Destination China for private jets
International private jet manufacturers are setting up assembly lines in China, hoping to emulate the success enjoyed by foreign carmakers that began operations on the mainland over a decade ago.
Riding on the publicity it attracted when martial arts star Jackie Chan bought an Embraer private jet in February, the Sao Paulo-based private jet manufacturer has decided to assemble its US$28 million Legacy 650 jet in Harbin.
It is converting an assembly line previously used to roll out its 50-seat Embraer ECJ-145 in a joint venture with Aviation Industry Corporation of China (AVIC) in the north-east province.
Guan Dongyuan, president of Embraer China, said once the conversion was completed by the end of next year he expected five L650s to be produced in the Harbin plant each year.
Orders for the private jet now stood at 17, compared with 22 in total for all Embraer's jet on the mainland, said Guan.
He said the L650 had become even more of a hot ticket since Jackie Chan had bought one and it had become known as the 'JC Jet'.
At a static display staged during a business aviation conference in Shanghai last month, the JC Jet proved the most popular among the 28 aircraft on show, as excited visitors queued to explore the cabin of the movie star's private jet.
Wichita-based Cessna, the largest general aviation manufacturer in the world, also signed a framework of agreement with AVIC last month to build two medium-size private jets, the Citation Sovereignty and Latitude, in a joint venture in Chengdu.
'We would like to promote interest in private jets in this part of the world and stimulate demand by setting up a secondary production line here,' said Michael Shih, Cessna vice-president for China strategy and business development.
'Since China has little experience in general and business aviation it needs help to develop the infrastructure, whether it is in operations or manufacturing.'
AVIC commenced talks last year with all eight major private jet makers in the world aimed at forming joint-venture partnerships.
It came as a surprise to the industry, however, when it picked Embraer and Cessna as partners, since the two are known for producing small- to medium-sized private jets, while the large-cabin Gulfstream 450 and G550 private jets are the best sellers on the mainland.
Savannah-based Gulfstream, which has a 48 per cent of market share of the 109 private jets operated on the mainland, has yet to decide whether to build its planes in the country.
'Mainland buyers used to be obsessed with large aircraft due to trophy-buying reasons when the market started to boom three years ago,' said David Tang, chief legal consultant for Minsheng Financial Leasing, which has also ordered more than 100 private jets.
'Now buyers are more reasonable, instead of buying for the sake of matching others.'
Larry Flynn, president of Gulfstream Aerospace, said since the aircraft maker's Savannah production line was undergoing a US$500 million expansion it did not need to set up a line in China at present.
Cessna's Shih said the preliminary agreement between Cessna and AVIC envisaged an 'over-arching' co-operation.
For three decades Beijing had focused on expanding commercial aviation aimed at moving the masses and this had given rise to an 'inverted pyramid' in the development of the industry, said Shih.
Now it has to widen that focus to provide a foundation for all kinds of aviation and the co-operation between AVIC and Cessna would include training of pilots and mechanics, as well as establishing maintenance facilities.
Shih said Cessna would also partner with AVIC to develop a large-cabin private jet in the future.
In the US, general aviation and business aviation account for this much of GDP. In China it is less than a thousandth of 1 per cent