BEIJING: A draft plan is in the works from two largest Chinese state-owned train makers CSR Corp and China CNR Corp to create a new mega-company to compete in overseas markets with German, Canadian, and Japanese locomotive makers.
Sources said that merger would be aimed at reducing overseas competition as two companies have a market value of $26 billion.
As China is home to the world’s largest high-speed rail network, which keeps the growing population and economy connected. The two companies have won contracts worth over $7.2 billion (44.3 billion yuan) for 258 bullet trains within China, Bloomberg News reported.
The two are currently competing for a $68 billion project to supply bullet trains in California in the US. The 1,287 km track will run from Los Angeles to San Francisco and will require 95 trains.
Last week CNR announced it had won a $537 million (3.49 billion yuan) contract to supply 284 cars for Boston’s metro, a first for any Chinese company in the US. CNR proposed the cheapest deal, which was almost half the tender price of Canadian transport giant Bombardier.
Both deals are milestones for the China rail industry, which is for the first time selling its rolling stock abroad and competing with the likes of Germany’s Siemens, Canada’s Bombardier, and Japan’s Kawasaki.
