Future of the Israeli Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023

Table of Contents

1. Introduction 10

• 1.1. What is this Report About? 10
• 1.2. Definitions 10
• 1.3. Summary Methodology 12
• 1.4. About GlobalData 13

2. Executive Summary 14

3. Market Attractiveness and Emerging Opportunities 16

• 3.1. Current Market Scenario 17
  • 3.1.1. Primary threat perception 17
  • 3.1.2. Military Doctrine & Strategy 18
  • 3.1.3. Military Fleet Size 23
  • 3.1.4. Procurement Programs 28
  • 3.1.5. Social, Political and Economic Environment & Support for Defense Projects 30
  • 3.1.6. Political and Strategic Alliances 31
• 3.2. Defense Market Size Historical and Forecast 32
  • 3.2.1. Israel’s gross defense expenditure (inclusive of income dependent expenditure) to register a CAGR of 5.83% over 2019-2023 32
  • 3.2.2. Israel’s net defense expenditure (excluding of income dependent expenditure) to register a CAGR of 5.18% over 2019-2023 35
  • 3.2.3. Israeli revenue dependent expenditure, inclusive of US military aid, will post a forecast-period CAGR of 8.27% 38
  • 3.2.4. Hostile neighborhood, combined with terrorist threats, will continue to drive Israeli defense expenditure 41
• 3.3. Analysis of Defense Budget Allocation 43
  • 3.3.1. The defense budget as a percentage of GDP is expected to be 5% over the forecast period 43
• 3.4. Analysis of Defense Budget Allocation 45
  • 3.4.1. The majority of Israel’s defense budget is earmarked for capital expenditure 45
  • 3.4.2. Capital expenditure forecast to increase at a CAGR of 5.90% over 2019-2023 47
  • 3.4.3. Per capita defense expenditure expected to increase over the forecast period 50
• 3.5. Homeland Security Market Size and Forecast 51
  • 3.5.1. Israeli homeland security market expected to grow at a CAGR of 6.00% over the forecast period 51
  • 3.5.2. Measures to curb illegal immigration and organized crime to drive homeland security expenditure over the forecast period 54
  • 3.5.3. Israel is “highly affected” by terrorism 55
  • 3.5.4. Israel faces a high level of threat from terrorist organizations 56
  • 3.5.5. Israel has a terrorism index score of 5.1 58
• 3.6. Benchmarking with Key Global Markets 59
  • 3.6.1. Israel is one of the largest defense spenders in the Middle East 59
  • 3.6.2. The US has the largest defense expenditure in the world 61
  • 3.6.3. Israeli defense expenditure expected to reach 4.9% of GDP by 2023 62
• 3.7. Market Opportunities: Key Trends and Growth Stimulators 63
  • 3.7.1. Top 10 Defense Sectors by Value (US$ Million) - Projections over 2018-2023 63
  • 3.7.2. Critical Infrastructure Protection - Physical Security 64
  • 3.7.3. Land-based C4ISR 65
  • 3.7.4. Multirole Aircraft 66

4. Defense Procurement Market Dynamics 67

• 4.1. Import Market Dynamics 68
  • 4.1.1. Defense imports increased after 2013 reaching highest point in 2015 68
  • 4.1.2. The US accounted for over 59.8% of Israeli defense imports during 2013-2017 69
  • 4.1.3. Aircraft accounted for the majority of Israeli defense imports 70
• 4.2. Export Market Dynamics 71
  • 4.2.1. Israel exports a major portion of its domestic defense production 71
  • 4.2.2. India, Azerbaijan and Vietnam emerged as the largest importers of Israeli defense equipment 72
  • 4.2.3. Missiles, sensors and air defense systems were the most exported defense goods 73

5. Industry Dynamics 74

• 5.1. Five Forces Analysis 74
  • 5.1.1. Bargaining Power of Supplier: Medium-High 75
  • 5.1.2. Bargaining Power of Buyer: High 75
  • 5.1.3. Barrier to Entry: Low to Medium 75
  • 5.1.4. Intensity of Rivalry: High 75
  • 5.1.5. Threat of Substitution: Medium to High 76

6. Market Entry Strategy 77

• 6.1. Market Regulation 77
  • 6.1.1. Offset policy requires foreign OEMs to invest 50% of the contract value in Israel 77
  • 6.1.2. Defense sector remains closed to foreign direct investment 77
• 6.2. Market Entry Route 78
  • 6.2.1. Procurement Policy and Process 78
  • 6.2.2. Foreign companies penetrate the market by supplying arms 78
  • 6.2.3. Foreign OEMs form alliances to market products in the global defense industry 78
• 6.3. Key Challenges 80
  • 6.3.1. Israeli defense industry highly dependent on the US 80
  • 6.3.2. Monopolistic competition 80

7. Competitive Landscape and Strategic Insights 81

• 7.1. Competitive Landscape Overview 81
  • 7.1.1. Domestic companies fulfill the majority of Israeli defense requirements 83
• 7.2. Key Foreign Companies 84
  • 7.2.1. General Dynamics: Overview 84
  • 7.2.2. General Dynamics: Products 84
  • 7.2.3. General Dynamics: Recent Announcements and Strategic Initiatives 84
  • 7.2.4. General Dynamics: Alliances 84
  • 7.2.5. General Dynamics: Recent Contract Wins 85
  • 7.2.6. Navistar Defense: Overview 86
  • 7.2.7. Navistar Defense: Products 86
  • 7.2.8. Navistar Defense: Recent Announcements and Strategic Initiatives 86
  • 7.2.9. Navistar Defense: Alliances 87
  • 7.2.10. Navistar Defense: Recent Contract Wins 87
  • 7.2.11. Lockheed Martin: Overview 88
  • 7.2.12. Lockheed Martin: Products 88
  • 7.2.13. Lockheed Martin: Recent Announcements and Strategic Initiatives 89
  • 7.2.14. Lockheed Martin: Alliances 89
  • 7.2.15. Lockheed Martin: Recent Contract Wins 90
  • 7.2.16. Raytheon: Overview 91
  • 7.2.17. Raytheon: Products 91
  • 7.2.18. Raytheon: Recent Announcements and Strategic Initiatives 92
  • 7.2.19. Raytheon: Alliances 92
  • 7.2.20. Raytheon: Recent Contract Wins 93
• 7.3. Key Public Companies 94
  • 7.3.1. Rafael Advanced Defense Systems: Overview 94
  • 7.3.2. Rafael Advanced Defense Systems: Products 94
  • 7.3.3. Rafael Advanced Defense Systems: Recent Announcements and Strategic Initiatives 97
  • 7.3.4. Rafael Advanced Defense Systems: Alliances 98
  • 7.3.5. Rafael Advanced Defense Systems: Recent Contract Wins 99
  • 7.3.6. Israel Aerospace Industries: Overview 100
  • 7.3.7. Israel Aerospace Industries: Products 100
  • 7.3.8. Israel Aerospace Industries: Recent Announcements and Strategic Initiatives 101
  • 7.3.9. Israel Aerospace Industries: Alliances 103
  • 7.3.10. Israel Aerospace Industries: Recent Contract Wins 104
  • 7.3.11. Elta Systems: Overview 106
  • 7.3.12. Elta Systems: Overview 106
  • 7.3.13. IMI Systems: Overview 109
  • 7.3.14. IMI Systems: Products and Services 109
  • 7.3.15. IMI Systems: Recent Announcements and Strategic Initiatives 110
  • 7.3.16. IMI Systems: Alliances 111
  • 7.3.17. IMI Systems: Recent Contract Wins 112
• 7.4. Domestic Private Companies 113
  • 7.4.1. Israel Shipyards: Overview 113
  • 7.4.2. Israel Shipyards: Products 113
  • 7.4.3. Israel Shipyards: Recent Announcements and Strategic Initiatives 113
  • 7.4.4. Israel Shipyards: Recent Contract Wins 114
  • 7.4.5. Elbit Systems: Overview 115
  • 7.4.6. Elbit Systems: Products 115
  • 7.4.7. Elbit Systems: Recent Announcements and Strategic Initiatives 117
  • 7.4.8. Elbit Systems: Alliances 118
  • 7.4.9. Elbit Systems: Recent Contract Wins 119
  • 7.4.10. Elbit Systems: Financial Analysis 122
  • 7.4.11. Elisra Systems: Overview 124
  • 7.4.12. Elisra Systems: Products 124
  • 7.4.13. Elisra Systems: Recent Announcements and Strategic Initiatives 125
  • 7.4.14. Elisra Systems: Alliances 126
  • 7.4.15. Elisra Systems: Recent Contract Wins 127
  • 7.4.16. TSG IT Advanced Systems Ltd.: Overview 128
  • 7.4.17. TSG IT Advanced Systems Ltd.: Products and Services 128
  • 7.4.18. TSG IT Advanced Systems Ltd.: Recent Announcements and Strategic Initiatives 129
  • 7.4.19. TSG IT Advanced Systems Ltd.: Alliances 130
  • 7.4.20. TSG IT Advanced Systems Ltd.: Recent Contract Wins 130
  • 7.4.21. Plasan: Overview 131
  • 7.4.22. Plasan: Products 131
  • 7.4.23. Plasan: Recent Announcements and Strategic Initiatives 131
  • 7.4.24. Plasan: Alliances 132
  • 7.4.25. Plasan: Recent Contract Wins 133
  • 7.4.26. SimiGon: Overview 134
  • 7.4.27. SimiGon: Products 134
  • 7.4.28. SimiGon: Recent Announcement and Strategic Initiatives 135
  • 7.4.29. SimiGon: Alliances 135
  • 7.4.30. SimiGon: Recent Contract Wins 136

8. Business Environment and Country Risk 138

• 8.1. Economic Performance 138
  • 8.1.1. GDP Per Capita 138
  • 8.1.2. GDP, Current Prices 139
  • 8.1.3. Export of Goods and Services (LCU Billion) 140
  • 8.1.4. Import of Goods and Services (LCU Billion) 141
  • 8.1.5. Gross National Disposable Income (US$ Billion) 142
  • 8.1.6. Local Currency Unit per US Dollar 143
  • 8.1.7. Market Capitalization of Listed Companies 144
  • 8.1.8. Market Capitalization of Listed Companies (% of GDP) 145
  • 8.1.9. Government Cash Surplus/Deficit as a Percentage of GDP 146
  • 8.1.10. Goods exports as a Percentage of GDP 147
  • 8.1.11. Goods imports as a Percentage of GDP 148
  • 8.1.12. Service Imports as a Percentage of GDP 149
  • 8.1.13. Service Exports as a Percentage of GDP 150
  • 8.1.14. Foreign Direct Investment 151
  • 8.1.15. Net Foreign Direct Investment as a Percentage of GDP 152
  • 8.1.16. Mining, Manufacturing, Utilities Output (LCU Bn) 153

9. Appendix 154

• 9.1. About GlobalData 154