Pay one, take two!

Jason Busch wrote an interesting post on Airbus’s sourcing strategy in China.

EADS, which buys products for around USD 60M from Chinese companies and expects to double this amount by 2010, has opened a strategic sourcing office in Bejing recently.

Two main reasons may explain such a decision:

1) The more intuitive one, claimed by Jason, may let us believe that Airbus – like it may happen quite often in the A&D sector – is playing the political game, i.e. creating contacts with local companies to increase orders from national airlines and the Chinese army. I think that this point is quite relevant considering the early stage of Airbus’s presence in China.

But if sourcing in China may represent a short-term driver to sales increases, for me there is another, perhaps even more obvious, explanation for Airbus’s decision.

2) Opening sourcing offices in strategic geographical regions is more than increasing sales. Sourcing is, before all, to gather detailed knowledge about the local supplier base in order to create durable partnerships and become a preferred contractor on a long run.
If today Airbus’s strategy might appear as a purely political action, in a near future, Airbus will produce in China and established supplier partnerships will become a clear advantage in favour of the European company.