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China trainmaker eyes US growth after US$1.3b Chicago bid
[NEW YORK] CRRC Corp, China's only maker of high-speed locomotives, said it's interested in investing in more US cities after winning a US$1.3 billion rail-car contract from Chicago's transport authorities.
The company is bidding for a subway project in Los Angeles and a double-deck train contract in Philadelphia, CRRC Vice-President Yu Weiping said in an interview in Manhattan on Monday, without providing details. It also is looking for work in New York, according to Mr Yu, who has visited the city six times over the past year.
"Time and time again, you ask me whether I love you, yes I do," said Mr Yu, citing a Chinese pop song on his interests in New York.
"I think this is a very good market for us in terms of rail transport and equipment. It is the most dynamic center in the world."
Mr Yu's comments came after the Chicago Transport Authority last month ordered 846 rail cars from a unit of CRRC, its second US deal in 18 months. The Chinese government combined former trainmakers CSR Corp and China CNR Corp last year, forming CRRC to better compete with Germany's Siemens AG and France's Alstom SA.
China, home to the world's biggest high-speed rail network, has identified the sector as one of 10 focus industries in a blueprint for economic development.
A US$567 million Boston deal that CNR won before the merger in 2014 was China's first major rail contract in North America. Its proposal was 50 per cent cheaper than Bombardier Inc's bid.
While CRRC is still committed to double its overseas sales to as much as US$15 billion by 2020, it's also feeling the headwinds as the global economy weakens, Mr Yu said.
"The world's rail-transport market is not as hot as in the past years, just like the global economy," said Mr Yu. "Infrastructure construction needs money. The general demand is falling."
CRRC, which has 170,000 employees, will focus on the US this year while it's also interested in Europe and other markets, Mr Yu said.
The stock rose 0.8 per cent to close at HK$7.74 in Hong Kong Monday, reducing this year's decline to 19 per cent. The shares have lost three-fifths of their value since touching a record-high in April 2015.
Premier Li Keqiang is leading the nation's overseas push by train equipment makers as part of the government's broader strategy to turn China into an advanced industrial nation.
They have targeted emerging markets in Africa, Latin America and Southeast Asia for rail-related orders, while also bidding for high-profile contracts in the developed world.
China won the rights to build a US$5.5 billion railway line in Indonesia in October last year, beating out Japan for the link from Jakarta to Bandung.
A China Railway Group-led consortium and XpressWest Enterprises LLC is forming a joint venture to build a high-speed railway linking Las Vegas and Los Angeles, the first Chinese-made bullet-train project in the US