Boeing has rolled out the first 737 jet from its new China production factory. According to Fortune, the aerospace manufacturing giant delivered a 737 MAX from its Zhoushan factory last Saturday, signaling the beginning of a new untapped market for Boeing. While Boeing has only produced one 737 MAX jet at its Chinese factory, it’s expected to produce dozens more in the months to follow.
On Dec. 14, Boeing held an official inauguration ceremony for its new Chinese factory. Located in Zhoushan, China, the new factory is just 90 miles away from Shanghai, making it a convenient location for the aerospace company. But Boeing wasn’t alone in its decision to open a production factory in China. It was actually a joint project performed in collaboration with the country’s Commercial Aircraft Corp. of China (COMCAC). Boeing says that it’s aiming to produce and deliver more than 100 737 jets per year from its new Chinese factory.
Of course, building the new Chinese factory wasn’t cheap. Boeing is believed to have invested more than $33 million in the project. Considering the increased market presence it offers, however, it was probably a wise investment. Boeing is currently on track to earn more than $100 billion in gross revenue for 2018. If it meets this goal, this would be Boeing’s first $100 billion year.
Boeing won’t perform all of its jet-building activities at the new Chinese factory, however. Exterior panels will still be produced at the company’s Seattle-based factory, after which they’ll be shipped to Boeing’s new Chinese factory.
According to COMCAC’s Zhao Yuerang, the new factory shows that Boeing is expanding its presence in China’s ever-growing aviation market. “This is a significant milestone of Boeing’s efforts to deepen its footprint in China, as well as to support the growth of China’s airline industry, opening an era of the collaboration,” said Zhao Yuerang, president of COMAC, in an interview with CNN.
When looking at the numbers, it’s easy to see why Boeing decided to build a production factory in China. Reports show that China will need more than 7,600 jets over the next two decades to accommodate for an increasing number of air travelers. Airbus already has a strong presence in China. But now that Boeing is here, China will have an alternative aerospace company from which to purchase new jets.
Over the past five years, China has ordered some 160 737 jets from various aerospace manufacturing companies, including Boeing. With Boeing’s new Zhoushan-based factory up and running, China will likely remain one of the top buyers of the 737.
