When Peter Spuhler, CEO and Chairman of the Board of Directors of Stadler Rail, last sold trains to the private Austrian Westbahn in 2019, he had to come up with something: Spuhler bought the fifteen double-decker trains through a company he set up privately and then leased them the western railway. This year the trains are to be put into operation and bahn reiseauskunft. This financing was part of an offer with which the Swiss railway manufacturer managed to outperform the world’s largest competitor: As Stadler expressly stated in the press release at the time, the Chinese CRRC drew the short straw.
It is actually surprising that CRRC was involved in the process at all. In contrast to Stadler, a specialist for tailor-made solutions and small to medium-sized orders, the Chinese company often touches it with a really big ladle. Instead of fifteen train compositions, it could well be about two hundred to three hundred. However, the state-controlled company is set to expand outside of China and apparently smaller orders are also welcome on the way to more market share. In fact, after the defeat by Stadler Rail, CRRC was satisfied with a significantly smaller piece of the Westbahn business. Like the «St. Galler Tagblatt »wrote this week, after signing the contract with Stadler, the Westbahn ordered another four trains, but this time from CRRC. A spokeswoman for CRRC confirmed this at the request of “Finanz und Wirtschaft” and wrote: “The approval for the Chinese trains is currently expected for summer/autumn 2023. From then on, we will rent them for the use of CRRC. ”
The fact that CRRC is willing to rent out the trains instead of selling them is another indication of how important it is to the company to enter the market. While the quality of the trains can keep up with that of European competitors, the company has long struggled to master the complicated local approval procedures. The Chinese trains, which are also manufactured in China, are a “strategic extension” to the existing fleet of Stadler trains, the Westbahn said. As St. Galler Tagblatt also wrote, the additional rolling stock could serve to expand the route network to Hungary. In addition, the Westbahn, which is chaired by the former SBB boss Benedikt Weibel, is considering an additional express train route from Vienna via Munich to Bregenz. So far, the company has only competed with the Austrian Federal Railways between Salzburg and Vienna.
Long term pressure
Even if the threat is not yet immediate: The success of the Chinese with a customer who had previously ordered three times from Stadler Rail shows that competition is getting tougher. The Swiss train builder’s larger European competitors have already reacted. The German Siemens and the French Alstom sought a merger, but this was prohibited by the European Commission in early 2019. Instead, Alstom took over Canadian Bombardier Transportation. After a long wait, this takeover was approved at the beginning of this year. By becoming heavyweights themselves, the Europeans want to stand up to the Chinese. For Stadler Rail, which has remained smaller, CRRC is – yet – not an acute threat. However, the more the competition accommodates customers when it comes to financing, the more often Spuhler will have to step into the breach in order to secure long-term growth. So far, he has done this four times, as Stadler spokesman Fabian Vettori told FuW. There is therefore no sign of euphoria in the stocks, and the “hold” recommendation remains justified.