Small plane makers chase growth in China

At the higher end of the small aircraft industry, some say the smaller volumes in the business jet industry mean it makes little economic sense to construct new plant in China. Business jets cost millions of dollars to buy, or thousands of dollars to rent by the hour.

General Dynamics' Gulfstream Aerospace Corp, the market leader in Greater China according to consultancy Asian Sky Group, and Dassault Falcon Jet Corp, owned by France's Dassault Aviation SA, have no plans to make jets in China - just like Rolls-Royce and Bentley, their counterparts in the auto industry.

It's a minority point of view, according to many in China's aircraft industry.

"Nearly every global small plane maker, except Dassault Falcon and Gulfstream, has had discussions about a China JV," an executive at state-backed China Aviation Industry General Aircraft Co Ltd (CAIGA) with knowledge of the matter told Reuters.

"Some are making progress while others are still looking around. Like the automakers 20 years ago, no-one wants to be left behind."

Canada's Bombardier, second to Gulfstream in the Greater China business jet market, said it doesn't operate a business aircraft joint venture in China. It didn't disclose its future plans for the market.

Rational choice

For William Schultz, responsible for developing Textron Inc's aviation business in China including the Cessna brand, it was a rational choice to team up with a well-connected partner like CAIGA, China Aviation Industry Co's (AVIC) general aviation company.

"In most airplane transactions today, there is always a local connection even when we are selling to entrepreneurs," Schultz told Reuters at the Shanghai industry event. "It's important for us to have a partner like CAIGA, which has sound relationships and can now introduce our products, our joint ventures to them."

In November 2012, Textron's Cessna agreed to establish two joint ventures with CAIGA to make Caravan utility turboprops and Citation XLS+ business jets. At the Shanghai showcase, Cessna displayed its first China-built Caravan, bought fresh off the assembly line by an AVIC subsidiary.

Brazil's Embraer SA also agreed in 2012 to start assembling its Legacy 650 business jet at Harbin Embraer, another JV with AVIC in northeast China.

Meanwhile Pilatus Aircraft Ltd's jointly owned plant in Chongqing opened for business on Aug. 5 last year - and on the same reported it received an order for 50 PC-12 and PC-6 aircraft. "We believe that a partnership with a local sales partner is the key to success," said Pilatus CEO Markus Bucher.

Leaving on a jet plane	Private plane business taking flight