In response to standing NATO directives, several member states have actively implemented new vessel procurement programs. CEE countries like Poland, Bulgaria and Romania are modernising their largely Soviet-era fleets while countries with advanced navies, like Italy, push for high technology solutions.
New analysis from Frost & Sullivan (aerospace.frost.com), European Naval Sensors (EO/IR) Market Assessment, finds that the market earned revenues of over $28 million in 2008 and estimates this to reach $91 million in 2017. The market will likely grow by a further 35 per cent due to the rising importance for advanced technology and upgrades across European navies.
"Entry into the CEE markets requires a solid understanding of local regulations and requirements, though this alone does not automatically ensure success," states Frost & Sullivan Research Analyst Harish Balasubramanian. "The sensor market is experiencing a degree of consolidation; with larger companies increasingly dominating the market, while smaller local manufacturers focus primarily on domestic sales." However, technological advancement will shift this balance, by making it easier for smaller companies to bid on specific solutions.
To demonstrate their ability to fulfil common missions within NATO, CEE countries like Poland, Bulgaria and Romania face massive fleet upgrades of their mostly Soviet-era equipment. Poland faces the daunting task of modernising one of the largest fleets among the new NATO member states on a tight budget that is not expected to change over the forecast period. Price, therefore, will be the determining factor in this market.
Because developed navies tend to value technology over life-cycle service they should establish partnerships with other suppliers. "For countries like Italy with technologically advanced navies and a strong industrial base they are keen to retain, partial solution partnerships would facilitate entry into these markets," concludes Balasubramanian. Advanced technology and good life cycle support will be the major success factors in the Italian market.
The major challenge for the sensor industry in Europe is the fact that "the current perception of the navy's role remains inconsistent," notes Balasubramanian. "Existing threats as well as the role of naval forces are perceived differently across Europe, causing uncertainty regarding customer expectations. Stronger cooperation between market participants and end users could be a potential solution to this challenge."
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European Naval Sensors (EO/IR) Market Assessment / M2BB