The Future of the Malaysia Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2022


The Future of the Malaysia Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2022, published by Strategic Defence Intelligence, 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.

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This report offers detailed analysis of the Malaysian defense industry with market size forecasts covering the next five years. This report will also analyze factors that influence demand for the industry, key market trends, and challenges faced by industry participants.

In particular, it provides an in-depth analysis of the following –
– The Malaysian defense industry market size and drivers: detailed analysis of the Malaysian defense industry during 2018-2022, 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 capital expenditure and revenue expenditure. It also details the key challenges faced by defense market participants within the country
– Porter’s Five Force analysis of the Malaysian 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 Malaysian defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis


– The defense budget of Malaysia for the year 2017 is US$3.5 billion, which reflected a drop of 17.6% from the previous year. For the historic period, 2013-2017, the defense budget of the country registered a CAGR of -8.58%. One of the major causes of this falling defense budget over the years is the lower percentage allocation of GDP towards defense sector. Malaysia has also postponed some of its new procurement programs and is increasingly favoring the modernization of its current equipment to cut costs. This is part of attempts by the Malaysian government to bring in economic reforms and stabilize the economy. Malaysia has also released the 11th growth plan, wherein plans for achieving economic growth have been well drafted. It is expected that with the implementation of the plans the country’s GDP will rise.
– During the historic period, the Malaysian MoD allocated an average of 21.1% of the total defense budget to capital expenditure, while an average of 78.9% was reserved for revenue expenditure. Over the forecast period, allocation towards capital expenditure is forecasted to remain at an average of 23.2%. For the next couple of years, allocation towards capital expenditure is expected to reduce slightly due to the postponement of some procurement programs.
– The MoD is expected to invest in multi-role aircraft and Armoured Personnel Carrier (APC).

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Reasons to buy

– This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Malaysian 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 Malaysian defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts

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Table of Contents
1. Introduction 8
1.1. What is this Report About? 8
1.2. Definitions 8
1.3. Summary Methodology 10
1.4. About Strategic Defence Intelligence 11
2. Executive Summary 12
3. Market Attractiveness and Emerging Opportunities 14
3.1. Current Market Scenario 15
3.1.1. Primary Threat Perception 15
3.1.2. Military Doctrine & Strategy 17
3.1.3. Military Fleet Size 20
3.1.4. Procurement Programs 23
3.1.5. Social, Political, and Economic Environment & Support for Defense Projects 25
3.1.6. Political and Strategic Alliances 26
3.2. Defense Market Size Historical and Forecast 27
3.2.1. The Malaysian defense budget is expected to reach US$4.5 billion by 2022, at a CAGR of 6.31% 27
3.2.2. Modernization of the armed forces, participation in UN peacekeeping operations, and territorial disputes are the major drivers of the Malaysian defense industry 29
3.2.3. Defense budget as a percentage of GDP will average 0.99% over the forecast period 31
3.3. Analysis of Defense Budget Allocation 33
3.3.1. Capital expenditure allocation is expected to increase slightly over the forecast period 33
3.3.2. The Malaysian defense capital expenditure is expected to reach US$1.1 billion by 2022, at a CAGR of 7.93% 35
3.3.3. Defense expenditure allocation on others expected to remain highest 37
3.3.4. Budget allocation on others is expected to remain highest over the forecast period 38
3.3.5. Per capita defense expenditure expected to increase during the forecast period 42
3.4. Homeland Security Market Size and Forecast 43
3.4.1. Malaysian homeland security expenditure is expected to grow at a CAGR of 3.07% over the forecast period 43
3.4.2. The homeland security expenditure in Malaysia is mainly driven by rising criminal activities and natural disasters 45
3.4.3. Malaysia is “moderately affected” by terrorism 47
3.4.4. Malaysia faces “moderate risk” from acts of terrorism 48
3.4.5. Malaysia has a terrorism index score of “2.7” 50
3.5. Benchmarking with Key Global Markets 51
3.5.1. Malaysian defense expenditure is expected to increase over the forecast period 51
3.5.2. Malaysian defense expenditure is lower than other Asian countries 53
3.5.3. The Malaysian defense budget as a percentage of GDP is expected to decline over the forecast period 54
3.6. Market Opportunities: Key Trends and Growth Stimulators 55
3.6.1. Multi-Role Aircraft 55
3.6.2. Armored Personnel Carrier (APC) 56
4. Defense Procurement Market Dynamics 57
4.1. Import Market Dynamics 58
4.1.1. Malaysian defense imports are expected to increase over the forecast period 58
4.1.2. Germany and France to remain the key arms suppliers to Malaysia 59
4.1.3. Aircrafts accounted for the majority of imports during 2012-2016 60
4.2. Export Market Dynamics 61
4.2.1. Negligible defense exports for Malaysia 61
5. Industry Dynamics 62
5.1. Five Forces Analysis 62
5.1.1. Bargaining power of supplier: low 63
5.1.2. Bargaining power of buyer: medium to high 63
5.1.3. Barrier to entry: medium 63
5.1.4. Intensity of rivalry: medium to high 63
5.1.5. Threat of substitution: Medium 64

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