Hitachi Targets Southeast Asia Rail Market with US$1.6bn Acquisition

• Sommana Yan
• 30 June 2024
• Uncategorized
• 3878 Views

Hitachi aims to expand its presence in Southeast Asia’s railway market following its US$1.6 billion acquisition of Thales Group’s rail signal business on 31 May 2024, as China remains a dominant infrastructure supplier. This move enhances Hitachi’s ability to provide integrated railway solutions in Singapore and Malaysia. The announcement was made during a media roundtable on 5 June 2024.

Hitachi, renowned for Japan’s shinkansen bullet trains, has strategically expanded its global footprint through acquisitions, including Italy’s AnsaldoBreda and STS in 2015, and now Thales’ signal business. Giuseppe Marino, CEO of Hitachi Rail, emphasised, “We can offer a very integrated system that is connected. Some customers want to buy a full ‘key-ready’ system,” highlighting the company’s comprehensive offerings from rolling stock to digital services.

The acquisition of Thales’ Global Transport and Security (GTS) unit extends Hitachi’s market reach to France, Germany, and Canada, and notably strengthens its footprint in Asia, including Singapore and Malaysia. “Our Asia-Pacific footprint, after the integration [of GTS], is very, very strong,” Marino stated. This integration adds approximately 160 employees in Singapore and Malaysia, reinforcing their strategic importance.

GTS’s formation through mergers of French, German, and Canadian companies positions Hitachi amid ongoing rail industry consolidation. China’s CRRC, formed by merging two major train manufacturers, and Alstom’s acquisition of Bombardier’s rail unit exemplify this trend. Hitachi faces competition from CRRC, especially in Southeast Asia, where China has developed high-speed rail projects in Indonesia and is constructing another in Thailand. CRRC is also vying for the Kuala Lumpur-Singapore high-speed rail link, a project with no Japanese bids yet.

Marino also expressed interest in the burgeoning Indian market, where Prime Minister Narendra Modi is advancing a high-speed rail project linking Mumbai and Ahmedabad. “Of course, we have an ambition to bring Japanese technology, shinkansen, to India,” Marino noted, indicating ongoing negotiations.

In Europe, Hitachi is keen to penetrate Germany, the continent’s largest rail market. “We have no rolling stock in Germany right now. … Our ambition now, having a presence in Germany, is to put forward a proposal for our trains,” Marino said, outlining Hitachi’s strategic objectives.

By leveraging these acquisitions, Hitachi aims to fortify its position in the competitive global rail industry, delivering integrated solutions and expanding into key markets worldwide.

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