China and India lagging

Why are the developing economies of India and China still lagging in terms of building their aviation industries compared to other sectors? Many players including Pratt, GE, Airbus and Boeing are beginning to invest in assembly and production in both India and China, but so far this has remained small.

McKinsey group has produced a report which shows that Russia, China and India originate around 3% of aerospace output in compared to 33% for automotive, 18% for large industrial equipment. Given the their large domestic civil and military markets and the clear cost advantages in terms of labor it seems there is a mismatch with 97% of production still coming from the high cost west. Much of the 3% is in fact “offset” production so it is almost fair to say that some of the largest and fastest growing economies have virtually no aerospace market.

Several reasons seem to exist for this including western reluctance to outsource an industry so closely related to defense, regulatory constraints, intellectual property, but the lack of capability to manage data from multiple sources for multiple end uses for multiple users is also a showstopper as far as technology and IT infrastructure goes..

Lifecycle management for all types and major components now need data-rich IT systems and without them they will continue to struggle to provide the levels of aftercare necessary to meet operators expectations.

So what holds them back from adopting this type of system? It is hard to find any solid research to this, but is seems likely that the very focus on manufacturing that has allowed them to develop quickly in other industries has worked as a brake to them adopting full life cycle approach to aviation. The Enterprise Asset Management (EAM) wave has yet to hit.