Rail giant CRRC to trim freight car manufacturing

Rail giant CRRC to trim freight car manufacturing

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CRRC Corp., China's top state-owned rail equipment maker, plans to reshuffle its struggling freight-car production businesses in a bid to eliminate excess capacity as part of a corporate restructuring. Sources close to the company told Caixin that CRRC has worked out a plan to consolidate its 10 freight-car manufacturing subsidiaries, reducing overcapacity and optimizing resource allocation. CRRC will consolidate most of the freight-car production in its two strongest subsidiaries, CRRC Qiqihar Rolling Stock Co. and CRRC Yangtze Co., sources from CRRC said. Those units plus four other manufacturers have total capacity to produce 100,000 rail cargo vehicles every year. CRRC controls about 80% of the freight-car market in terms of orders. The business overhaul comes as CRRC suffers sliding freight-car sales reflecting weakening demand for railway cargo transportation amid the economic slowdown. Public data showed that from 2012 to 2016, the number of cargo vehicles ordered by China Railway Corp., the state railway operation, declined from 40,000 units to 6,000.