Nippon Sharyo to expand U.S. railcar business

Nippon Sharyo U.S.A. Inc., Arlington Heights, Ill., has announced its decision to expand operations in the U.S., including the establishment of its own passenger railcar production facility in Rochelle, Ill. The strategy is to increase competitiveness in the expanding U.S. passenger railcar market and to respond to increased desire for localization of railcar assembly.

The new facility is expected to reduce total production costs by reducing transportation costs and by mitigating the risks of exchange-rate fluctuations. It also is expected to provide greater flexibility for production planning and delivery schedules.

Nippon Sharyo's aggregate investment is expected to be around $35 million. This investment will create about 250 new jobs by the end of 2013, the manufacturer states. The facility will be designed to accommodate an annual production of 120 new passenger cars of all types. The initial market will be for suburban commuter-type vehicles and intercity passenger cars.

Nippon Sharyo U.S.A. Inc. will be reorganized, and two new entities will be established under current operation. One is Nippon Sharyo Manufacturing LLC as the group's manufacturing arm, which will own the new production facility and will be responsible for overall production-related activities, including project administration, procurement, manufacturing, quality control, and warranty service. The second entity is Nippon Sharyo Engineering & Marketing LLC, which will be responsible for strategic planning, marketing activities, engineering, and general customer relations, including support for bid preparation.