Download pdf - Rail market outlook 2013–2022

Rail Outlook Study 2013–2022 Paradigm Shift Towards Intermodal Mobility Boosts Growth in All

Rail Segments

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May 2013

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Sarwant Singh Partner and Business Leader Automotive & Transportation

+44 207 730 3343

[email protected]

Research Team

Strategic Review Committee Leader

Franck Leveque Vice President Automotive & Transportation - EMEA

+49 (0) 69 770 33 21

[email protected]

Research Director

Shyam Raman Research Analyst Automotive & Transportation

+91-44-66814173

[email protected]

Lead Analyst

Special Thanks

Vivek Balakrishnan

Executive, Quality Assurance Hasmita Sandeep

Assistant Editor Jaya Selvi A

Production Editor

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Contents

Section Slide Numbers

Executive Summary: Global Rail Market Overview and Key Highlights 4

Research Scope, Objectives, Background, and Methodology 21

Definitions and Segmentation 28

Rail Trends in North America 30

Rail Trends in Europe 41

Rail Trends in China 56

Rail Trends in Turkey 65

Rail Trends in Eastern Europe 73

Rail Trends in Latin America 80

Rail Trends in Africa 86

Conclusion 92

Appendix 95

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Executive Summary

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Note: Assumptions based on forecasted global economic growth and the Euro crisis.

Top 5 Predictions and Trends for 2013–30

Key Predictions

• The Chinese high-speed rail network will span 25,631 km by 2030. China will have a track length of 120,000 km by 2020, more than Russia.

• Class I railroads In North America will spend over €8.70 billion towards modernisation per year until 2022. Signalling, track materials, locomotives and rail cars are of the highest priority in modernisation.

• Demand for improved efficiency in the rail industry will drive the market for advanced asset and fleet management tools, including remote diagnostics (or prognostics), passenger information and asset planning.

• China Southern Rail and China Northern Rail are to be among the top three global rolling stock manufacturers and suppliers.

• Automated people movers (APM) and personal rapid transit system (PRT) are expected to show strong growth as ‘feeder’ routes for higher-density lines in highly urbanised and densely populated areas.

• Rail automation will help increase efficiency without compromising on safety. The radio-basedcommunication-based train control (CBTC) network in Western Europe is expected to grow at a compound annual growth rate (CAGR) of 22.8 per cent over the next 10 years.

Source: Frost & Sullivan

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Key Trends

• In Europe: About 10,298 locomotives and 1,860 railcars are likely to be replaced between 2015 and 2022.

• Rail automation will provide customers with real-time information, and information transfer and sharing between different related businesses for better travel and planning.

• In North America: While light rail and commuter rail are the fastest growing markets in terms of project rollout, metro rails are the largest market for replacements.

• Train operators are starting to use Internet protocol architecture for onboard Internet access, operation and safety services. This also provides an opportunity for new-generation multimedia applications developed in IP environments to build a common base in the future.

• Africa is the highest-growth region in the rail supply market globally. The market size is set to double by 2022, as a relatively stable political environment is inviting international participants to invest in African rail infrastructure.

Note: Assumptions based on forecasted global economic growth and the Euro crisis.

Top 5 Predictions and Trends for 2013–30 (continued) R

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• China crossed a milestone in high-speed rail (HSR), with services from Beijing to Guangzhou. The rail

covers 2,230 km in 8 hours, at an average speed of 300 km/h.

• Brazil invests over 1.48 billion in monorail systems for São Paulo and Manaus.

• Italy is spearheading mainstream deployment of driverless metro solutions, with the completion of four

lines in Milan and Rome. The market is expected to experience high growth post-2021.

• US Class I railroads invested more than €1.17 billion towards achieving 100 per cent positive train

control.

• The UK and the US have the highest number of rolling stock with Wi-Fi services in Europe and

North America, respectively.

• Over 12 projects have been approved in the Middle East, with an expected investment of over

€38.51 billion.

Highlights of 2012


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Global Rail Supply Market is Expected to Earn €155.19 Billion in 2013 Rolling stock and services are the chief contributors. Rail control is the fastest-growing, followed by services.

Rail Market: Expected Breakdown of Rail Supply, Global, 2013

• Rail controls are witnessing extensive investment, as they are considered the first step to running a profitable railway line.

• Orders for rolling stock in Asia, the Middle East and Latin America are driving the market.

• The rail supply market is expected to grow at an annual growth rate of 3.8 per cent in 2013.

• The need for mobility is driving demand in mass transportation, passenger rail and freight applications.

• Global mainline freight and passenger levels have recovered from the 2009 recession levels. European rail traffic is constrained due to the ongoing sovereign debt crisis.

Rolling Stock Infrastructure Services Rail ControlIntegratedProjects

Total

Expected Investements 51,535.1 31,811.1 57,836.0 13,241.2 766.2 155,189.6

0.0

20,000.0

40,000.0

60,000.0

80,000.0

100,000.0

120,000.0

140,000.0

160,000.0

180,000.0

Co

st

(€ M

illi

on

)

2.3%

2.1%

2.9%

3.0% 2.6%

3.8%

Note: All figures are rounded. The base year is 2012. Source: Frost & Sullivan

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Rail in Africa, the Middle East and Latin America to Double in Size by 2023 Infrastructure spending, rolling stock orders and greenfield and brownfield projects are factors for strong growth. Political instability in Africa and the Middle East, and credit limits in Latin America keep growth in check.

7.1%

Latin America

2.7%

North America

8.0%

The Middle East andAfrica

2.1%

Western Europe

2.1%

Eastern Europe

1.8%

Asia-Pacific

2.1%

Commonwealth ofIndependent States

Rail Market: Expected Regional Growth Rates in Rail Supply, Global, 2013

• The Middle East, Africa and Latin America (LATAM) drive the rail market. • Eastern Europe shows great promise, but lack of funding continues to dampen demand, driving growth

rates below 2.5 per cent.

• India and Malaysia are expected to be the next centres of infrastructure expansion.

• Brazil’s target to

finish urban rail projects for the 2014 World Cup driver LATAM growth.

Detroit’s P3 commuter rail has been

approved with an initial grant of €207 million.

• The growth rate in Asia-Pacific (APAC) declined due to slowing rolling stock orders in China (previous orders completed).

• Nigeria’s rail industry has

over 7 on-going infrastructure projects.


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5,000.0

0.0

5,000.0

10,000.0

15,000.0

20,000.0

25,000.0

0 50 100 150 200 250 300 350

Po

pu

lati

on

(p

er

km

tra

ck)

Area per km track (km2)

Comparison of Top 20 Countries with Largest Rail Network Size China and India have low network density and high passenger compression on their networks, unlike markets such as Germany, where the population and the land area are lower.

• China and India are considering increasing the

effective network length to lower the load on the

railways due to population (thereby reducing the

population per km of track).

• In Argentina, Australia, Brazil, Canada, Russia and

the US, as the population density is low, private

freight operators own and operate most of the rail

network.

Rail Market: Comparison of Top Countries by Rail Network Size, Global, 2013

Note: Bubble size denotes length of network in km. Future trend

Zone of effective rail length for population load Note: All figures are rounded. The base year is 2012. Source: Frost & Sullivan

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-500,000

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

-200,000 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000

Fre

igh

t T

raff

ic (

TK

M M

illio

n)

Passenger Traffic (PKM Million)

Most Large Networks are Poor Utilizers of Rail Infrastructure With the exception of China and Ukraine, most countries perform poorly in either freight or passenger transport.

100,000.0

50,000.0

0.0

50,000.0

100,000.0

150,000.0

200,000.0

250,000.0

300,000.0

350,000.0

400,000.0

(25,000) (5,000) 15,000 35,000 55,000 75,000 95,000

Fre

igh

t T

raff

ic (

TK

M M

illio

n)

Passenger Traffic (PKM Million)

Note: Bubble size denotes length of network in km.

• Low freight utilization, high passenger utilization: poor modal share of rail in freight transport

• High freight utilization, low passenger utilization: poor modal share of rail in passenger transport • China and Ukraine have balanced

utilization levels in freight and passenger rail

Rail Market: Comparison of Utilisation of Top 20 Rail Networks by Size, Global, 2013

Note: All figures are rounded. The base year is 2012. Source: Frost & Sullivan Key: PKM - Passenger Kilometre

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CSR and CNR are among the Top 3 Rolling Stock Manufacturers Strong rail programme within China has CSR and CNR as a well-equipped competitor in the global market. CSR and CNR have started competing for infrastructure projects as well through consortiums.

0 1,000 2,000 3,000 4,000 5,000 6,000

CSR

Bombardier

CNR

Alstom

Siemens

Transmashholding

CAF

Hyundai Rotem

Kawasaki

GE Transportation

Annual Revenue (€ Million)

Ro

llin

g S

toc

k M

an

ufa

ctu

rers

• CSR and CNR are expected to decline in size by 2016 as

Chinese orders are fulfilled.

• China is funding projects in developing markets, which

increases conversion rates for rolling stock bids and also allows

for earning potential throughout the product’s life cycle.

• Hyundai Rotem is strategically positioned in Turkey to compete

in Europe, Asia, North Africa and the Middle East.

Rail Market: Top 10 Rolling Stock Manufacturers, Global, 2012


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228

247

32 15

60

2022

14.0

13.7

9.5 6.6 7.5

15.6

93.6

13.0 1.7

52.5

198.3

11.6

28.2

8.6

5.3 7.1 0.9 18.8

12.0

3.0

18.8

41.3

Europe Asia-Pacific The Middle Eastand Africa

Latin America North America

Europe and Asia Show Strongest Investments in HSR China to invest €198.30 billion to extend the HSR network to 16,000km by 2020. Globally over €581.60 billion spending by 2022.

Turkey

Sweden

Spain

Russia

Poland

Italy

Germany

France

Portugal

Switzerland

2.0

54.0

36.9

2012

Saudi Arabia Morocco

GCC

Brazil

Argentina Mexico

US

Rail Market: Cumulative Investments on High-Speed Rail Infrastructure by Country,

Global, 2012–2022

€581.60 Billion

€92.9 Billion

Europe

Asia-

Pacific

Middle

East &

Africa

Latin

America

North

America

Europe

Asia-

Pacific

A

B

C D

E

A. Projects in Poland and Portugal have been cancelled due to the Euro-zone crisis. The Portuguese project had legal disputes as well.

B. Indian railways have approved 7 HSR corridors.

C. The GCC project will link several member states by 2017.

D. Argentina’s HSR project has been put on hold

due to a crisis in funding.

E. The California High-Speed Rail is considered the only surviving project left in the US.

Africa Morocco

China

India

Japan

South

Korea


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9,824

7,361

362 200

5,395

3,694

480

3,982

9,603

511

900

Africa APAC EU LATAM NA

Operational Length Under Construction Planned

High-Speed Rail to Connect Continents in Future By 2025, the first steps to connect Asia and Europe by HSR services are expected to commence. A tremendous modal shift is also likely from highways to rail.

2012 2022

Rail Market: Length of High-Speed Rail Infrastructure by Country, Global, 2012–2022

Total 42,312 km

Total 74,896 km

Global HSR Network Length

CAGR 4.5%

• Spain, France and Turkey

are expected to have the

largest HSR networks in

Europe by 2025.

• Although India has the

potential to be the second-

largest HSR network in

Asia after China, the rate

of HSR adoption in India is

still uncertain due to

concerns in project

management and funding.

17,547

9,289

15,476

42,312

15,858

16,726

Source: UIC, Frost & Sullivan

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Europe and North America Highest Spenders in Urban Rail Latin American and Asian markets are expected to reach maturity post-2025. Africa is expected to be the highest-growth region in the world for urban rail post-2025.

362.6 171.9 504.7

3,089.5

465.0 1,480.0

2,234.0

867.6

207.2

917.0

286.3

542.4

243.0

0.0

1,000.0

2,000.0

3,000.0

4,000.0

5,000.0

6,000.0

Africa Asia-Pacific Latin America North America Europe

Inv

estm

en

t (€

Millio

n)

Light Rail Metro Commuter Rail Monorail

• Lima Metro is expected to award the contract for line 2 towards the end of 2013.

• At a total cost of €2.30 billion, the Lima Metro is expected to have Bombardiers CityFlo automation.

• The main impact of an investment of this scale would be the increased dependence on passenger rail, which could translate to future intercity projects.

• The monorail is experiencing a resurgence in adoption, with orders over €1,071 million expected in 2013.

• The monorail competitive scenario is expected to change significantly, with more participants entering the market.

• Light rail is the most popular rapid transit choice in Africa. However, future lines and expansion are expected with the monorail.

Rail Market: Expected Financial Commitments in Urban and Commuter Rail, Global, 2013


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The Future of Mobility is Multi-Modal Commuting, Combining

Door-to-Door Solutions Using Dedicated Mobility Platforms

• Door-to-door integrated multi-mobility is likely to become a reality.

• Vehicle manufacturers plan to offer smart mobility solutions, ensuring first and last mile connectivity.

• The government plans to club public transport with bike / two wheeler/car rental schemes.

• The market will probably encounter new participants termed Mobility Integrators.

City

Suburbs

Intercity

Tra

vel D

ista

nce

Travel Distance Destination

Public

Transportation

Private Cars

Shared Mobility

Micro-mobility

Intercity Bus

Intercity

Train

ty

Shared Mobility

CAR

OWNERSHIP

Rail Market: Future of Multi-Modal Passenger Transport, Global, 2022


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Schematic of a Multi-Modal Electronic Travel Card NS: Case NS Card The electronic ticketing server is synchronised in real time with central control systems of various transport modes to provide the most updated, accurate information to passengers.

Level 0 NS-Business Card

Level 1 Equipment on

Passenger Level

Level 2 Local Systems

Level 3 Central System of

the Public Transport

Company

Level 4 Central Processing System

• The OV-chip card is the basis of the NS-Business Card and has a unique code.

• RFID Card Readers are used to

read the NS-Business Card.

• Information on ‘Check-in’ and

‘Check-out’ timestamps transferred.

• Check-in and check-out information from Level 1 equipment is stored in local systems in stations, garages and depots.

• Respective transport company receives information from Level 2 Systems.

• Billing for each card based on usage is calculated by respective transport companies.

• Payment details for each commuter are collated from different public transport companies to generate a single bill for each customer.

• Unique code offers the possibility

of personalised bills (person-oriented analysis).

• Information sent to the respective companies and employees for payment.


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DB Bahn Touch and Travel System Technology Solution VDV Kernapplikation‘ (KA) is the German eTicketing standard embedded on an NFC SIM card. The existing mobile operator’s infrastructure is used to transmit data and is the key piece in the technology puzzle.

Sources: NFC Forum, DB Bahn, NXP and Frost & Sullivan

“eTicketing will become iTicketing. Traditional methods of fare collection are expected to become obsolete by 2030. Ticketing systems in transport systems will become “Aware” of the passenger, and

collect charges without the physical action of paying the fare.” – OEM

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Transition Shift in ICT Strategies On-board Trains Faster time-to-market solutions can be realised if rail operators also have the knowledge of IT systems, as rail operators traditionally deal with mechanical issues. They buy IT solutions but do not manage them.

Complex IT Architecture Separate & Standardise

Link System

Audio

Telephony Security Systems

Audio

Video

Telephony Security Systems y y pSystemsy

AudioRemote Monitoring

Video

Remote Monitoring

A modular approach is used Can incorporate new solutions with ease

Single point-based solutions are deployed

Difficulty in integrating new solutions

Shift of Information Technology Platforms in Trains

A d l h i d

Shift to 80% configuration & 20% customisation

Single point-based solutions are deployed

80% customisation & 20% configuration approach


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IT has been Integrated Heavily in Every Aspect of Rolling Stock The data communication system (DCS) provides synchronisation of varied information at high bandwidth and low latency for high throughput. The DCS does not perform control functions.

Wayside data communication network

Wayside radio

Platform doors interface unit

Zone controller

Train doors

Platform doors

Zone controller + internal interlocking

Operations control centre

Cab HMI

Transponder

On-board passenger information

Spot transmission antenna

Train-borne controller

Database storage unit

Maintenance management unit

Form fit functional interface specification

Functional interface specification

External interlocking

Wayside Passenger Information

Wireless link

Human machine interface

System

Data Communication Subsystem

Spot Transmission Subsystem

Mobile radio

Sources: MODURBAN, Frost & Sullivan

Schematic Layout of the MODURBAN Communication System in Europe

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Research Scope, Objectives, Background and

Methodology

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Research Scope France, Germany, Italy, Spain, the United Kingdom, the Netherlands, Ireland, Norway, Sweden, Denmark, the US and Canada are regarded prolific centres of rail infotainment, often setting standards for the industry.

Rail: Infrastructure and Rolling Stock Topics Covered

2013 to 2022 Forecast Period

2012 to 2022 Study Period

2012 Base Year

Geographical Regions

The following regional markets are covered in this research service:

• North America (the United States and Canada)

• Western Europe

• Eastern Europe

• China

• Turkey

• Latin America

• Africa


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Research Aims and Objectives

Aim

The aim of this research service is to provide an executive outlook of the growth opportunities in the

global rail market for 2013.

Objectives

• To provide a strategic overview of key mega trends influencing the global rail industry in 2013.

• To provide market drivers and opportunities in the global market and discuss the regional influence

on market dynamics.

• To provide insights into the global economy and discuss the impact on freight demand in the global

markets.

• To provide market forecasts of global vehicle sales of rolling stock for 2013–2022.

• To provide market size for infrastructure projects on a global scale, broken down for key regions.

• To provide a strategic overview of key technology trends.


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Key Questions This Study Will Answer

What is the global market for rolling stock in 2013?

Where are the new opportunities in rail infrastructure for rail?

Which markets will drive growth opportunities for rail during 2013–2022?

What will be the impact of mega trends on the global rail industry in 2013?

Rail Market: Key Questions This Study Will Answer, Europe, 2013–2022


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Year RS Code Research Service Title Region

2012 M77E-18 Growth Opportunities in Urban Rail Rolling Stock Systems in Europe Europe

2012 M77D-18 Strategic Insight on Global Rail Market Global

2011 M4DD-18 Strategic Analysis of the Global High-Speed Rail Market Global

2011 M64A-18 North American Locomotive Market: A Strategic Analysis of Powertrain Technologies and Auxiliary Systems

Considered by OEMs for EPA Emission Compliance North America

2011 M6DB-18 Strategic Analysis of Alternative Powertrain Technologies in the European Diesel Locomotive and Railcar

Market Europe

2011 N92D-18 An Executive Analysis on Passenger Rail Rolling Stock and Seating Systems Market in the U.S. USA

2011 P488-18 Green Technologies and Developments in Rail Transportation APAC

2010 M649-18 European Rail Catenary Systems – Executive Analysis of Copper Requirement for Electrification across

Strategic European Markets Europe

2009 M3F5-18 Strategic Analysis of the European Rail Electrification Market Europe

2009 M1B6-18 Strategic Analysis of the European Light Rail and Underground Market - Part 2: Market Engineering

Measurements Europe

2009 P2A3-18 Strategic Analysis of the Growth Opportunities in the Indian Rail Industry India

2009 M363-18 Strategic Opportunity Analysis of the Russian Rail Market: Implication for the Global Supply Chain Russia

2008 P391-18 360-Degree CEO Perspective on Green Transportation: Focus on Rail, Automotive and Procurement Global

Research Background

This research study strengthens the coverage of the rail industry.


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Company Company

Centro Skoda Transportation

Thales Keolis Nordic AB

Invensys Rail Ltd AB Stockholms Spårvägar

RATP Barcelona Metro

Vectus Ltd. Roma Metro

ULTra PRT Milan Metro

2getthere Copenhagen Metro

Rock Project Ansaldo STS

TFL UK Bombardier

Alstom Transport Siemens

Thales

Research Methodology: Frost & Sullivan’s

research services are based on secondary

and primary research data.

Secondary Research: Extraction of

information from existing reports and

project material within the Frost & Sullivan

database, to include data and information

gathered form technical papers, specialised

magazines, seminars and Internet

research.

Primary Research: More than 10

interviews have been conducted over the

phone by senior consultants/industry

analysts with original equipment suppliers,

regulation authorities and distributors.

Primary research has accounted for 80.0

percent of the total research.

Research Methodology

Partial List of Global Industry Participants


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Key OEM/Participant Groups Included in this Study

Group OEMs / Divisions

Alstom Alstom Transportation

Bombardier Bombardier Transportation

Siemens Siemens Mobility

Thales Thales Transportation

Invensys Invensys Rail

Finmeccanica Ansaldo STS, Ansaldo Breda

Group OEMs / Divisions

Vossloh Vossloh Kiepe

CAF CAF

Stadler Stadler

The OEM groups and companies compared in this study are as follows:
