Chinese Bizjet Mismatch: Demand Vs. Assembly Plans

By Bradley Perrett, Graham Warwick
Source: Aviation Week & Space Technology
October 14, 2013
Credit: Cessna Aircraft

Cessna and Embraer business jets should soon begin rolling out of Chinese factories, but how many of them will Chinese buyers want? While China's business aviation market has grown powerfully since 2008, its preference for large aircraft—larger than Cessna's—shows no signs of changing. Recent sales trends seem stronger for Embraer, which until last year had almost none of its aircraft in China.

And in business aviation, for once, buyer preference is an almost completely dominant factor in Chinese aircraft demand. China's industry and its Western partners are almost always assured of local orders for commercial airliners assembled or partly built in China; helicopter manufacturing, too, can enjoy the support of government buyers. But neither the government nor its companies are buying many business jets, and the state is not directing the choices of private buyers, just as it would not tell them which luxury cars to choose. And they are mainly choosing Gulfstreams.

Cessna has been working with Avic on projects to build at least three of its aircraft types in China: the mid-size Citation Sovereign with Avic's fighter subsidiary AAT in Chengdu; and the super-light Citation XLS+ in Zhuhai and Caravan utility turboprop in Shijiazhuang, both in factories of Caiga, Avic's general-aviation business. The Citation Latitude, not due to fly until 2014, has been a later prospect for production in Chengdu.

The first Chinese Caravan was due to be completed by the third quarter, but by July, this had slipped to year-end. At that time, XLS+ deliveries from the Zhuhai plant were due to begin in 2014, having slipped from this year. For the Sovereign, Cessna was still in talks with AAT and the Chengdu city government in April (AW&ST April 22, p. 24). Production volume targets have not been disclosed.

Aircraft of XLS+ and Sovereign size are not the focus of demand in China, however, and there are few signs of that changing. “Over the last 3-4 years, [mainland China] market shares of Gulfstream and Bombardier have not changed significantly year to year,” says Hong Kong business aviation consultancy Asia Sky Group, reviewing figures up to 2012. “What is happening, given the current market trends, is [Dassault] Falcon and Embraer are taking market share from Cessna and Hawker [Beechcraft].”

Embraer is setting up an assembly line for business jets in partnership with Avic at Harbin. A factory that formerly assembled ERJ 145 regional jets has been reequipped at apparently little expense for the closely related Legacy 650 super mid-size jet. The latter is closer to current Chinese tastes for large aircraft. The first 650 from Harbin is due for delivery by year-end, as planned, says Embraer.

The Brazilian manufacturer had a negligible business aviation presence in the Chinese market until last year. By the end of 2012, the business-jet fleet in China, including Hong Kong, had eight Embraer aircraft, up from just one a year earlier, and compared with a Cessna fleet unchanged at 33 aircraft. Notably, five of the Embraers that arrived last year were Legacy 650s and one was an almost-identical Legacy 600. Moreover, Embraer booked orders for 28 aircraft in 2012, suggesting its fleet share will rise.

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