Growing Role of Emerging Markets in Aerospace Electronics
We cannot conclude from the recent events in the aerospace industry that it has gone any far in terms of globalization efforts. It has been discovered that involving suppliers from around the world in developing a new aircraft creates complex situations like bad management, poor coordination and challenges in design integration. Nonetheless, it has been indicated that the globalization for aerospace electronics still remain in its infancy.
India, China and Russia are expected to emerge as significant players in the next two decades, which will give the Western companies major short-term cost-reduction opportunities that they must capture. However, these changes will promote the emergence of some new players, which can be trusted on longer-term, representing a novel form of competition for incumbents today. In addition, specialization in design, manufacturing and Spacecraft electronics & Space electronics Programs will exist between both the suppliers and existing original equipment manufacturers, in the areas where they can add a unique value or a competitive cost advantage.
The scenario on which the future of aerospace industry is bases depends on the current capabilities of the suppliers in developed countries and the circumstances on which the aerospace industry thrives and struggle. A roadmap is formed for aerospace OEMs and suppliers in both the developed and developing markets, which seek to navigate the changes further.
Today, the demand for aerospace is emerging in the developing nations like India and China, which are expected to manufacture some higher value components in future and also emerge as assemblers of aircraft. Currently, these nations have become a major attraction for aircraft manufacturing due to their lower labor costs. Even after accounting for transportation and reducing the complexity of coordinating with management and supply chains, the cost of Advanced Manufacturing Technologies can be lowered to 20 to 25 percent in these emerging markets in comparison to the more developed markets.
However, despite of the cost advantages in the emerging markets for aerospace industry, it’s globalization has been relatively slow. In fact, only 3% of the output of this industry originates in these areas. Several attributes of the aerospace electronics have caused the OEMs to limit their involvemen