strong and Italy is
expected to experience overall exports growth during the forecast period.
Spanning over 137 pages, 45 tables and 81 figures “Future of the
Italian Defense Industry - Market Attractiveness, Competitive Landscape and
Forecasts to 2019” report covering The Market Attractiveness and
Emerging Opportunities, Defense Procurement Market Dynamics, Industry Dynamics,
Market Entry Strategy, Competitive Landscape and Strategic Insights, Business
Environment and Country Risk, Appendix. The report covered 1 company – KADDB.
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