The global rolling stock market is anticipated to register a CAGR of about 4% during the forecast period (2020 - 2025).
- The rapid urbanization, traffic congestion, growing environmental concern, increasing technological advancements, are expected to fuel the demand of the rolling stocks in the forecast period. As rolling stock orders have long lead times and long lifetimes so to ensure that, rigorous research and innovation are needed to manufacture rolling stock that meets the needs for years to come. This market is witnessing the active participation of governments to develop this cheapest and safest means of transportation more comfortable.
- It's been decades after the introduction of trains for transportation, and now autonomous trains and ultra-high-speed trains are the future of railway transportation along with other new technologies to support it. For instance, in European Rail Traffic Management System (ECTS) Level 3 the trackside equipment will not be there and train-location and integrity does not have to rely on trackside equipment (signals, track circuits or axle counters) rather handled by train and Radio Block Center (RBC), although it is currently still under standardization. Whereas ECTS Level 2 is still in its test phase in some of the developing countries.
- European Union (EU) has the largest electrified rail length in the world also one of the safest railway's network in the world with around 218,000 km of active rail network. EU commission is committed to make their rail network more convenient for passengers by introducing various laws and along with that inviting private industry players to advance the current network. For instance, EU commission has a target of moving 30% of freight travelled by distance more than 300km for other modes of transport (rail or water), by 2030
Key Market Trends
Government Participation is Contributing the Rolling Stock Market Growth
Growing environmental concerns due to the road and air transport, city congestion is growing at a rapid rate, railway transportation is the cheap and environmentally friendly alternative. In most of the biggest rail network countries management is under the control of private players. But at the same time government has some control over its operations. India which has the fourth-largest rail network in the world has a state-owned rail network, and in 2019, Indian Railways has received a budget allocation of USD 9.62 billion for the 2019-20 fiscal year which is 19.5% more than that of the previous year. In addition to that a proposed capital expenditure outlay of USD 23.4 billion for railways. The government is planning to introduce modern trains and already privatized a few trains on selected routes. Similarly, in 2017 the UK's government have announced that around USD 50 billion of investment will be done on the rail network modernization during the period of 2019 to 2024.
Asia-Pacific Is Expected to Lead the Rolling Stock Market
The railway is the preferred means of transport among the passengers of the major Asian economies such as China, India, and Japan. With these three countries also topping the list of passenger-kilometer per year, in addition to those major manufacturers of rolling stock market are headquartered in this region.
Local governments are putting more and more capital for advancing the present rail network. For instance,
- In 2018 China invested USD 117.12 billion in fixed rail assets and its plan for 2019 is to invest in 6,800 km of new railway lines which is 40% up from the previous year, in which approx. half of the railway lines are high-speed rail.
- Indian Railways is set to combine its rolling stock manufacturing units and workshops into a new public sector unit (PSU) - Indian Railway Rolling Stock Company. This PSU will be structured along the lines of China's CRRC Group. In addition to that Indian railway is also modernizing the existing railway network by including new OMRS system, which consist of Acoustic Bearing Detector (ABD) or Rail Bearing Acoustic Monitor (RailBAM) that can detect the faults in the bearings and wheels of rolling asset.
The rolling stock market is consolidated and some of the major players in the market are CRRC, Alstom SA, Siemens AG, Wabtec Corporation, and Hyundai Rotem, amongst others. The companies are expanding their presence by acquiring other market participants, forming strategic alliances with other players in the market, and launching new and advance rolling stocks. For instance,
- In 2020, Alstom announces that it has signed an MoU with Bombardier Inc. and Caisse de depot et placement du Quebec ("CDPQ") for the acquisition of Bombardier Transportation. The price for the acquisition of all the Bombardier Transportation shares will be around Euro 6 billion.
- In 2020, Stadler sealed a USD 349 million contract from Hungarian MAV-START a state-owned passenger operator for 21 KISS electrical multiple unit trains and a USD 112 million maintenance contract from the US transit agency Dallas Area Rapid Transit (DART).
- In 2020, BST, Bombardier joint venture (JV) won a USD 357m contract from China State Railway Group, this contract covers the maintenance of 656 high-speed train cars. previously these trains are manufactured by BST.
- In 2019, The China Railway Rolling Stock Corporation (CRRC) unveiled its latest metro train in Australia, this new metro train in fully automatic, capable of starting and stopping, controlling the doors and handling emergencies autonomously. Altogether 23 locomotives and about 27,000 goods trains from CRRC have been operating in Australia.
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