Strategic Insight of Global Rail Market: Trends and Opportunities Across Key Regions for Rail

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The study is a 360 degree analysis of the global rail market that focuses on the key trends and business opportunities available across various rail segments around the world. The study provides an insight into how urbanization is influencing rail travel and highlights trends within the rail industry that are expected to possess huge revenue potentials for industry participants. The study discusses trends and opportunities in the rail markets segmented by regions such as North America, Europe, and BRIC. Urban mobility is bound to evolve towards more efficient economic and operational models. Mobility integrators like technology providers and telecom operators are expected to have greater interests in transportation promoting sustainability.

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Strategic Insight of Global Rail Market: Trends and Opportunities Across Key Regions for Rail

  1. 1. Strategic Insight on Global Rail MarketTrends and Opportunities Across Key Regions for Rail M77D-18 April 2012
  2. 2. Research Team Lead Analyst Contributing AnalystSurendar Chandrasekaran Shyam RamanTeam Leader Research Analyst +914466814173 +914466814173 Shyamr@frost.com Surendarc@frost.com Research Director Strategic Review Committee LeaderFranck Leveque Praveen ChandrasekarVice President, Automotive & Transportation Program Manager, Automotive & Transportation +49 (0)69 770 33 21 +914466814129 franck.leveque@frost.com cpraveen@frost.comM77D-18 2
  3. 3. ContentsSection Slide Numbers Executive Summary 4Rail Mega Trends 13Evolution of Megacities: New Mobility Concepts 31 The Rail Advantage 43 Rail Market Trends in Europe 48 Rail Market Trends in North America 60 Rail Market Trends in Asia-Pacific 72Rail Market Trends In BRIC and The Middle East 81Competitive Landscape 105Legal Disclaimer 110M77D-18 3
  4. 4. Executive SummaryM77D-18 4
  5. 5. Key Trends Across the Global Rail MarketsHigh speed, urbanisation and emerging economies will be the key enablers of the railindustry through to 2020. High-speed rail (HSR) will be the biggest market opportunity, with $900 billion potential for rail participants globally. The BRIC and Middle East markets collectively will contribute to $1 trillion in rail investments between 2011 and 2016. Urbanization in Asia has increased demand for urban rail systems such as metro, light rail and monorail. About 120 urban rail systems have been identified in the Asian Region, including the Middle East. Chinese CSR and CNR will emerge as one of the top 5 rolling stock OEMs globally. Increasing fuel prices and rail’s green tag will boost freight transport by rail globally. Considerable rail modal share gain will occur in North America and Europe by 3% and 5%, respectively, by 2020. Rail IT deployment: smart ticketing, automated fare collection, and signalling will present the next wave of business opportunity in the rail sector globally. Finally, North America’s opening up to passenger rail will create a demand for 14,000 passenger rolling stock over the next 10 years. Source: Frost & Sullivan analysis.M77D-18 5
  6. 6. Global Trends in Rail Industry Emission reductions and automation are the key technology-related enablers of the rail industry. Trends Implication Impact on Rail Industry •Urbanisation leads to expansion of city boundaries Increased travel and need for hassle- Urbanisation •Three main concepts: megacities, mega regions, and mega corridors. free, high-speed transport •Concept to shift from “GREEN” to “SMART” Multimodal transport demand, Mega Cities •Energy efficiency and zero emissions as the basic premise of SMART initiatives. integrated services, smart ticketing Urban sprawl, rising disposable incomes, and chocking transport infrastructure are key Rising demand for transportation projects, Asia Booming urban rail gains strong favour trends in the region New Business Next-generation business models will redefine future business propositions and influence Mobility integration, last-mile Model future technology and product development. connectivity services, on-board WiFi, station retail Hybrid locomotives, alternative fuel Europe and North America funding technologies and programs that will help to cut C02 Footprint carbon emissions. powertrains, electrification of lines, advanced drive systems Increasing Fuel •Less usage of personal transport. Shrinking size of cars for city use only Increasing passenger and freight traffic, Prices •Increasing modal shift from road to rail automated signalling to boost capacity •Asian, Eastern European, and North American rail market expectations vary and are New platforms, high levels ofGeographic Variety customisation of rolling stock considerably different from Western European expectations. construction •Increasing use of more than two modes of transport on a daily basis in key European Improved station services, protected Multimodality and Asian cities. Next-gen AFC key to drive inter-modality in the future bike parks, charging infrastructure for Evs, onboard cycle portablility •World with zero emissions, zero accidents, zero fatalities, zero defects.Innovating to Zero •Companies will shift focus and develop products and technologies accordingly. Evolution to driverless trains, PRT Source: Frost & Sullivan analysis. M77D-18 6
  7. 7. Projected Global Infrastructure Investment 2005-2030 Transport investment will account for 19 percent of the total $41 trillion to be spent on infrastructure. Rail Market Trends: Mainline Railway Track Additions, Global, 2010 and 2020 North America Europe Middle East Infrastructure (in billion $) Infrastructure (in billion $)Infrastructure (in billion $) Expenditure on Expenditure on Expenditure on Latin/South America Africa Asia/Oceania Infrastructure (in billion $) Infrastructure (in billion $)Infrastructure (in billion $) Expenditure on Expenditure on Expenditure on Total in billions Water $22,610 Power $9,000 Road & Rail $7,800 Air/Seaports $1,590 Source: Frost & Sullivan analysis. M77D-18 7
  8. 8. Global Passenger Rolling Stock Market Mainline network growth will be pronounced in the Asian region as India and China expand their freight corridors. Rail Market Trends: Mainline Railway Track Additions, Global, 2010 and 2020 1,035,887 1,010,767 • Only a mere 0.2 percent growth in global mainline network length. 7.1% • Europe to maximise utilisation of its current network for freight; Asia to 3.8% 7.2% add extra capacity in terms of track length 3.9% Note: Chart In Center Shows Mainline Railway Track Addictions By 2020 In Each Region Mexico 26.2% 24.9% 26,704Route Km Operational Canada 58,495 Others 10.9% 11.0% 63,875 Korea Others 3,378 Australia 83,160 Japan 10,674 Romania 20,136 21.8% USA 22.3% 10,776 226,855 Poland UK 19,864 Ukraine China 16,373 Spain 21,678 Serbia 101,000 Uruguay Others Cuba 30.8% Italy 15,243 4,058 5,076 30.1% 5,752 4,028 16,959 France All Afro-countries Chile 30,001 39,814 Argentina 5,752 Russia India 25,523 Germany 85,894 72,355 Brazil 33,806 30,217 Note: All figures are rounded; the base year is 2010. Source: Frost & Sullivan analysis. M77D-18 8
  9. 9. Projected Global Infrastructure Investment 2005-2030Transport investment will account for 19 percent of the total $41 trillion to be spent oninfrastructure. Rail CEO 360: Annual Rolling Stock Market Forecast, Global, 20082016 Annual Market Size Annual Market Size ($ Billion) Annual Market Size ($ Billion) ($ Billion) Annual Market Size ($ Billion) Annual Market Size ($ Billion) Legend 2008-2010 2011-2013 Source: Frost & Sullivan analysis. 2014-2016M77D-18 9
  10. 10. Global Rail Snapshot Post-2008 crisis, both freight and passenger rail traffic have recovered well across regions. Rail Market: Length of Railways, Freight and Passenger Turnover, and Growth, Global, 2010 North America Traffic Movement in Russia Traffic Movement 2010 in 2010 Traffic (Billion tkm 8.1% Traffic (Billion tkm or pkm) 10.3% China Traffic Movement 6.5% or pkm) in 2010 23.3% Traffic (Billion tkm 9.5% 11.2% or pkm)• China and India are the fastest- Europe Traffic India Traffic Movement growing rail markets. Movement in 2010 in 2010• Traffic (Billion tkm U.S. rail freight has registered the 6.5% 3.1% 8.9% biggest growth, but is yet to Traffic (Billion tkm surpass 2008 traffic levels. 7.8% or pkm)• In Europe, traffic has surpassed or pkm) pre-recession 2008 levels.• However, rail freight recovery in EU 27 has been slow.• Eastern Europe witnessed further fall in freight traffic. Traffic Growth over Traffic Decline 2009 over 2009 Source: Frost & Sullivan analysis. M77D-18 10
  11. 11. High Speed Infrastructure Market The global HSR market presents the biggest business potentials in the rail industry. Middle East and North America are the most attractive turfs for Global OEMs. High-speed Rail Market: Cumulative High Speed Rail Infrastructure Investments, Global, 2011-2020 $910.61billion Note: Chart In Center Shows Investments In High Speed Rail Infrastructure By 2020 In Each Region Turkey 54.73 ME Switzerland 107.08 $70 billion Sweden 1.80 Total global rail infrastructure 24 investment between 20102020 is 86.78 SA expected to be $910.61 billion. Spain 208 NA 97.53 This was total expected investment in HSR. Most of the Obama South Korea CanadaAPAC 45 1.23 government ‘s planned HSR was 70.65 166.31 APAC Russia Japan 16.25 voted against in November 2011 Portugal India 29.33 25.15 7.42 Poland Italy 17.80 Germany 9.88 GCC 24.65 55.00 Argentina US 342.44 EU China 37.65 137.35 128.33 MoroccoEU 25 Saudi 7.50 France 70.65 Arabia 11.10 Brazil Iran 49.13 33.48 2011 2011 to 2020 Europe Asia Pacific Middle East & Africa South America North America HSR is Note: All figures are rounded; the base year is 2010. Source: Frost & Sullivan analysis. currently South America, $87 SA operational EU Europe, $338 billion billion in EU and North America, $137 APAC NA billion markets APAC Asia Pacific, $166 billion Middle East & only ME Africa, $107 billion M77D-18 11
  12. 12. Global Passenger Travel Trends By 2050, every individual will travel about 6 km extra globally; high-speed public modes of transport will be the largest gainers—expected to increase by 20 percentage points. Rail Mega Trends: Population vs. Passenger Travel, Global, 2050 Global Passenger Km Travelled by Major Mode of 2000 and 2050 Transport Statistics 2000 2050 CAGR 105.7 billion PKT World 6.1 billion 9.3 billion 0.8% Population Each person will travel 5.9 extra km by 2050 PKT 33.3 billion 105.7 billion 2.3% Low Speed Public Transport 2000 Global Passenger Km Travelled by Major Mode of Transport 29% Private33.3 billion PKT Private Transport Transport 41% Source: Cambridge University 55% Low Speed Public Transport 35% High Speed 2000 High Speed Public 20% pts. Increase Public 2050 Transport Transport 10% In Modal Share 30% The relative importance of high-speed modes will rise from 10 percent to about 30 percent. PKT – Passenger kilometer trip Private Transport – Cars, motorcycles, SUVs Low-speed Public Transport – Bus, light rail, metro, mini vans Note: All figures are rounded; the base year is 2010. High-speed Public Transport – HSR, air travel, public rapid transit pods, Maglev, private jets Source: Frost & Sullivan analysis. M77D-18 12
  13. 13. Legal DisclaimerFrost & Sullivan takes no responsibility for any incorrect information supplied to us bymanufacturers or users. Quantitative market information is based primarily on interviewsand therefore is subject to fluctuation. Frost & Sullivan research services are limitedpublications containing valuable market information provided to a select group ofcustomers. Our customers acknowledge, when ordering or downloading, that Frost &Sullivan research services are for customers’ internal use and not for general publication ordisclosure to third parties. No part of this research service may be given, lent, resold, ordisclosed to noncustomers without written permission. Furthermore, no part may bereproduced, stored in a retrieval system, or transmitted in any form or by any means,electronic, mechanical, photocopying, recording or otherwise, without the permission of thepublisher.For information regarding permission, write to: Frost & Sullivan 331 E. Evelyn Ave. Suite 100 Mountain View, CA 94041M77D-18 13

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