Saudi Arabia Defense Market - Growth, Trends, and Forecast (2020 - 2025)

The Saudi Arabian Defense Market is segmented by Type (Personnel Training and Protection, Communication Systems, Weapons and Ammunition, and Vehicles).

Market Snapshot

Study Period:

2017-2025

Base Year:

2019

CAGR:

2 %

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Market Overview

The Saudi Arabian Defense Market is anticipated to register a CAGR of over 2% during the forecast period (2020-2025).

· The country is one of the primary military spenders in the world, and the primary importer of arms from the United States. The high defense spending of the country, due to its robust economy and high GDP, made the market lucrative for several local and foreign players.

· Rising political tensions in the Middle-East led the country to invest more in the defense sector. A high amount of wealth in the country makes it an attractive place for illegal activities. Due to such factors, the Saudi Arabian government has plans to modernize its military by 2030.

· However, in the past three years, the government reduced its defense spending to focus more on the education sector. Such a move in the future may hamper the growth of the market, to a certain extent.

Scope of the Report

The Saudi Arabian defense market covers all aspects of military vehicle, armament, and other equipment procurements, and provides insights into the budget allocation and spending of the country in the past, present, as well as during the forecast period.

Type
Personnel Training and Protection
Training and Simulation
Protection Euipment
Communication Systems
Weapons and Ammunition
Artillery and Mortar Systems
Infantry Weapons
Missile and Missile Defense Systems
Ammunitions
Vehicles
Land-based Vehicles
Sea-based Vehicles
Air-based Vehicles

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Key Market Trends

Increasing Terrorist Activities and Geopolitical Conflicts in the Neighboring Countries are Driving the Growth of the Market

Countries in the Middle East, like Iran, Libya, Syria, and Iraq, are experiencing continuous terrorist activities. The country is one of the leading nations, and it collaborated with its allies to combat terrorism in the past years. With the increasing investments in the counter-terrorism activities are anticipated to propel the procurements of arms and ammunition in the coming future. Additionally, Saudi Arabia’s neighboring countries are facing many geopolitical conflicts. The country is actively participating in the conflicts of Yemen. Moreover, Saudi has conflicts with Iran and Qatar. Due to the aforementioned factors, the country had spent huge amounts on its defense. Although the defense spending reduced in the recent past, the country was still among the top defense spenders, globally. This can be attributed to the country's ambitions to emerge as a strong military power, as well as to be the region's defense powerhouse.

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The Vehicles Segment is Expected to Register the Highest Growth during the Forecast Period

Saudi's aggressive procurement of armaments and military vehicles is expected to be a huge growth driver for the market. Saudi Arabia was the largest arms importer in the world during 2015-2019. There was a 130% increase in the volume of arms imports in 2015-2019, as compared to the imports during the period of 2010-2014. Saudi Arabia imported arms and ammunition from the US (73%), the UK (13%), France (4.3%), and China and Russia (less than 1%). In 2019, the country received 30 fighter aircraft, along with missiles and guided bombs from the US; armored vehicles from Canada and France; patrol boats from France; and trainer aircraft and missiles from the UK. In April 2020, the Saudi Arabian government and Canadian government renegotiated the terms of a USD 14 billion light armored vehicles contract. In the renegotiated contract, General Dynamics will supply light-armored vehicles worth USD 14 billion to Saudi Arabia in the coming years. Despite the decrease in military spending, the country is continuously modernizing its fleet of land, air, and sea platforms, which is anticipated to bolster the growth of the segment during forecast period.

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Competitive Landscape

The market in the country is dominated by foreign players, mainly those from the United States. Notable companies among them include Lockheed Martin Corporation, the Boeing Company, and Raytheon Technology Company, among others. However, the government is trying to develop its indigenous defense manufacturing capabilities. The Government of Saudi Arabia is focusing on implementing policies to ensure that its publicly held defense manufacturers account for more than 50% of its defense revenue share, by 2030. For instance, in April 2018, Saudi Arabian Military Industries (SAMI) signed an agreement with Navantia, a Spanish shipbuilding company, to create a joint venture in Saudi Arabia, mainly to localize 60% of naval industries. According to the Navantia, this venture will be a supplier and integrator of the combat systems for the future naval program contracts in Saudi Arabia. Later, in September 2019, SAMI Navantia Naval Industries signed a USD 987.34 million contract with Navantia to collaborate on Combat System Integration (CSI) on the Avante 2200 corvettes for the Royal Saudi Naval Forces. Such initiatives may reduce the market share of foreign companies in the country during the forecast period.

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Table Of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Overview

    2. 4.2 Market Drivers

    3. 4.3 Market Restraints

    4. 4.4 PESTLE Analysis

  5. 5. MARKET SEGMENTATION

    1. 5.1 Type

      1. 5.1.1 Personnel Training and Protection

        1. 5.1.1.1 Training and Simulation

        2. 5.1.1.2 Protection Euipment

      2. 5.1.2 Communication Systems

      3. 5.1.3 Weapons and Ammunition

        1. 5.1.3.1 Artillery and Mortar Systems

        2. 5.1.3.2 Infantry Weapons

        3. 5.1.3.3 Missile and Missile Defense Systems

        4. 5.1.3.4 Ammunitions

      4. 5.1.4 Vehicles

        1. 5.1.4.1 Land-based Vehicles

        2. 5.1.4.2 Sea-based Vehicles

        3. 5.1.4.3 Air-based Vehicles

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Company Profiles

      1. 6.1.1 Saudi Arabian Military Industries

      2. 6.1.2 Advanced Electronics Company Limited

      3. 6.1.3 Lockheed Martin Corporation

      4. 6.1.4 The Boeing Company

      5. 6.1.5 BAE Systems PLC

      6. 6.1.6 Raytheon Technologies Corporation

      7. 6.1.7 Northrop Grumman Corporation

      8. 6.1.8 General Dynamics Corporation

      9. 6.1.9 Airbus SE

      10. 6.1.10 Leonardo SpA

      11. 6.1.11 Almaz-Antey

      12. 6.1.12 Thales Group

  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

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