Chinese Manufacturer CRRC Wins Subway Train Orders From Los Angeles Amid US Presence Expansion

Yicai

2017-03-28

(Yicai Global) March 28 -- Chinese manufacturer CRRC Corp. [SHA:601766] has secured subway train orders from Los Angeles, further expanding its US presence after it set up branches and factories in the States and won contracts from Boston and Chicago.

CRRC has signed an agreement with the Los Angeles County Metropolitan Transportation Authority to build 64 subway cars for the city as part of a USD647 million order, CBS Los Angeles reported on March 23.

LA’s metro cars are old and have served for more than 25 years on average. The 30 HR400 trains included in the new order will be used to replace existing cars on the city’s Red and Purple lines, which go through downtown Los Angeles, Mid-Wilshire District and North Hollywood.

Some 34 of the new cars will be used for the Purple Line’s four-kilometer extension from the Mid-Wilshire District to Beverly Hills when the line officially opens in 2023.

CRRC is expected to deliver the first pilot train by the spring of 2020 and all 64 cars by September 2021. The LACMTA may also buy another 218 subway cars, reports said.

CRRC's contract with the LACMTA will create 50 local jobs and generate USD38 million in economic benefit. CRRC will also buy a new facility in the LA area to manufacture key components for propulsion, heating, ventilation, air conditioning and lighting systems. The metro trains’ exterior shells will be manufactured in the company’s plant in Changchun, China, while final assembly will be carried out in Springfield, Massachusetts.

That contract term satisfies the US federal government’s rules that requires 60 percent of vehicle parts be made in America. “We need qualified, experienced and prepared companies to help us run our growing transportation system,” Phillip Washington, chief executive of the LACMTA said. “This new partnership will create a path for those who want a job maintaining subway cars in the future.”

CRRC set up a plant in Springfield to manufacture vehicles for the Boston Metro in 2015. The plant is scheduled for completion this year and the first cars are expected to be delivered to Boston Metro in 2018, China Daily US reported. In October 2014, the Massachusetts Department of Transportation approved the purchase of 284 new subway cars from China CNR Corp., which later merged with CSR Corp. into CRRC, to be used for Boston's Red Line and Orange Line trains as part of a USD566 million contract. CRRC started to promote its brand in the US market in the second half of 2015.

CRRC Qingdao Sifang Co. kicked off construction of its plant in Chicago, US on March 16, which will be used to manufacture 846 subway cars for Chicago in a USD1.3 billion contract awarded to the company last March.

The Southeastern Pennsylvania Transportation Authority plans to order 45 new rail cars to help alleviate traffic congestion and improve services, Philly.com, a news outlet based in Philadelphia, PA, reported on March 21. The contract will likely be awarded to CRRC MA.

The SEPTA may recommend giving the order to CRRC MA, a CRRC branch, for its standard-meeting technologies and lower prices, a SEPTA spokesperson said.

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