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The Changing Face of Asia Pacific Aerospace Manufacturing Market
Frost & Sullivan, March 2010, Pages: 72
This Frost & Sullivan research service titled The Changing Face of Asia Pacific Aerospace Manufacturing Market provides the current and future industry dynamics, revenue forecasts, and future market outlook. In this research, Frost & Sullivan's expert analysts thoroughly examine the following segments: engines, airframes & avionics and systems.
Market Overview
Compelling Cost Advantages Boost Prospects for the Asia Pacific Aerospace Manufacturing Market
Asia Pacific, Latin America, and the Middle East are rapidly emerging as the new aerospace manufacturing hubs. The global aerospace manufacturing industry is expected to grow at a healthy rate with majority of the manufacturing work shifting toward the Asia Pacific region. Today Asia Pacific accounts for more than one-third of the global composites manufacturing work. Countries in the Asia Pacific region have increased their share in the global aerospace manufacturing market. The figure can reach up to half of the total revenues by 2013. 'Attracted by the low labor costs, global equipment manufacturers are shifting manufacturing activities to China, India, and Malaysia,' notes the analyst of this research service. 'After accounting for transportation and others costs associated with managing the supply chain, total savings of 20 to 30 percent can still be achieved.' With escalating cost pressures, the majority of aerospace manufacturing work will be outsourced to the low-cost Asia Pacific countries. The offset policy, which has been implemented in many countries, requires western OEMs to give a stipulated portion of work to the domestic companies. All these point toward wider range of opportunity in the OEM market in Asia Pacific.
Although the market outlook is upbeat, there are some impediments reining in market progression. The complex aerospace global supply chain is impeding the growth of the aerospace industry. Numerous suppliers involved in the entire aerospace supply chain are dispersed throughout the globe. Inefficiency in supply relationship management has caused cost and time overruns, resulting in losses. The Asia Pacific aerospace manufacturing market is facing tough competition from the Latin American region, primarily Mexico and Chile. To reduce the supply chain risks, many North American aerospace giants have established their low-cost bases in Latin America. Unless the Asia Pacific countries provide substantial advantages through tax breaks or other concessions, this will prove to be a key restraint for future growth.
The performance of the aerospace manufacturing industry clearly shows that the engine and the component manufacturing businesses hold the maximum revenue share. Growing environmental consciousness has introduced new challenges in terms of efficient airframes and engines, and pressure has been intensifying on engine manufacturers to roll out more fuel-efficient and environment-friendly engines. 'Several countries in the Asia Pacific region have developed high expertise in the engine manufacturing segment,' says the analyst. 'Countries such as Singapore, China, and Japan are already in the top rung of the OEM ladder. Hence, more focus should be laid toward the engine segment to enhance the competitiveness of the aerospace manufacturing industry in Asia Pacific.' Airframes manufacturing is more labor-intensive compared to engines manufacturing, which is more technology intensive. Hence, Asia Pacific countries must pay more attention to the airframes manufacturing segment as it requires less expertise. Some key emerging areas in aerospace manufacturing are fleet recycling and conversion, green manufacturing, and smart mergers and acquisitions (particularly among the med-sized companies). There is an increasing trend in the aerospace industry to be vertically integrated to reduce supply chain risks and improve productivity. Business growth will be largely determined by the ability of manufacturers to offer excellent product quality and performance. Technical excellence must be at par with international standards. Striking partnerships will facilitate the seamless transfer of technological know-how and put the Asian companies on the fast track to progress.
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
- Defense aerospace
- Military defense
Technologies
The following technologies are covered in this research:
- Engines
- Airframes
- Avionics and systems
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