Jump to content

CRRC

From Alfawiki
CRRC Corporation Limited
Company typePublic, state-owned enterprise
IndustryRolling stock manufacturing
FoundedJune 1, 2015; 11 years ago (2015-06-01)
Headquarters
China
Area served
Worldwide
ProductsRolling stock, locomotives, metro cars, freight wagons
OwnerCRRC Group (majority), State Council via China Securities Finance and Central Huijin Investment, BlackRock (minority)
Number of employees
183,061 (2016)
ParentCRRC Group

CRRC Corporation Limited (CRRC) is a Chinese state-owned enterprise and publicly listed manufacturer of rolling stock, holding the distinction as the largest worldwide by revenue, outpacing rivals such as Alstom and Siemens.

Formed on 1 June 2015 through the consolidation of CNR and CSR, CRRC had a workforce of 183,061 employees as of 2016. Its parent organization, CRRC Group, operates as a state-owned entity under the supervision of the State-owned Assets Supervision and Administration Commission of the State Council. Additional equity stakes are maintained by the State Council via institutions including China Securities Finance and Central Huijin Investment.

Merger

The origins of CNR Group and CSR Group trace back to the former China National Railway Locomotive & Rolling Stock Industry Corporation (LORIC), which was divided in 2002. By late 2014, these two groups consented to merge, subject to approval from Chinese authorities. According to the agreement, CNR Group would officially absorb CSR Group, with the unified entity renamed CRRC Group and its publicly traded subsidiary designated as CRRC Corporation Limited. This merger was intended to enhance operational efficiency and bolster global competitiveness.

The merger became effective on 1 June 2015, with shareholders exchanging one CNR share for 1.1 CSR shares. The newly formed company emerged as the world’s largest manufacturer of railway rolling stock, commanding more than 90% of China’s market share, employing approximately 175,700 personnel, and possessing share capital valued at .

Overseas expansion

Following the merger, CRRC intensified its international growth efforts. In October 2014, it secured a US$556.6 million contract to deliver 284 metro cars (later increased to 404) for Boston's MBTA Red and Orange Lines. Subsequently, CRRC initiated construction of an assembly facility in Springfield, Massachusetts in September 2015, with production commencing by April 2018.

In mid-2015, CRRC launched its first overseas rolling stock manufacturing plant in Batu Gajah, Malaysia, functioning as an extension of CRRC Zhuzhou Locomotive. Additionally, it acquired Argentina’s Emprendimientos Ferroviarios in 2014 to commence local production and maintenance activities supporting export operations. Argentina has served as a major client, procuring hundreds of EMU cars, locomotives, and freight wagons over time; a further order for 200 EMUs was placed in 2017.

The company also established the Vertex Railcar joint venture in mid-2015 alongside Hong Kong-based private equity firm Majestic Legend Holdings to manufacture freight wagons at a Wilmington, North Carolina site. Despite concerns from US lawmakers regarding Chinese government subsidies and national security implications, an investigation by the Treasury Department cleared this partnership by late 2016.

By the end of 2015, CRRC set a goal to double its international sales within five years focusing on North American passenger rail markets. Interim financial reports indicated overseas revenue growth exceeding 60%, with half-year figures reaching , generating gross profit of , including from non-rail sectors such as automotive equipment and power generators.

In March 2016, CRRC Qingdao Sifang won a US$632 million contract (with options potentially increasing it to US$1.3 billion) to supply up to 846 railcars for Chicago Transit Authority (CTA). This contract led to plans for a US$40 million assembly plant in Chicago.

In March 2017, CRRC MA located in Quincy, Massachusetts secured a SEPTA contract for 45 bi-level rail cars with options for additional units; these were manufactured at Springfield utilizing shells sourced from Tangshan. This award was granted over competitors Hyundai Rotem and Bombardier.

Later that same month, CRRC received an order for 64 HR4000 cars from Los Angeles County Metropolitan Transportation Authority (LACMTA), with options extending up to 282 cars total. This contract resulted in plans for an assembly facility in Los Angeles dedicated to propulsion systems and HVAC installation.

However, deliveries of MBTA Red and Orange Line vehicles encountered significant delays accompanied by quality control issues such as electrical malfunctions and braking system failures. The company attributed these setbacks primarily to supply chain disruptions caused by COVID-19 but faced criticism from MBTA officials regarding repeated failures and inadequate quality oversight. Reports from workers highlighted disorganized assembly operations and payment difficulties that impacted parts availability from suppliers.

By 2023, CRRC had obtained roughly US$214 million in government subsidies. In April 2024, SEPTA canceled its bi-level railcar order after investing $50 million due to ongoing delays and substandard build quality; the transit authority is exploring avenues for financial recovery while CRRC reaffirmed its commitment to fulfilling the project.

Allegations of Bribery in South Africa

In June 2016, CSR Corporation Limited, a predecessor of CRRC, became involved in bribery claims linked to a 2012 tender valued at US$6 billion for supplying 600 locomotives to the state-owned Passenger Rail Agency of South Africa (PRASA). Reports connected Busisiwe Mkhwebane, who later became South Africa's Public Protector, to this transaction during her assignment at the South African embassy in China. By 2020, payments related to a revised contract for locomotives manufactured by CSR—now operating under CRRC—were frozen by the South African Revenue Service due to suspected corruption involving affiliates of the Gupta family.

Sanctions Imposed by the United States

The United States Department of Defense has accused CRRC of providing equipment to the People's Liberation Army. In November 2020, then-President Donald Trump issued an executive order barring U.S. individuals and companies from holding shares in entities connected with the Chinese military, including CRRC.

In October 2022, CRRC was designated by the U.S. Department of Defense as one of the "Chinese military companies" active within the United States.

European Union Inquiry

In February 2024, the European Union initiated an investigation into CRRC over allegations that it utilized government subsidies to offer prices below those of European competitors.

Ownership Structure

As of December 31, 2016, CRRC's majority ownership was held by CRRC Group through direct and indirect holdings (via CRRC Financial and Securities Investment), controlling 55.91% of A shares. Additional stakes were held by other state-owned entities such as China Securities Finance (2.87%) and Central Huijin Investment (1.12%). BlackRock owned 6.13% of H shares, representing 0.98% of total share capital, while Himalaya Capital, a mutual fund based in Seattle, also held approximately 6.13% of H shares. Remaining shareholders each possessed less than 1% of overall share capital.

CRRC Operations in the United States

CRRC maintains two operational divisions within the United States:

  • CRRC Massachusetts – catering to markets in Boston and Los Angeles
  • CRRC Sifang America – concentrating on the Chicago area

Locomotive Manufacturers

Rolling Stock Producers

Combined Locomotive and Rolling Stock

Additional Affiliates

Joint Venture

International Presence

Additional Investments

On 8 January 2016, CRRC purchased a 13.06% equity interest in China United Insurance Holding from the China Insurance Security Fund. Furthermore, it jointly holds ownership of Zhuzhou Times New Material Technology together with its parent entity, CRRC Group.

In November 2016, through CRRC Zhuzhou Locomotive, the company declared intentions to acquire Škoda Transportation, based in the Czech Republic; nonetheless, this transaction was not completed.

On 1 March 2024, CRRC acquired a 40% share in partnership with Grupo Comporte, which holds 60%, for the Trens Intercidades initiative. This project aims to supply 22 inter-city train sets operating between Luz Station and Campinas, with service anticipated to commence around 2030.

See also

External links

Retrieved from "https://www.alfawiki.org/index.php?title=CRRC&oldid=45062"