Future of the Czech Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2023

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Published: July 11, 2018 Report Code: GD-DF0509MR-ST

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The Future of the Czech Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2023, published by Strategic Defense Intelligence, provides readers with detailed analysis of both historic and forecast defense industry values, factors influencing demand, the challenges faced by industry participants, analysis of industry leading companies, and key news.

Synopsis

This report offers detailed analysis of the Czech 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, it provides an in-depth analysis of the following –
– The Czech defense industry market size and drivers: detailed analysis of the Czech defense industry during 2019-2023, 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 with respect to capital expenditure and revenue expenditure. It also details the key challenges faced by defense market participants within the country
– Import and Export Dynamics: analysis of prevalent trends in the country’s imports and exports over the last five years
– Market opportunities:list of the top ten defense investment opportunities over the next 5 years
– Competitive landscape and strategic insights: analysis of the competitive landscape of the Czech defense industry.

Scope

– The Czech Republic’s defense budget values US$2.8 billion in 2018, and registered a CAGR of 10.47% during the historic period.

– The growth in the Czech defense market is primarily driven by the need to modernize the country’s defense arsenal, the Russia military aggression in Ukraine; which brought the possibility of an armed conflict in Europe.

– The country’s participation in peacekeeping operations and counter terrorism has also fueled the growth in Czech Republic defense expenditure during the historic period.

– With this trend expected to continue over the forecast period, Czech Republic defense expenditure is anticipated to register a CAGR of 6.34%, to value US$3.7 billion in 2023.

– As a percentage of GDP, the country’s defense expenditure is expected to average 1.03% over the forecast period, compared to 0.98% recorded during the historic period.

Reasons to Buy

– This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Czech 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

– Profiles of the top domestic and foreign defense manufacturers . This will provide the user with a total competitive landscape of the sector

– A deep qualitative analysis of the Czech defense industry covering sections including demand drivers, Key Trends , and latest industry contracts

Aero Vodochody
Lom Praha s.p.
VOP CZ
s.p.
Omnipol
Aura s.r.o
Dicom
Spol. s.r.o
Českázbrojovkaa.s
Tesla
akciovaspolecnost
Tatra a.s
etovLeteckaVyroba S.r.o.

Table of Contents

Table of Contents

1. Introduction 7

1.1. What is this Report About? 7

1.2. Definitions 7

1.3. Summary Methodology 9

1.4. About Strategic Defense Intelligence 10

2. Executive Summary 11

3. Market Attractiveness and Emerging Opportunities 12

3.1. Current Market Scenario 13

3.1.1. Military Fleet Size 13

3.1.2. Procurement Programs 15

3.1.3. Key Drivers and Challenges 17

3.1.4. Growing Russian assertiveness 17

3.1.5. Limited defense budget limits the market entry of foreign companies 17

3.1.6. Lack of harmonization of procurement requirements and defense industrial policies 17

3.1.7. Corruption acts as an obstacle to market entry 18

3.2. Defense Market Size Historical and Forecast 19

3.2.1. Czech Republic defense expenditure is expected to grow at a CAGR of

6.34% over the forecast period 19

3.2.2. Growing Russian assertiveness, military modernization initiatives, and counter-terrorism are expected to fuel defense expenditure over the forecast period 21

3.2.3. Czech Republic defense expenditure as a percentage of GDP is anticipated to average

1.03% over the forecast period 22

3.3. Analysis of Defense Budget Allocation 24

3.3.1. Capital expenditure allocation expected to increase during the forecast period 24

3.3.2. Capital expenditure to increase at a CAGR of

6.33% over 2019-2023 26

3.3.3. Central Support Administration and Command expenditure (CASC) hold major share in Czech Republic’s defense budget 28

3.3.4. Central Support Administration and Command to receive the largest share of the Czech Republic defense budget 30

3.3.5. Per capita defense expenditure is expected to increase during the forecast period 34

3.4. Homeland Security Market Size and Forecast 36

3.4.1. Czech Republic homeland security market to increase at a CAGR of

5.02% over the forecast period 36

3.4.2. Homeland security expenditure to be driven by efforts to counter cyber-attacks, migration crisis, and espionage 38

3.4.3. Czech Republic faces some level of threat from foreign terrorist organizations 40

3.4.4. Czech Republic falls under “some risk” by terrorism category 41

3.4.5. Czech Republic has a terrorism index score of

1.9 43

3.5. Benchmarking with Key Global Markets 44

3.5.1. Czech Republic’s defense budget is poised to grow over the forecast period 44

3.5.2. Czech Republic’s defense spending is low compared to other European nations 46

3.5.3. Czech Republic allocates a significant percentage of GDP towards defense 47

3.6. Market Opportunities: Key Trends and Growth Stimulators 48

3.6.1. Top 10 Defense market sectors by value (US$ Million) – Projections over period 2018-2023 48

4. Defense Procurement Market Dynamics 49

4.1. Import Dynamics 50

4.1.1. Defense imports declined during 2013-2017 50

4.1.2. Czech Republic sourced the majority of its arms imports from Israel and Italy 51

4.1.3. Missiles and armored vehicles are the major military hardware imports 52

4.2. Export Market Dynamics 53

4.2.1. Czech Republic defense exports are expected to show steady growth over the forecast period 53

4.2.2. Iraq dominated the Czech Republic defense export market during the historic period 54

4.2.3. Aircraft and armored vehicles accounts for the highest portion of Czech defense exports 55

5. Industry Dynamics 56

5.1. Budgeting Process 56

5.2. Procurement Policy & Process 56

5.3. Market Regulation 57

5.3.1. Offset policy aids the development of the domestic defense industry 57

5.3.2. The Czech Republic allows 100% foreign direct investment in the defense sector 58

5.4. Market Entry Route 59

5.4.1. Bilateral business partnerships are the preferred entry routes 59

5.4.2. Foreign OEMs enter the market through the formation of consortiums and joint product development agreements 60

6. Competitive landscape and Strategic Insights 61

6.1. Competitive Landscape: Overview 61

7. Business Environment and Country Risk 63

7.1. Economic Performance 63

7.1.1. GDP Per Capita 63

7.1.2. GDP, Current Prices 64

7.1.3. Exports of goods and services, current prices 65

7.1.4. Imports of goods and services, current prices 66

7.1.5. Gross National disposable income (US$ Billion) 67

7.1.6. Local Currency Unit per US Dollar 68

7.1.7. Market Capitalization of Listed Companies 69

7.1.8. Market Capitalization of Listed Companies a percentage of GDP 70

7.1.9. Government Cash Surplus/Deficit as a percentage of GDP 71

7.1.10. Goods exports as a percentage of GDP 72

7.1.11. Goods imports as a percentage of GDP 73

7.1.12. Service Imports as a percentage of GDP 74

7.1.13. Service Exports as a percentage of GDP 75

7.1.14. Foreign direct investment, net (BoP, current US$ Billion) 76

7.1.15. Net foreign direct investment as % of GDP 77

7.1.16. Mining, Manufacturing, Utilities Output (LCU Billion) 78

8. Appendix 79

8.1. About SDI 79

8.2. Disclaimer 79

Table

List of Tables

Table 1: Czech Republic Land Forces Strength 13

Table 2: Czech Republic Air Force Strength 14

Table 3: Czech Republic Ongoing Procurement Programs 15

Table 4: Czech Republic Future Procurement Programs 15

Table 5: Czech Republic Defense Expenditure (CZK Billion & US$ Billion), 2014-2023 19

Table 6: Czech Republic GDP Growth vs. Defense Expenditure as a Percentage of GDP, 2014-2023 22

Table 7: Czech Republic Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023 24

Table 8: Czech Republic Defense Capital Expenditure (CZK Billion & US$ Million), 2014-2023 26

Table 9: Czech Republic Defense Expenditure Allocation (% Share), 2014-2023 28

Table 10: Czech Republic Defense Budget in CZK Billion – Breakdown by Services (Army, Air Force, CSAC and Others) 2014-2023 30

Table 11: Czech Republic Defense Budget in US$ Billion – Breakdown by Services (Army, Air Force, CSAC and Others) 2014-2023 32

Table 12: Czech Republic Per-Capita Defense Expenditure (US$), 2014-2023 34

Table 13:Czech Republic Homeland Security Expenditure (CZK Billion & US$ Billion), 2014-2023 36

Table14: Terrorism Index, 2018 41

Table 15: Benchmarking with Key Markets – 2014-2018 vs. 2019-2023 44

Table 16: Top 10 Czech Republic Defense Market Sectors by Value (US$ Million) – 2018-2023 48

Table 17: Offset Regulations in the Czech Republic 57

Table 18: Market Entry Strategies by Key Foreign Companies 59

Table 19: Competitive Landscape of the Czech Defense Industry 61

Figures

List of Figures

Figure 1: Czech Republic Defense Expenditure (CZK Billion), 2014-2023 20

Figure 2: Czech Republic Defense Expenditure (US$ Billion), 2014-2023 20

Figure 3: Czech Republic GDP Growth vs. Defense Expenditure as Percentage of GDP, 2014-2023 23

Figure 4:Czech Republic Budget Split Between Capital and Revenue Expenditure (%),2014-2023 25

Figure 5: Czech Republic Defense Capital Expenditure (CZK Billion), 2014-2023 27

Figure 6:Czech Republic Defense Capital Expenditure (US$ Million), 2014-2023 27

Figure 7: Czech Republic Defense Expenditure Allocation (% Share), 2014-2023 29

Figure 8: Czech Republic Defense Budget in CZK Billion – Breakdown by Services (Army, Air Force, CSAC and Others) 2014-2023 31

Figure 9: The Czech Republic Defense Budget in US$ Billion – Breakdown by Services (Army, Air Force, CSAC and Others) 2014-2023 33

Figure 10: Czech Republic Per Capita Expenditure (US$), 2014-2023 35

Figure 11: Czech Republic Homeland Security Budget (CZK Billion), 2014-2023 37

Figure 12: Czech Republic Homeland Security Budget (US$ billion), 2014-2023 37

Figure 13: Terrorism Heat Map, 2018 40

Figure 14: Terrorism Index, 2018 43

Figure 15: Benchmarking with Key Markets – 2014-2018 vs. 2019-2023 45

Figure 16: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2018 and 2023 46

Figure 17: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2018 47

Figure 18: Czech republic Defense Imports (US$ Million), 2013-2017 50

Figure 19: Czech Republic Defense Imports by Country (%), 2013-2017 51

Figure 20: Czech Republic Defense Imports by Category (%),2013-2017 52

Figure 21: Czech republic Defense Exports by Value (US$ Million), 2013-2017 53

Figure 22: Czech Republic Defense Exports by Country (%),2013-2017 54

Figure 23: Czech republic Defense Exports by Category (%),2013-2017 55

Figure 24: Czech Republic GDP Per Capita, 2015-2025 63

Figure 25: Czech Republic GDP, Current Prices (In USD Billion), 2015-2025 64

Figure 26: Czech Republic Exports of goods and services, current prices (LCU Billion), 2005- 2014 65

Figure 27: Czech Republic Imports of goods and services, current prices (LCU Billion), 2005- 2014 66

Figure 28: Czech Republic Gross National Disposable Income (USD Billion), 2005-2013 67

Figure 29: Local Currency Unit per US$- Exchange Rate , 2015-2024 68

Figure 30: Czech Republic Market Capitalization of Listed Companies (USD Billion), 2005-2012 69

Figure 31: Czech Republic Market Capitalization of Listed Companies as percentage of GDP, 2005-2012 70

Figure 32: Czech Republic Government Cash Surplus/Deficit as a percentage of GDP, 2005-2012 71

Figure 33: Czech Republic Goods Exports as a percentage of GDP, 2005-2014 72

Figure 34: Czech Republic Goods Imports as a percentage of GDP, 2005-2014 73

Figure 35: Czech Republic Service Imports as a percentage of GDP, 2005-2014 74

Figure 36: Czech Republic Service Exports as % of GDP, 2005-2014 75

Figure 37: Czech Republic Foreign direct investment, net (BoP, current USD Billion), 2005-2014 76

Figure 38: Czech Republic Net foreign direct investment as % of GDP, 2005-2014 77

Figure 39: Czech Republic Mining, Manufacturing, Utilities Output (LCU Billion), 2005-2014 78

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