COVID-19 update included
The content of this report will be updated with the latest scenarios based on the global COVID-19 Pandemic


Summary

Regional disturbances such as the interstate power projection strategies of Iran, coupled with the growing threat from terrorist organizations across the region is compelling Saudi Arabia to become one of the largest defense spenders in the world. In 2015, the country briefly managed to displace Russia and emerge as the third largest defense spender, behind only the US and China. The volatility in oil prices forces the government to carefully balance expenditures within anticipated revenues and keep the deficit at a sustainable level.

Saudi Arabia has the one of the largest defense budgets globally which is expected to grow at a forecast CAGR of 6.45%. The 2019 budget aims to allocate sufficient funds to strategic infrastructure projects, as well as maintain infrastructure and continue to push for economic diversification by enhancing the participation of the private sector. The main factors driving defense expenditure in Saudi Arabia are the ongoing arms race among Middle Eastern nations due to growing turbulence in countries such as Syria, Iraq, and Yemen, combined with the perceived threat from Iran.

Saudi Arabian homeland security expenditure is expected to reach US$38.1 billion in 2024. Homeland security is an area that has gained prominence in Saudi Arabia over the last decade, with expenditure expected to increase from US$30.1 billion in 2020 to US$38.1 billion in 2024 at a CAGR of 6.03%. After the Arab Spring revolution in the Middle Eastern and the North African (MENA) region, and minor protests in Riyadh, the country is expected to increase expenditure to enhance security measures. The spread of the extremist group, IS, in neighboring Syria coupled with the Houthi rebellion in adjoining Yemen, has forced Saudi Arabia to invest in securing its borders.

Saud Arabia is the fifth largest global importer of military hardware. Although, the country plans to develop its local defense sector through SAMI under Vision 2030, it is anticipated that the production will be limited to small arms, maintenance, and support services. The US was the leading supplier of arms to Saudi Arabia, occupying a share of 68% with major contracts including the modernization of the Saudi M1A2 Tank fleet and E-3 AWACS, and the supply of UH-60 helicopters. In May 2017, Saudi Arabia’s King Abdulaziz City for Science and Technology (KACST) unveiled its Saqr 1 unmanned aerial vehicle, which has a range of 2,500km and features a satellite communication system. The country’s capital expenditure increased from US$8.6 billion in 2015 to US$14.5 billion in 2019, a CAGR of 13.77%, attributed primarily to the drastic erosion in global oil & gas prices worldwide.

The report "Future of the Saudi Arabian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2024", 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.

In particular, it provides an in-depth analysis of the following -

  • The Saudi Arabian defense industry market size and drivers: detailed analysis of the Saudi Arabian defense industry during 2020-2024, 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 the army, navy, and air force. It also details the key challenges faced by defense market participants within the country
  • Porter’s Five Force analysis of the Saudi Arabian defense industry: analysis of the market characteristics by determining the bargaining power of suppliers, bargaining power of buyers, threat of substitution, intensity of rivalry, and barriers to entry
  • Import and Export Dynamics: analysis of prevalent trends in the country’s imports and exports over the last five years
  • Market opportunities: details of the top five defense investment opportunities over the next 10 years
  • Competitive landscape and strategic insights: analysis of the competitive landscape of the Saudi Arabian defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis



Companies mentioned: BAE Systems Plc. , Airbus Group, General Dynamics Corporation, Lockheed Martin, Science Applications International Corporation (SAIC), Sikorsky Aircraft Corporation, Thales SA, Boeing, Northrop Grumman Corporation, Advanced Electronics Company (AEC) and Al Salam Aircraft Company


Scope

  • Saudi Arabia is one of the largest defense spenders in the world, behind the US, China, and Russia, with a military budget valued at US$50.9 billion in 2019. The country is the largest market in the Middle East due to its robust economic and financial position, backed by its oil exports. The rising tension with Iran, aggressive procurement strategies, and modernization programs, along with the need to strengthen its indigenous defense industry, are the main factors boosting the country’s military expenditure.
  • On a cumulative basis, the country is expected to invest US$300.2 billion for defense purposes, of which US$90.8 billion is earmarked for capital expenditure to fund defense procurements. The government’s well-defined military modernization plans along with its efforts to supress Houthi insurgency in Yemen as well as its support for rebel factions within Syria, are expected to stimulate the expenditure over the next few years
  • The MoD is expected to invest in physical security of vital assets, development of land based C4ISR cpaabilities and multi-role aircraft among others.




Reasons To Buy

  • This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Saudi Arabian 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
  • Detailed profiles of the top domestic and foreign defense manufacturers with information about their products, alliances, recent contract wins, and financial analysis wherever available. This will provide the user with a total competitive landscape of the sector
  • A deep qualitative analysis of the Saudi Arabian defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts.