Siemens commits to international orders with localised tram factory

(Copyright: ARUP)

Siemens has confirmed its commitment to the growing urban public transport market by building a new tram assembly factory in the Turkish city of Gebze.

Image: ARUP

The announcement highlights the company’s decision to localise manufacturing and the supply chain in order to bring about a greater chance of winning tenders and reducing costs for international orders. The rail industry is increasingly depending on international production networks. This is particularly true for the tram business, which is facing changed competitive conditions. To tackle increased competition, Siemens is cooperating with local manufacturing partners in Turkey on a project basis.

Turkish tram factory to produce first vehicles in 2018

The business with urban rail transportation is currently growing at around three percent a year. Along with the traditional producers, many new suppliers from Eastern Europe and Asia are pushing into the tram market and are primarily benefiting from lower manufacturing costs. Numerous established suppliers already have production facilities outside of Western Europe for supplying the world market. Siemens intends to secure its competitiveness in the tram market with its own factory and a local supply chain in Turkey. The £30 million tram factory is scheduled to begin vehicle production at the beginning of 2018.

Commenting on the company’s tram production, Jochen Eickholt, head of Siemens’ rail business, said: “Our Avenio series trams have already proven themselves in some countries. We are now aiming at building on this success in the global market. We have the best chances of succeeding here with a factory in Turkey.”