The Boeing Company is studying to establish a factory in China to finish the last production procedures of Boeing 737 passenger airplanes, expecting to finish the final phrases of the airplane manufacture after the factory is completed in China, including the airplane japanning process. It will be the first overseas factory outside the USA by the Boeing, if the company decides to establish the factory in China. Currently, China’s aero-engine and civil aviation engine have a huge market space of over 100 billion yuan. The first overseas factory established in China by Boeing will benefit more Chinese companies to enter the accessories supply chain of the Boeing, and on the other hand, it will substantially improve the overall manufacturing level for China’s large airplanes, especially the aviation engine lagged for years.
First overseas factory of Boeing to establish in China
China is the largest overseas market for the Boeing Company. In 2014, the company set a new record that it has delivered 155 airplanes to Chinese clients, with the constant delivery of over 140 airplanes to China’s market for two years. Meanwhile, the company also obtained orders and commitment orders of over 400 airplanes from more than ten Chinese clients. In terms of 155 airplanes delivered to Chinese clients in 2014, new 737 airplanes accounted for the largest proportion to 119. The company expected on Sep. 10 that the Asian-Pacific region will have the largest demands for civil aviators and maintenance technicians worldwide in 20 years, accounting for 40 percent of the total demands in the world. And about 100,000 civil aviators and 106,000 maintenance technicians will be needed in China, with the largest proportion in the demands.
The Bloomberg information shows that the Boeing is studying to establish a factory in China to finish the last production procedures of Boeing 737 passenger airplanes, expecting to finish the final phrases of the airplane manufacture after the factory is completed in China, including the airplane japanning process, which will be the first overseas factory outside the USA by the company, if it finally decides to establish the factory in China.
Previously, Boeing has carried out cooperation with China’s airlines and aviation industry to let China involve in the manufacturing of Boeing 737, 747 and 787. There are over 8,000 Boeing airplanes in the world, utilizing the components and accessories made by China. Based on the statistics from www.boeing.cn, the first refit center for Boeing 747 to 400 passenger airplanes refitted projects in China makes over 35 Chinese companies as the direct suppliers to cooperate with the Boeing in the manufacturing field. Since 2011 to 2013, Boeing has successively reached the cooperation agreements on high-quality accessories and components with the stated-owned enterprises of China, including Shanghai Aircraft Manufacturing Co., Ltd. and Aviation Industry Corporation of China.
Aero-engine market size to reach RMB100 bln
Insiders point out that Boeing’s move of establishing the first overseas plant in China will allow more Chinese companies to participate in the supply chain of Boeing accessories. On the other hand, it will also substantially improve China’s overall level in manufacturing aircrafts, especially aero-engines, which accords with the development strategy of China’s high-end manufacture.
Due to the urgent demand for national defense construction equipment, the market of military engines boasts huge potential. BOCI Securities Limited predicts that there will be another 3,000 military aircrafts for air force and navy in next 10 years, and demand for the according engines will exceed 6,000 units. The sales of military aero-engines in China will be valued at more than 170 billion yuan in the following 10 year and the after-sales engine maintenance demand will be more than 110 billion yuan.
The civil aero-engine market will enjoy vaster potential. The civil aviation markets in European and American countries have been quite developed over the years, and the emerging markets represented by China will follow them. The boom in civil aircraft is bound to trigger relevant demand for aero-engines. Considering the forecast by Boeing and Airbus and the value of an aero-engine accounting for about 20 percent value of the whole aircraft, industry predicts that China’s aero-engine sales value will be up to 480 billion yuan and service market of components maintenance and replacement will reach over 320 billion yuan in next 10 years.
Translated by Jelly Yi and Vanessa Chen
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