Japan Defense Market - Growth, Trends, and Forecast (2019 - 2024)

The Japan Defense Market is segmented by the Armed Forces (Air Force, Army, and Navy).

Market Snapshot

Japan Defense Market Summary
Study Period:

2016-2024

Base Year:

2018

CAGR:

Greater than 2.5%

Key Players:

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Market Overview

The Japanese defense market is estimated to register a CAGR of over 2.5% during the forecast period 2019 - 2024.

  • The growth in the defense budget may be a major driver for the market.
  • Japan has the third-largest economy in the world. The Japanese defense industry is expected to witness growth in the coming years, owing to various contracts being secured from the United States for the development of the defense sector.
  • The environment surrounding Japan has become increasingly severe, with various challenges and destabilizing factors becoming more acute. In order to adapt to the growing changes in the security environment, Japan has been strengthening its defense capabilities at a rapid pace. The 2017 defense budget of Japan was the sixth-largest in the world (USD 47.2 billion) in that year. For the year 2018, Japan’s defense spending was USD 46.61 billion. 
  • Japanese defense companies have also started to participate in various new defense programs for self-propelled artillery, armored fighting vehicles, and infantry fighting vehicles.
  • Additionally, the fight against terrorism is also expected to support the growth of the defense market in Japan.
  • Technological advancements may lead to the replacement of the aging equipment and purchase of new equipment, and this may propel the growth of the market in the near future. 

Scope of the Report

The study covers all aspects and provides insights about the budget allocation and spending in the Japanese defense market. The report also includes details about the ongoing projects and military procurement plans.

Armed Forces
Air Force
Training and Simulation
Communication Systems
Weapons and Ammunition
Manned and Unmanned Aerial Vehicles
Army
Personal Training and Protection
Communication Systems
Weapons and Ammunition
Manned and Unmanned Ground Vehicles
Navy
Weapons and Ammunition
Sea-based Manned and Unmanned Vehicles
Communication Systems

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Key Market Trends

Air Force Segment is Expected to Register the Highest CAGR During the Forecast Period

The air force segment is expected to experience the major growth in the market during the forecast period, owing to various ongoing procurement plans for replacing the aging combat aircraft. Currently, Japan is pushing ahead with R&D in the advanced fighter jet technology, despite uncertainty over its acquisition strategy for a next-generation fighter. The country also plans to upgrade its aging F-2 fighter aircraft fleet. The increasing military strength of China has led the Japanese government to invest in advanced fighter aircraft with radar-evading stealth technology, advanced sensors to maintain situational awareness in the airspace, increased data-processing power, and the ability to conduct secure, automated, and real-time communications. Japan has plans to procure more than 100 F-35 fighter jets within the next decade. Moreover, acquiring these aircraft may provide Japan a competitive edge over the potential foes in Asia-Pacific, while also increasing the reliance of the country on the US military technology. In addition, Japan plans to develop its own fighter jet, which has been codenamed as the F-3. However, the high cost of military aircraft development may lead Japan to search for foreign partners, in order to collaborate on the project. Similarly, in 2018, the Japanese government reported the expected acquisition of nine E-2D Advanced Hawkeye (AHE) Airborne Early Warning and Control (AEW&C) aircraft from the United States. The Japan Air Self Defense Force (JASDF) maintains a fleet of 13 E-2C Hawkeyes and four E-767 aircraft, as part of its Airborne Early Warning Wing. The E-2Cs are expected to phase out of service by the late 2020s. Thus, upcoming procurements and developments may increase the focus on this segment, and this is expected to be the reason for its high CAGR during the forecast period.

Japan Defense Market segmentation

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Japan Defense Market is Anticipated to Experience a Steady Growth During 2019-2024

Japan’s military spending in 2018 accounted for 2.6% of its GDP, reaching USD 46.6 billion. In the same year, the cabinet of the Japanese Prime Minister announced that they have approved a plan to spend around USD 242.7 billion on defense for the next five years. The government’s defense policy features the conversion of the Japan Maritime Self-defense Force’s (JMSDF’s) two Izumo-class helicopter carriers into multirole aircraft carriers, from which, the short take-off and vertical landing (STOVL) Lockheed Martin F-35B Lightning II Joint Strike Fighter can be operated. Additionally, the new National Defense Program Guidelines (NDPGs) and the associated Mid-term Defense Plan (MTDP) have also put a strong emphasis on three new defense domains in the country, namely, cyber, space, and electronic warfare (EW). Developments in such domains are expected to be part of Japan’s new multidimensional integrated defense force. Japan also announced the intention of buying an additional 63 conventional take-off and landing (CTOL) F-35As and 42 STOVL F-35Bs over the coming decade for replacing 99 of the Japan Air Self-defense Force’s (JASDF’s) 201 Boeing-Mitsubishi F-15J/DJ Eagle multirole combat aircraft. In addition, Japan is joining the international race to add artificial intelligence and drones to its defense capabilities. Additionally, Japan is in plans to develop hypersonic weapons, in order to deter Chinese attacks on disputed islands in the East China Sea. The 2019 defense budget of Japan is estimated at USD 48.4 billion and includes a two-pronged strategy to support its forces: short-term measures that include upgrading electronic warfare and missile-defense capabilities and medium-term efforts that include the R&D of hypersonic weapons. Additionally, for future defense capabilities, Japan plans to enhance the response capability by pursuing further joint operations and improve the mission-capable rate of their defense equipment, while strengthening the logistical support foundations of the Self-defense Forces (SDF). Thus, various ongoing developments may lead to a growth in the Japanese defense market in the near future.

Japan Defense Market Geography

Competitive Landscape

Various players, such as Kawasaki Heavy Industries, Mitsubishi Heavy Industries, ShinMaywa Industries, Ltd, Japan Steel Works Ltd, and Toshiba Corporation, may hold significant market share during the forecast period. Various initiatives and product innovations are being made by companies, which have led them to strengthen their presence in the market. In 2018, Shinmaywa Industries Ltd announced that it signed a memorandum of understanding with Mahindra Defense for developing of US-2 amphibious aircraft. 

Major Players

  1. Kawasaki Heavy Industries
  2. Mitsubishi Heavy Industries
  3. ShinMaywa Industries Ltd
  4. Japan Steel Works Ltd
  5. Toshiba Corporation

* Complete list of players covered available in the table of contents below

japan defence market CL

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Deliverables

    2. 1.2 Study Assumptions

    3. 1.3 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. JAPAN DEFENSE IMPORT AND EXPORT ANALYSIS

  6. 6. JAPAN DEFENSE SPENDING AND BUDGET ALLOCATION

    1. 6.1 Personnel and provisions expenses

    2. 6.2 Material expenses

  7. 7. MARKET SEGMENTATION

    1. 7.1 Armed Forces

      1. 7.1.1 Air Force

        1. 7.1.1.1 Training and Simulation

        2. 7.1.1.2 Communication Systems

        3. 7.1.1.3 Weapons and Ammunition

        4. 7.1.1.4 Manned and Unmanned Aerial Vehicles

      2. 7.1.2 Army

        1. 7.1.2.1 Personal Training and Protection

        2. 7.1.2.2 Communication Systems

        3. 7.1.2.3 Weapons and Ammunition

        4. 7.1.2.4 Manned and Unmanned Ground Vehicles

      3. 7.1.3 Navy

        1. 7.1.3.1 Weapons and Ammunition

        2. 7.1.3.2 Sea-based Manned and Unmanned Vehicles

        3. 7.1.3.3 Communication Systems

  8. 8. COMPETITIVE LANDSCAPE

    1. 8.1 Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements

    2. 8.2 Vendor Market Share

    3. 8.3 Strategies Adopted by Leading Players

    4. 8.4 Company Profiles

      1. 8.4.1 Kawasaki Heavy Industries

      2. 8.4.2 Lockheed Martin Corporation

      3. 8.4.3 The Boeing Company

      4. 8.4.4 BAE Systems PLC

      5. 8.4.5 Raytheon Company

      6. 8.4.6 Northrop Grumman Corporation

      7. 8.4.7 Thales Group

      8. 8.4.8 Mitsubishi Heavy Industries

      9. 8.4.9 ShinMaywa Industries Ltd

      10. 8.4.10 Japan Steel Works Ltd

      11. 8.4.11 Toshiba Corp.

      12. 8.4.12 Komatsu Ltd*

    5. *List Not Exhaustive
  9. 9. MARKET OPPORTUNITIES AND FUTURE TRENDS

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