http://www.bloomberg.com/apps/news?p...=aWDb8VO.Yplc#
By Chris Jasper
Nov. 26 (Bloomberg) -- Hitachi Ltd., maker of the 186 mile per hour (300 kph) Bullet Train, will bid against the French- built TGV on its home soil as the Japanese company targets a European rail market that’s the biggest in the world.
Hitachi, whose high-speed train sales in the region have been limited to the U.K., will offer the latest Shinkansen- series model to replace TGVs run by French state rail operator SNCF and built by Paris-based Alstom SA, said Mac Motraghi, head of sales at the Asian company’s European rail unit.
“We’re having informal discussions,” Motraghi said in an interview at Tokyo-based Hitachi’s depot in Ashford, England, where it services Javelin high-speed commuter units. “The French market has always been Alstom and perhaps our chances of winning there are not that great, but to be a serious rail player in Europe you have to get involved.”
Prospects for sales in France may be helped by concerns at SNCF about the cost of new rolling stock, the executive said, adding that the French company is expected to issue a request for bids next year.
Hitachi will also compete for German orders to replace older versions of the ICE high-speed model made by Munich-based Siemens AG, Europe’s biggest engineering company.
“It’s out, now, that Hitachi are active here and we get approached by the train operating companies,” Motraghi said. “We see high speed expanding throughout Europe and we want to be a part of that. I think it’s very realistic.”
SNCF, or Societe Nationale des Chemins de Fer Francais, may issue a tender for a new generation of high-speed trains as early as next year, with the contract open to bids from any supplier, spokesman Philippe Mirville said by telephone. The company has more than 300 TGVs and 83 awaiting delivery.
Alstom said Hitachi may find it tough to penetrate a European market that’s complicated by the variety of railway systems and requirements for cross-border running.
“The Japanese industry is a very serious one and their ability and technology isn’t in doubt, but they will face some difficulties,” Jean-Noël Debroise, product-strategy manager at Alstom’s Transportation unit, said in a telephone interview today. “We know the customer better than them.”
Siemens has won five of eight contracts tendered since 2002 in the super-high speed segment for trains faster than 300 kph, giving it confidence in a product range led by the new Velaro model, spokeswoman Anja Uhlendorff said. Unlike the ICE, the Velaro was developed without a partner as the German company seeks to maximize its market share, she said.
The Shinkansen -- meaning “new main line” in Japanese and referring originally to the dedicated tracks on which it runs -- grabbed the world rail speed record on its introduction in 1964. The model was dubbed the “bullet train” overseas because of its then-unrivalled speed and streamlined design.
Busiest Network
The Japanese high-speed network is the world’s busiest, carrying 151 million people in the 12 months through March 2008, according to Central Japan Railway Co. TGVs run by SNCF moved 98 million passengers last year, its Web site says.
Alstom says it has built 70 percent of all trains able to travel at more than 300 kilometers per hour. The TGV, or Train a Grande Vitesse, was introduced in 1981, captured the speed record in 1990 and has held it ever since, setting a new high of 575 kph in 2006 using a modified vehicle running on a new railway line in eastern France.
Hitachi sold 29 Javelins to Go-Ahead Group Plc for use on the U.K. section of the Channel Tunnel rail link, the country’s only line able to carry trains at 140 mph or more, and to shift people from central London to the site of the 2012 Olympics. The new units will begin a full roster of U.K. services next month.
Open Market
Britain, with no major train manufacturer and a network run by listed companies, is Europe’s most open market and has provided a bridgehead for exports in the region, Motraghi said.
“Some of the markets in Europe are more mature than others, but there are new projects all the time,” he said. “Capacity needs to be expanded and rolling stock replaced, so there are plenty of opportunities. We are in Europe to stay.”
Hitachi will offer to build trains outside Japan for the first time in order to win orders, Motraghi said. The Javelin trains were exported from Tokyo but a U.K. contract for hundreds of units to replace 35-year-old High Speed Trains on routes from London will require a major manufacturing presence, he said.
Motraghi said the Japanese company is also encouraged by developments in the U.S., where the economic stimulus package passed by Congress in February included $8 billion to develop a high-speed network and President Barack Obama in April identified 10 potential corridors where the trains might run.
“We are a world player in railways and wherever there is a major project we would like to be involved in that,” he said. “The American market has its own challenges but we are more than happy to go in there.”
Given the size of the U.S. project, Hitachi is most likely to bid with its Shinkansen allies and a local partner, Motraghi said. SNCF said in September it may bid to build and run routes in California, Florida, Texas and Chicago.
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