German Locomotive Takeover Gives China Cheap Route Into Europe

Aug. 28, 2019
China Railway Rolling Stock Corp. now controls a supplier of more than one in four European diesel locomotives.

China’s world-leading train maker CRRC has gained control of one-quarter of the European diesel-locomotive market in a single purchase costing less than 10 million euros ($11 million).

The acquisition of the Vossloh AG business, announced Monday, provides China Railway Rolling Stock Corp. with a major toehold in a region where rail travel is ousting cars and planes faster than anywhere else.

CRRC’s Zhuzhou Locomotive will take over a Vossloh factory in Kiel, Germany, that employs 500 people and has supplied 25% of the European diesel market over the past five years, according to research from SCI Verkehr.

Though a focus on traditional switcher locos used in freight yards has rendered the site unprofitable in a world of changing logistical flows and increasing hostility to carbon emissions, CRRC should have the financial and technological clout to oversee its transformation, SCI said.

“The plant has to reinvent itself in order to find and expand its place in the future landscape of rail vehicle manufacturers,” SCI’s Maria Leenen said, adding that a European purchase was “rather overdue” for the Chinese giant.

CRRC became the No. 1 rolling-stock manufacturer through a merger of China’s northern and southern train makers in 2015, the same year that Vossloh sold its Spanish loco unit, a maker of more modern diesel trains for mainline operations, to Stadler Rail AG.

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Licensed content from Bloomberg, copyright 2016.

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