Bombardier China venture wins second high-speed train carriage contract despite diplomatic tensions

Bombardier’s shares were down today as it announced it is to supply high-speed train cars to China’s state-owned railway company for $453m (£358.6m) as part of a joint venture (JV).

The Canadian manufacturer’s 20-year-old Chinese JV, Bombardier Sifang (Qingdao) Transportation (BST), today said China Railway Corp (CRC) had awarded it the contract to supply 168 cars which will travel at speeds of up to 350 kph.

The win is BST’s second this year in the growing Chinese high-speed rail market, after agreeing to supply 120 of the same cars in September for $324m.

It said the timely delivery of the first batch of carriages had “earned the industry’s trust”, leading to the second order.

Jianwei Zhang, president of Bombardier in China, said, “This repeat order comes just three months after the previous, clearly demonstrating the pace of development in the Chinese high-speed rail market as well as the trust that CRC has placed in our products and performance.

“We are confident that our ability to consistently meet our customers’ quality, quantity, timing and cost requirements, in combination with our focus on long-term sustainable success in China, has been key to our achievements in this fiercely-competitive market.”

Bombardier in China has six joint ventures, seven wholly foreign-owned enterprises, and more than 7,000 employees, the company said.

The win comes amid a growing diplomatic crisis between Ottawa and Beijing, with China having arrested two Canadians this week after Canada’s arrest of the chief financial officer of telecoms giant Huawei.

China’s foreign ministry today confirmed it had detained the two, businessman Michael Spavor and former diplomat Michael Kovrig, on suspicion of endangering national security, according to Reuters.

Shares were down around five per cent today.