China will continue to increase its market share in the traditional railway manufacturing sector by pushing more low-cost, high-speed trains, metro trains and related infrastructure into global markets, experts said on Sept 25.
Their comments came after French train maker Alstom Group and German engineering group Siemens AG said on Sept 22 they were in talks about a tie-up of their rail activities as European companies struggle to cope with competition from China.
Rail mergers have become a trend over the last few years, as producers seek to contain costs in an effort to compete with China Railway Rolling Stock Corp, the country’s railway vehicle manufacturer.
The French government said it approved of a tie-up between the rail businesses, which have combined sales of nearly 15 billion euros ($6 billion), as long as jobs were not affected.
The French government took control of a 20 percent voting stake in Alstom as part of a 2014 deal that saw the group sell its energy division to General Electric, snubbing Siemens at the time.
Feng Hao, a railway development researcher at the National Development and Reform Commission, said China is eager to compete with established global rivals, and has been deploying more resources into its rail vehicle manufacturing sector as a part of its “Made in China 2025” initiative to stimulate high end product exports.
CRRC plans to establish 11 regional branches globally by 2020 and further target key markets including Europe, North America, Russia and Central Asian countries.
CRRC has so far promoted a number of products in both the domestic and global markets. These include high-speed trains that can run at 350 kilometers-per-hour, middle-to-low speed magnetic levitation shuttles, high-speed commuter trains running at a maximum speed of 140 kph, piggyback wagons, hydrogen-powered tram cars, and oil-electricity hybrid locomotives.
Alstom and Siemens confirmed talks were underway after the close of trading in European markets on Sept 22.
“It is not something unusual to see certain Western industrial giants reorganize their business with each other, especially under the current global business setting,” said Zhao Ying, a researcher at the institute of industrial economics of the Chinese Academy of Social Sciences in Beijing.