French Land Systems Market Reduces Costs with COTS

Wednesday 25 May 2011, Amsterdam

French domestic defence companies will be challenged by foreign competitors who are trying to penetrate the market to cater to the army's urgent operational requirements. On another front, there is the challenge of the French economy being likely to recover completely from the downturn only after the short term. The Government still faces a crisis, which is compelling it to curtail the country's defence budget. The increasing benefits of commercial-off-the-shelf (COTS) products is tempting the Government to reduce the initial funding required to develop a product prototype. In future, companies would have to self-fund to develop prototypes, thus impacting companies with limited budgets. "The cash-strained Government is reluctant to make any initial investment towards developing equipment prototypes," explains the analyst of the new market study available on ASDReports. "This would definitely be a hindrance to market participants with limited budgets." The current economic scenario has forced the Government to cut down on its defence spending. The impact of this budget reduction is being felt at all levels across the value chain. The upcoming land defence programmes in France are of significant value and hence, the competition to leverage these opportunities is expected to be intense. The French defence industry remains secluded and it is difficult for foreign companies to penetrate the market. "Partnering with domestic defence companies would enable foreign companies to gain access to the French land defence market," concludes the analyst. "It would also enable them to respond more effectively to urgent operational requirements." It is estimated that the French land defence market earned revenues of EUR973 million in 2009 and is estimated to reach EUR1.48 billion in 2019.