Embraer remains committed to its Harbin joint venture to assemble the Legacy 650 business jet, despite a challenging tax regime for the venture and a tightening market.
Speaking to journalists as the Asian Business Aviation Conference & Exhibition (ABACE) gathering in Shanghai, president of Embraer China Guan Dongyuan says that the Brazilian airframer remains confident that China will eventually ease duties on imported aircraft components.
“There is a 3-8% duty on imported components, but we trust that the Chinese government will change these rules,” says Guan. “How can Chinese companies produce aircraft locally if they have this situation?”
He adds that the company “has no plan B” for Harbin Embraer Aircraft Industry (HEAI) - a joint venture between Embraer and Harbin's parent company, Aviation Industry Corporation of China (AVIC).
The line formerly made EMB-145 regional jets, upon which the Legacy 650 is based. In June 2012 Embraer and Harbin agreed to transition the line to private jet production.
So far, the factory has delivered two Legacy 650s to customers, and will complete a third example in May.
Embraer has a strong presence at this year’s show with three aircraft on static display. This includes the debut of the Legacy 500 in China. Other Embraer business jets appearing at the show are the Lineage 1000E and Legacy 650.
Despite Guan’s optimism about the Harbin assembly line, which he says offers competitive advantages over foreign built aircraft, industry sources have questioned its viability owing to relatively low production rates and softening demand for business jets in China after years of rampant growth.
Source: Flight International
