CRRC, the Chinese state owned company that is the world’s largest train maker, is set to gain a key foothold in Europe by acquiring its first locomotive factory on the continent through a deal with German manufacturer Vossloh.
The deal comes as CRRC is under pressure in the US where it has opened two factories and won contracts to supply train cars for transit systems in several major American cities. Both houses of Congress have passed measures that would bar the use of federal funds to buy Chinese rail cars and buses out of concern they could be utilized for Chinese espionage or sabotage. It is not yet clear if the final version of the bill to which the ban has been attached will ultimately include it.
Vossloh announced Monday, September 2, that it would sell a locomotive factory it opened last year to CRRC Zhuzhou Locomotive, a subsidiary of Hong Kong-listed CRRC. The German company, which is narrowing its focus to railway infrastructure equipment, stated it expected to initially receive a figure in the “low single-digit millions of euros,” and another €10 million (US$11 million) in follow-on transactions, under its agreement with CRRC Zhuzhou.