Malaysian defense expenditure increased at a CAGR of 6.37% during the review period and valued US$4.96 billion

Malaysian defense expenditure increased at a CAGR of 6.37% during the review period and valued US$4.96 billion in 2013. The focus of the Malaysian government will be on the modernization of its armed forces, participation in peacekeeping operations, and counter terrorism activities.The Malaysian government fulfills most of its defense needs by importing military equipment from the foreign countries such as Russia, Germany, France, and Spain. The overall exports of the country during the period 2008-2012 were negligible, resulting in poor inflow of foreign investment. During the forecast period, the defense exports of the country are expected to remain low as a result of less joint development and collaboration programs, which is expected to remain the key challenge for the Malaysian defense industry during the forecast period.
The Malaysian defense budget, which is estimated at US$4.9 billion for 2013, is lower than the majority of Malaysia's neighbors, with the Philippines being one of the few countries with a lower defense budget, and this relatively small defense budget frequently deters investors from venturing into the country. Moreover, the Malaysian government has made offsets mandatory for all defense procurements exceeding US$13 million, and in an attempt to encourage domestic defense development, the Malaysian government awards additional significance to direct offsets; however, due to the lack of sufficient investment and a shortage of skilled Malaysian labor, foreign OEMs are unable to transfer sophisticated technology to domestic defense companies. The combination of the factors outlined above reduces the attractiveness of the Malaysian defense industry for foreign OEMs.
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Weapons and Ammunition in United Kingdom

Industrial reports provide a 360 degree view of an industry. The Industrial market report offers a comprehensive guide to the size and shape of the Weapons and Ammunition market at a national level. It provides the latest retail sales data, allowing you to identify the sectors driving growth. It identifies the leading companies, the leading brands and offers strategic analysis of key factors influencing the market - be they new product developments, packaging innovations, economic/lifestyle influences, distribution or pricing issues. Forecasts illustrate how the market is set to change.
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Saudi Arabian Defense Industry is expected to grow at a CAGR of 7.92% to reach US$77.3 billion

Saudi Arabia is estimated to have the fourth largest defense budget in the world, behind the US, China, and Russia. Valued at US$52.9 billion in 2013, the country’s defense expenditure is at the seventh position among the top 10 military spenders and is expected to grow at a CAGR of 7.92% to reach US$77.3 billion by 2018. Saudi Arabia’s military expenditure as a percentage of GDP will from its current 7.3% to 9.1% by 2018 due to slowing economic growth over the forecast period. An underdeveloped domestic defense industry coupled with the country’s high spending power presents ample opportunities for foreign OEMs to enter the market through an alliance route.

What are the key drivers behind recent market changes?
A strained relationship with Iran, high spending power, and the need to develop a skilled military force to be key factors driving defense expenditure. The Saudi Arabian government’s hopes of strengthening its defense infrastructure in order to emerge as the most powerful nation in the Middle East have been supported by many years of high oil prices and strong economic growth. The rivalry between Saudi Arabia and Iran in the Middle East is a regional power struggle for influence, in which both sides have aimed at steering the course of events, shaping developments, and influencing decisions in the region according to their political preferences and interests. The fact that the Saudi’s average defense expenditure as a percentage of GDP during the review period measured a significant 7.9% implies it has the purchasing power to procure state of the art defense equipment. In fact the country registered a figure of 7.3% with regards to its defense expenditure as a percentage of GDP, which was the highest among the world’s largest military spenders for 2012.
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The German MoD announced its plans to cut its defense budget by 2016

The German MoD announced its plans to cut its defense budget by 2016 and is expected to reduce its expenditure on military aircraft and other arms contracts over the next five years. The budget cuts will result in reductions in the procurement of helicopters, heavy lift military transport aircraft, tanks, and jet fighters. The Bundeswehr is planning not to buy the last tranche of 37 Eurofighter aircraft and Germany is expected reduce its orders of Puma tanks by 120, 40 NH-90 naval helicopters, and also 40 Tiger multi-role attack helicopters. In addition, the MoD has announced plans to substantially reduce the size of its troop force by temporarily suspending its national conscription program, in order to make further cuts. The country expects to save US$1.31 billion during this period as a result of the reduction in armed forces and civilian support staff.
Over the forecast period the German MoD is expected to focus on the suspension of national conscription and restrict defense procurements to core military hardware only. Furthermore, Germany’s intention to align its defense capabilities with those of the EU, coupled with the decommissioning of its existing defense systems, including 15 Trans all cargo aircraft, 100 Tornado jet fighters, and a significant number of frigates from its navy, may also pose challenges to defense suppliers.

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China’s defense expenditure over the forecast period, which is estimated to grow at a CAGR of 11.9%.

The Chinese defense industry is controlled by the government, and restrictions on private and foreign companies dampen the competition in the industry. A lack of competition diminishes the need for innovation in defense equipment and related technology advancement. Barring a few industrial enterprises, the majority of organizations fail to compete with each other, which impedes the development of China’s modern indigenous defense industry as there is no incentive for companies to innovate. Furthermore, some of China’s industrial–defense enterprises form business relationships based on long-standing political ties with regions and provinces. As a result, the country fails to gain access to technological innovations and advancements in foreign countries.
A major obstacle to investment in the Chinese defense industry is the arms embargo imposed by the US and other European countries, following the 1989 Tiananmen Square massacre. During the review period, some European states have proposed the lift of the arms ban, but the US and Japan have opposed this proposal due to fears that it will enable China to enhance its military capabilities. As a result, China’s defense industry is unable to acquire sophisticated military hardware from the US or Western European countries, and this hampers the development of its military–industrial complex.

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The Indian defense equipment markets in the world, the country is expected to spend US$119.3 billion

The Future of the Indian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2018 offers the reader an insight into the market opportunities and entry strategies adopted by foreign original equipment manufacturers (OEMs) to gain a market share in the Indian defense industry. The Indian defense market offers numerous market opportunities to both domestic and foreign manufacturers. As one of the largest defense equipment markets in the world, the country is expected to spend US$119.3 billion on capital acquisition alone during the forecast period.

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Brazilian defence market in 2012 will reach $35.88bn

Over the past decade, Brazil has become one of the largest emerging economic powers in the world, leading to ambitious investment and modernisation plans being developed for the Brazilian armed forces. In order to counter threats to the country's borders and its large scale land and sea natural resources, alongside the need to increase security preparations for major international events, Brazil has continued to invest in upgrading its full range of military capabilities. In addition, a desire to grow a strong defence industry in order to boost the economy's export output and to demonstrate its geo-political power has fuelled such spending, despite concerns over the inherent restrictions of an emerging market and a recent slowdown in Brazil's overall economic output. has therefore determined that the value of the Brazilian defence market in 2012 will reach $35.88bn.

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