German Rail Operator Deutsche Bahn Seeks Chinese Suppliers

Deutsche Bahn will open a procurement bureau in the Chinese city of Shanghai next week as it seeks to expand its range of international suppliers, it said on Nov. 17.

The move will increase competition for existing suppliers Alstom, Siemens and Bombardier, which command a large share of the German rail operator's 10 billion-euro ($10.7 billion) annual budget for upgrades.

"We are looking for suppliers worldwide," said Deutsche Bahn's procurement chief Uwe Guenther. "We expect that by 2017 Chinese companies will be in a position to take part in tenders for wheels or wheel sets.

He added: "The purchase of trains is a possible distant option and a demanding challenge for Chinese companies."

European and U.S. train makers are facing increased competition from China's CRRC Corp, the world's biggest train maker by revenue, both in China and increasingly elsewhere.

Barclays capital goods analysts wrote in a note: "We believe that DB will initially focus on sourcing components rather than systems from China. However, it keeps the pressure on the main suppliers to improve efficiency."