Japanese rolling stock manufacturer Hitachi added to the malaise affecting the UK rail sector sentiment by taking a multi-million pound ‘writedown’ on its Newton Aycliffe factory.

The £82m ($103m) plant was built in 2015 to facilitate Hitachi’s intercity rolling stock contract for the UK’s East Coast Main Line. But in its annual financial filing with Companies House Hitachi UK said it had been forced to reevaluate the value of its plant in the North East of England.

Hitachi said the plant was £64.8m ($81.4m) less valuable than previously estimated. But, despite a lack of orders on its books, the firm said it was not a death sentence for the factory.

The Japanese firm said a “production gap” had contributed to the writedown, but also cited global inflation and supply chain issues as key factors in the loss.

“This impairment should not be interpreted that Newton Aycliffe is entering into a period of cessation, instead it should be viewed as an illustration of the current challenges within the industry and will not have any operational impact on its ability to deliver current or future orders,” the company insisted.

The massive loss for Hitachi added to rail industry worries in the UK in 2023.

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By GlobalData

Another rolling stock manufacturer Alstom is seeking new orders for its Litchurch Lane production facility in Derby, without which the firm said it is likely to make at least 1,300 redundancies.

Despite the difficulties in the UK rail manufacturing and production sector, which the Railway Industry Association described as “deeply concerning“, other firms have insisted they will remain active in the country.

But the pressure on manufacturers in the UK is even more stark when successes in mainland Europe and the EU are considered. In recent months Hitachi has acquired the ground transportation unit of French firm Thales, won a multi-million euro contract to supply 30 high-speed trains to Trenitalia, and rolled out its new urban rolling stock on Turin’s tram system.