Airbus pursues innovation in ‘China’s Silicon Valley’

By Wang Yi Source:Global Times Published: 2018/12/12 21:18:41

An Airbus plane displayed in Beijing Photo: VCG

Airbus is speeding up its innovative approach in China, with plans to invest tens of millions of euros in the Airbus China Innovation Centre (ACIC) based in "China's Silicon Valley" Shenzhen, South China's Guangdong Province.

Airbus has enjoyed its deep cooperation strategy in an opening China, voluntarily transferring part of its technology to expand market, and it's why the company is keen to promote further cooperation, analysts said.

ACIC was the company's second global innovation center after the one in Silicon Valley. The Chinese facility, established in 2017, is planning to invest tens of millions of euros to start a brand new office at the beginning of 2019, reported on Tuesday.

The center has made progress in key programs including onboard hardware, cabin experience, onboard interconnections, smart manufacturing and urban air traffic, the report said.

ACIC has started cooperation with a series of Chinese companies, including flexible display manufacturer Royole Technology and China Mobile Intelligent Mobility Network Technology Co. It also plans to cooperate with navigation network company Beidou and tech giant Huawei.

Lin Zhijie, an independent analyst based in East China's Fujian Province, told the Global Times on Wednesday that ACIC is focused on the "last mile" application of technology innovation to improve passengers' onboard experience. It's cooperating with companies with mature technologies, and it doesn't ask for much investment.

ACIC's approach doesn't involve its own core business of making planes, Qi Qi, an independent market watcher, told the Global Times on Wednesday.

The Europe-based aviation champion's deep cooperation strategy has increased its growth in the China market significantly, helping it catch up with and lead its competitor Boeing. The latter is still under the cloud of the China-US trade war, and its dropping share price is seen as an indicator of the trade war by market participants.

As of late 2017, Airbus' final assembly line in Tianjin had assembled and delivered 352 A320 aircraft.

Boeing plans to deliver its first 737 MAX assembled in Zhoushan, South China's Zhejiang Province in December.

"Airbus' market share in China has grown from 20 percent to 50 percent, broadly equal to Boeing, and its localization strategy has played a positive role," Lin said.

In terms of localization, Airbus is leading the game with Boeing. From its assembly line in Tianjin to the ACIC, the company is enjoying win-win cooperation with China, Lin added.

Boeing's 737 delivery center in Zhoushan just does decorative painting and test flights.

Airbus-established final assembly line in Tianjin is voluntarily transferring part of its technology to expand market, Qi said.

China needs about 8,575 aircraft worth $1.2 trillion during the next two decades, the Commercial Aircraft Corp of China has estimated. Experts said this is a big opportunity for Airbus and Boeing, as China's domestically developed planes are still not in operation.

"The plane markets in China and around the world will still be dominated by Boeing and Airbus for a long time," Qi said.

"For the global industry, free and fair trade is critical.

"China is a significant part of aviation champions' global market business. The trade war is casting a cloud over the industry, but in the long term, manufacturers need to win the market with quality products."


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