China has emerged as the world's second largest country for the Aviation market. With a GDP growth rate of more than 7 percent, the country exhibits excellent opportunities, especially in the Aerospace market. Owing to this tremendous growth, there has been an increase in demand for commercial aircrafts by airline companies. The Chinese government is also increasingly encouraging Chinese companies to manufacture indigenous commercial aircrafts to meet the rising demand and also to boost the economic growth of the country. An increase in the Manufacturing sector would enhance the employment rates and GDP of the country.
The Commercial Aircraft market in China is growing steadily. The Commercial Aircraft Manufacturing market in China, the Commercial Aircraft Parts Manufacturing market in China, and the MRO market in China are growing at a CAGR of 3.78 percent, 9.37 percent, and 7.19 percent, respectively, during the period 2013-2018.
Source: TechNavio Analysis
There are several factors that drive the growth of the Commercial Aircraft market in China. One of the major drivers is the rapid economic growth in the country. This has resulted in the increase in demand among the burgeoning Middle Class Population segment. The growing middle class in China and surrounding countries increasingly prefers to travel by air for tourism, local business needs, and healthcare needs, owing to their increase in disposable income. This has urged the airline companies to purchase more commercial aircrafts to match the growing demand. Another major driver is the rapid growth of LCCs in the country, which offer low cost air fares.
Despite the presence of several drivers, the Commercial Aircraft market in China is curtailed by certain serious challenges. One of the main challenges in this market is the lack of compliance with safety standards. Chinese products are always accompanied with a skeptical view with regard to safety and reliability. This results in sluggish growth for the Commercial Aircraft market in China and other countries. Another major challenge is the lack of skilled workforce in Shanghai.
Despite the presence of these challenges, the Commercial Aircraft market in China is witnessing some impressive trends in the market. One of the key trends is the brewing competition among the aircraft manufacturers in China. China is planning to roll out its indigenous commercial 168-seater passenger aircraft, C919, by 2015. It is expected to set in tough competition for the other international aircraft manufacturers based in China. Another major trend in the market is the increasing strategic partnerships between international aircraft manufacturers and Chinese aircraft manufacturers and Chinese aircraft parts manufacturers. The Chinese market players aim to learn the technical know-how to enable themselves as future leaders in the market.