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Siemens is investing €30m to build a new assembly factory for light rail vehicles in the Turkish city of Gebze, near Istanbul.

The new factory is scheduled to begin production in 2018.

Siemens has already partnered with Turkish manufacturers to bid for contracts on a project basis. It expects localisation of manufacturing and supply chain of vehicles to improve its chances of winning tenders for international orders.

The urban rail transportation business of the company is currently growing by around 3% a year.

"We have the best chances of succeeding here with a factory in Turkey."

In addition to traditional producers, many new suppliers from Eastern Europe and Asia are pushing into the tram market and are primarily benefiting from lower manufacturing costs.

The new facility is part of the company’s aim to secure its competitiveness in the tram market with its own factory and a local supply chain in Turkey.

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By GlobalData

In recent years, the company has developed and successfully marketed modern vehicle platforms.

Siemens rail business head Jochen Eickholt 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."

Earlier this month, the company had won contracts to supply 21 Vectron locomotives in Europe, and 34 light rail vehicles (LRV) in the US.

In Europe, the order came from Mitsui Rail Capital Europe (MRCE) for ten AC-version Vectron locomotives, which will be deployed in Germany and Austria, and 11 multisystem locomotives in Germany, Austria and Italy.

The company has also secured a $130m contract to deliver additional LRVs to Denver Regional Transportation District (RTD) and Metro Transit, in the US.

Image: Siemens builds factory for trams in Turkey. Photo: courtesy of Siemens.