Rolls-Royce Expands Presence in China's Aviation Market

Strategic Insights -

Rolls-Royce has made a significant stride in its Asian strategy by expanding its presence in China's rapidly growing aviation market. According to Rolls-Royce CEO Sir John Rose, the company's order book now represents the Asian market at about 30% of its total, a fourfold increase over the last five years. This growth is largely driven by China, and Rolls-Royce officials were on hand for the arrival of Rolls-Royce-powered Airbus A330s as they were delivered to Air China. In an interview with CNBC's Cheng Lei, Rose discussed the company's strategy and its plans for further expansion in the region.

Key Takeaways:

  • Rolls-Royce's order book now represents the Asian market at about 30% of its total, a fourfold increase over the last five years.
  • China is a major driver of this growth, with Rolls-Royce officials on hand for the arrival of Rolls-Royce-powered Airbus A330s at Air China.
  • Rolls-Royce CEO Sir John Rose stated that the company's business is evenly spread across different markets, including civil original equipment, services, and defense, energy, and marine.
  • 70% of engine components are sourced from the supply chain, and Rolls-Royce is doing an increasing amount of procurement in China.
  • Rolls-Royce may consider setting up more plants in China or assembling engines in the region in the future.

Statistics:

  • Rolls-Royce's order book now represents the Asian market at about 30% of its total.
  • This is a fourfold increase over the last five years.
  • 70% of engine components are sourced from the supply chain.
  • Rolls-Royce's business is split into 30% civil original equipment, 50% services, and 20% other markets.

Sources:

  • CNBC/DOW JONES BUSINESS VIDEO
  • Rolls-Royce CEO Sir John Rose
  • CNBC's Cheng Lei