Chinese railcar manufacturer CRRC Sifang America broke ground on Thursday in Chicago at a $100 million plant that will build railcars for the city's transit authority and become the company's North American hub for the assembly of railcars.

In 2016, CRRC Sifang, a unit of China Railway Rolling Stock Corp, was awarded a $1.3 billion contract by the Chicago Transit Authority (CTA) to supply more than 840 new railcars to replace approximately half of the agency's fleet. As part of the contract, the company agreed to make the railcars in Chicago.

In addition to fulfilling the CTA contract, the plant will give the company a foothold in North America to assemble railcars and, potentially, high-speed trains, CRRC officials said.