Low cost Chinese drones steadily chipping away at U.S. and Israeli military dominance in military drones market

Although Chinese military drones look suspiciously similar to U.S. and Israeli ones, drone makers are confident that customers will continue to prefer a reliable strike platform rather than a cheap unreliable ones.

A predicted rise in demand for military drones from regions in Asia, the military drone market is gradually leaning towards Chinese drone makers who are steadily chipping away at U.S. and Israeli dominance in the industry.

Already low cost versions of the U.S. armed drones, including the MQ-9 Reaper have begun showing up in Central Asian countries, Africa and in the Middle East, signaling growing Chinese ambition to corner market share from incumbents including Israel Aerospace Industries and General Atomics Aeronautical Systems.

At the Singapore Airshow 2018, Chinese state contractor China National Aero-Technology Import & Export Corporation (CATIC) showcased two versions of its strike unmanned aerial system (UAS) and Wing Loong reconnaissance, marking the drone’s first first public appearance in Southeast Asia.

While the Chinese drones cost around $5 million, U.S. made one cost up to $100 million, making them a lot more attractive to less affluent militaries, said Ben Moores, a senior analyst for defense and aviation at Jane’s by IHS Markit.

“The factors are moving in China’s favor on a daily basis,” said Moores, who went on to add, these Chinese offerings are also more attractive to countries who have less than cordial relationships with Israel and the United States.

Case in point: “Global customers are very put off by (U.S. President Donald) Trump. Even though he is removing restrictions, any customer is going to think twice about buying American equipment because if you buy it and he decides he doesn’t like you for any reason, he cuts off your spares and you can’t run your platform,” said Moores.

In February 2017, Xinhua, China’s state news agency had stated Beijing’s own military drones had won their largest ever order from overseas from an undisclosed buyer.

Although the development is yet another boost to China’s growing exports, Moores was quick to caution that often there is a disconnect between what China says it has sold and what has actually changed hands.

“We’ve not seen any developed leading military get anywhere near to buying Chinese UAVs,” said Moores.

According to analysts, China has yet to take away any business from Israli and U.S. drone manufacturers and has so far sold to customers who cannot afford the U.S and Israeli markups.

However, western manufacturers, at the Singapore Airshow 2018 have acknowledged the growing presence of their Chinese peers. So far, they remain confident in their clients not going over to the Chinese since customers prefer quality over cheaper less reliable alternatives.

“At the end of the day anybody can make an airplane. What’s important is what do you do with that platform?,” said Joseph Song, vice president for international strategic development at General Atomics Aeronautical Systems, the maker of the MQ-9 Reaper.

He went on to add, “We’ve flown 5 million hours on this airplane (the MQ-9). That’s more than all the UAVs combined in the world.”

In a similar vein, Israel’s Aeronautics stated its track record goes back forty years, with 70 clients across 55 countries; unlike cheap Chinese drones, its drones have gone through and have been tested in many development cycles and have proven themselves in combat.

“You cannot shortcut 40 years to five years,” said Dany Eshchar, Aeronautic’s deputy chief executive for marketing and sales.

“I believe that the customer appreciates good product and is willing to pay a little more. When you buy Chinese for now, you pay less, you get less. Less by reliability, less by safety,” said Eshchar.

However, these drone makers are not complacent and arent sitting back.

“But are not sitting quiet for even one second. We’re always thinking about the next technology and the next generation… to see how we can improve the system,” said Eli Alfassi, executive VP of marketing at Israel Aerospace Industries, Israel’s largest defense contractor.

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