Vossloh DE18 locomotive, source: Vossloh

CRRC acquires first locomotive manufacturer in Europe

After almost nine months of talking and approving, Germany-based Vossloh Group has finally sold its locomotive business to CRRC Zhuzhou Locomotive, a subsidiary of China Railway Rolling Stock Corporation (CRRC). The deal comes into effect starting from 31 May 2020.

Vossloh Group announced its intention to sell its own locomotive business unit at the end of August 2019. In April of this year, German competition regulator Federal Cartel Office (Bundeskartellamt) approved the sale of Vossloh’s subsidiary in spite of widespread criticism from the European rolling stock suppliers. The German authority did not detect any possible violations of competitiveness in the deal.

Milestone for CRRC

For Chinese manufacturer CRRC, the acquisition of the Vossloh Locomotives is a milestone in its expansion in the European rail market. “I am delighted that in CRRC ZELC we have found a strong, reliable and above all long-term buyer for our former Locomotives unit. We are convinced that the future prospects of Locomotives will improve significantly with CRRC ZELC as a new owner,” Oliver Schuster, CEO of Vossloh Group, noted.

Infrastructure first

As for the German holding, this agreement also sets a critical point in its history. In recent years, Vossloh Group has been divesting its non-infrastructure subsidiaries. Vossloh Rail Vehicles, Spain-based locomotive manufacturer, was sold to Stadler Rail in 2015. Currently, it is known as Stadler Valencia.

Two years ago the German group divested another business unit – Vossloh Electrical Systems (or Vossloh Kiepe) that was responsible for producing electrical traction equipment and HVAC systems for trams, trolleybuses, rail transport vehicles. Now, it is a part of Knorr-Bremse. “From now on, Vossloh’s focus will be entirely on rail infrastructure products and services,” Mr Schuster summed up.

European criticism

The agreement between CRRC and Vossloh Group has already caused criticism of the European companies. Thus, the Association of the European Rail Industry (UNIFE) warned the European authorities that the deal would open the EU rail market for the Chinese giant. As a result, it could be a significant challenge for the European rolling stock manufacturers as the Chinese company has strong state support. Meanwhile, the Chinese government, in its turn, implemented many restrictions for foreign suppliers. That’s why UNIFE called for excluding the Chinese suppliers from the European procurements.

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Author: Mykola Zasiadko

Mykola Zasiadko is editor of online trade magazines RailTech.com and RailFreight.com.

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