Mitsubishi Heavy Industries Ltd. and Hitachi Ltd. have reached a basic agreement to work together in marketing, building and servicing urban railway systems overseas.
The two firms will cooperate in securing train projects abroad, including light rail systems and subways, given the anticipated demand in countries such as Brazil to expand their rail networks and other social infrastructure.
The move puts them in fierce competition with the rail industry's Big Three — Germany's Siemens AG, Canada's Bombardier Inc. and France's Alstom SA.
Gaku Suzuki, Hitachi's executive officer who is responsible for industrial and social infrastructure systems, told a news conference in Tokyo on Tuesday that the two companies will work on creating a robust alliance to face the competition.
"If we don't gather our resources together, the reality is that we cannot quite win against the Big Three, and (even) with the resources between our two firms, we have not reached the level of the Big Three, so we have to strengthen our resources," Suzuki said.
"For Japan and advanced countries, it's about replacing train cars . . . but when it comes to the whole package of construction and maintenance of the railway system, the market is in emerging countries, and we would like to take that approach," he said, adding they are targeting Vietnam, Thailand, Brazil and India.
Under the new partnership, whose negotiations started last fall, MHI and Hitachi will create a joint office around July to discuss their tieup.