Opportunity Analysis of the Eastern European Rail Market:
A 360-degree Perspective
Interoperability in Pan-European Contex...
2M8F3-13
Jagadeesh Chandran
Sr. Research Analyst
Automotive & Transportation
+91-44-66814058
jagadeeshc@frost.com
Sundar S...
3M8F3-13
Contents
Section Slide Number
Executive Summary 4
Research Scope, Objectives, Methodology, and Background 13
Defi...
4M8F3-13
Executive Summary
5M8F3-13
Executive Summary—Key Findings
Overall growth in the rail sector is bottlenecked by factors such as low funding a...
6M8F3-13
Rail Market: Expected Rail Infrastructure Investment by Country and Type, Eastern Europe, 2020
New Construction i...
7M8F3-13
Eastern Europe Invests Less in Rail Compared with Western Europe
All countries in Eastern Europe have to invest h...
8M8F3-13
Majority of Light Rail Service is Less Frequent on Older Trains
Severe shortage of fleet is causing a bottleneck,...
9M8F3-13
Competitive Benchmarking
LRV and electric locomotives are 2 of the most competitive segments in the region, where...
10M8F3-13
Light Rail Technology Roadmap
Rapid modernization in light rail light rolling stock is expected by 2020.
Light R...
11M8F3-13
Signalling Systems Technology Roadmap
Although there is increasing interest in upgrading to modern systems, impl...
12M8F3-13
Parameters Current Future
Market Status
• There has been a steady decline in
rail freight passenger volumes.
• I...
13M8F3-13
Research Scope, Objectives, Background, and
Methodology
14M8F3-13
Research Scope
Rail infrastructure, rolling stock, and signallingTopics Covered
2013 to 2020Forecast Period
2012...
15M8F3-13
Research Aim and Objectives
Aim
The objective of this study is to evaluate the growth opportunities and the curr...
16M8F3-13
Key Questions This Study Will Answer
Which are the leading rolling stock suppliers in the light rail, metro, and...
17M8F3-13
Research Background
This research study strengthens the coverage of the rail industry.
Year Study Code Existing ...
18M8F3-13
Research Methodology
Company Designation
PESA Manager, Marketing
PESA Sales Engineer
Siemens Transportation Mana...
19M8F3-13
Key OEM/Participant Groups Included in This Study
Groups OEMs/Divisions
Alstom Alstom Transportation
Bombardier ...
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Opportunity Analysis of the Eastern European Rail Market: A 360-degree Perspective

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Interoperability in Pan-European Context Driving Market Growth

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Opportunity Analysis of the Eastern European Rail Market: A 360-degree Perspective

  1. 1. Opportunity Analysis of the Eastern European Rail Market: A 360-degree Perspective Interoperability in Pan-European Context Driving Market Growth M8F3-13 June 2014 Czech Republic, Hungary, Romania, Poland, Ukraine
  2. 2. 2M8F3-13 Jagadeesh Chandran Sr. Research Analyst Automotive & Transportation +91-44-66814058 jagadeeshc@frost.com Sundar Shankaranarayanan Research Analyst Automotive & Transportation +91-44-66814171 sundars@frost.com Sandeep Kar Global Director, Commercial Vehicle Research Automotive & Transportation +1 416 490 7796 Sandeep.kar@frost.com Shyam Raman Research Analyst Automotive & Transportation +1 416 495 2686 Shyam.raman@frost.com Research Team Contributing Analyst Contributing Analyst Research DirectorLead Analyst
  3. 3. 3M8F3-13 Contents Section Slide Number Executive Summary 4 Research Scope, Objectives, Methodology, and Background 13 Definitions and Segmentation 20 General Rail Trends in Eastern Europe 23 Mega Trends and Industry Convergence Implications 34 External Challenges: Drivers and Restraints 38 Rail Track in Eastern Europe 44 Urban Rail in Eastern Europe 50 Mainline Rail Rolling Stock in Eastern Europe 61 Rail Signalling Systems in Eastern Europe 79 Conclusions 88 Appendix 92
  4. 4. 4M8F3-13 Executive Summary
  5. 5. 5M8F3-13 Executive Summary—Key Findings Overall growth in the rail sector is bottlenecked by factors such as low funding and low volumes. Between 2012 and 2020, the region will possess an approximately €33.00 billion worth opportunity for rail infrastructure development projects, with up to 70% of investment directed toward the upgrading of lines. 1 Severe shortage of fleet is causing a bottleneck; consequently, passenger volumes have suffered in Poland, Ukraine, and Romania.3 There are approximately 13,000 locomotives in active service, However, the number has decreased significantly over the last decade. Electric locomotives represent approximately 40% of the total locomotives in every country of the region. 4 The decline of passengers and freight traffic has resulted in a decline over the past decade in the number of wagons and passenger coaches. Even with new deliveries, the total number of wagons and coaches in active service is expected to decrease by 2.1% and 2.7%, respectively. 5 2 With a combined total of 21,770 km of track length already electrified, Czech Republic and Ukraine account for 86% of growth of electrified lines in the previous decade. Although the European signalling systems market is highly monopolized, the Eastern European rail signalling market has a strong presence of smaller local companies, such as as Funkwerk and Scheidt & Bachmann, Kombud Radom, AŽD Praha, and GANZ Trans Electro. 6 Source: Frost & Sullivan
  6. 6. 6M8F3-13 Rail Market: Expected Rail Infrastructure Investment by Country and Type, Eastern Europe, 2020 New Construction is 21.4% of Total Investment The majority of rail spend is expected to go toward upgrading infrastructure. Total rail network lengths and rolling stock in installed fleets are expected to decrease as rail operations become leaner and more efficient. 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 Poland Romania Hungary Czech Republic Ukraine RailInfrastructureInvestments(€Million) New rail construction Rail upgrade Development of intermodal nodes €32.72 billion 21.4% 68.8% 9.8% Mainly Warsaw, Gdansk, Katowice, Poznan, and Bialystok nodes, optimization efforts, and high-speed development Primarily line double- tracking efforts on Kiev- Crimea connection New line development under TEN-T PP 22 between Sighişoara and Gurasada Total Investment by 2020 Note: Development of intermodal nodes includes new stations, interchanging terminals, storage space, appropriate controlling and monitoring systems. Country Source: Frost & Sullivan
  7. 7. 7M8F3-13 Eastern Europe Invests Less in Rail Compared with Western Europe All countries in Eastern Europe have to invest heavily to increase competitiveness of rail and remain sustainable. 0 20 40 60 80 100 120 140 160 180 200 0.0% 0.1% 0.2% 0.3% 0.4% 0.5% 0.6% 0.7% 0.8% RailInfrastructureExpenditure per1kmofLines(€‘000) Rail Infrastructure Expenditures as a % of GDP Slovakia Czech Republic Hungary Poland Romania Ukraine Austria Germany Russia France • Ukraine and Romania have been heavily under-investing in railway infrastructure. • Poland, Czech Republic, and Hungary have to make the least effort to bring investments to levels comparable to France, Germany, and Russia. • Ukraine, Poland, and Romania have to make at least 3 times more effort (as a percentage of gross domestic product [GDP]) for investment to be comparable to levels of France and Germany. Rail Market: Investment in Rail Infrastructure as a Function of Rail Network Length and GDP, Eastern Europe, 2012 Source: Frost & Sullivan
  8. 8. 8M8F3-13 Majority of Light Rail Service is Less Frequent on Older Trains Severe shortage of fleet is causing a bottleneck, and consequently passenger volumes suffer in Poland, Ukraine, and Romania. 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 NumberofRollingStockperkmofLine Average Age of Fleet (Years) Poland Ukraine Hungary Czech Republic Romania Newer, fewer trains Newer, more trains Older, fewer trains Older, more trains Rail Market: Number of Rolling Stock per Km and Average Age of Fleet, Eastern Europe, 2012 • Ukraine and Romania have a fleet that is severely old and lacking in numbers. • Poland’s rolling stock is moderately aged, and recent purchases have reduced the average ages of fleets. • Czech Republic and Hungary both have more rolling stock per kilometer with a relatively younger fleet. A B C Source: Frost & Sullivan
  9. 9. 9M8F3-13 Competitive Benchmarking LRV and electric locomotives are 2 of the most competitive segments in the region, where competition will only intensify. Manufacturer Light Rail Metro High- speed EMUs EMUs/ DMUs Diesel Loco- motives Electric Loco- motives Pragoimex, Inekon, Protram, Solaris, Moderus, HCP, Astra Skoda Pesa Alstom Siemens Bombardier TMH CAF Newag Stadler CMSK, Remarul Softronic, DEVZ, Electropure, TEVZ Skoda and Pesa are considering expanding into the locomotive business. Siemens and Bombardier are the only companies with more than 10% in 3 segments. < 10% ~ 50% ~ 100% ~ 75% potential entries ~ 25% Rail Market: Rolling Stock Competitor Benchmarking, Eastern Europe, 2012 Source: Frost & Sullivan
  10. 10. 10M8F3-13 Light Rail Technology Roadmap Rapid modernization in light rail light rolling stock is expected by 2020. Light Rail Technology Roadmap, Eastern Europe, 2012–2020 Wider Operational Range Energyand CostEfficiency Improved Comfort 2012 2014 2016 2018 Line of sight Radio infrastructure in wayside GPS-based control of traffic signals Aluminum and stainless steel bodies, composites to reduce weight Broadband wireless connectivity to control center, real-time CCTV and monitoring Electro-pneumatic friction brakes blended with electric regenerative braking, anti-skid valves, brushless 3-phase induction motors, VVVF control Jacobs Bogie that allows for 100% low floors Catenary-free and induction-based power transmission Supercapacitors enable pantographless inter-stop tram propulsion Air conditioning LCD displays, mobile applications Wider doors 2020 Panoramic windows Source: Frost & Sullivan
  11. 11. 11M8F3-13 Signalling Systems Technology Roadmap Although there is increasing interest in upgrading to modern systems, implementation of ETCS is expected to develop only after 2020. Signalling Systems Technology Roadmap, Eastern Europe, 2012–2020 Intensified competition on the market Rail vehicles operating on ERTMS lines to be equipped with OBU More complex systems covering bigger areas High requirements for system safety and reliability Increasing length of the rail network equipped with ERTMS systems across CEEC Improved quality of traffic surveillance Diagnostic equipment with highly reliable installation Increasing coverage of GSM-R across CEEC Demand on detectors with centralized supervision Interlocking Systems TrainControl Systems Wayside Equipment,Train Detection,and RM&D Aging infrastructure and outdated interlocking systems ready for replacement Move toward computer-based interlocking Increasing need to adopt common technical specifications for unified interlocking across Europe ERTMS Level 1 under construction ERTMS Level 2 implementation ERTMS Level 3 implementation Diminishing demand on trackside signalling 2012 2014 2016 2018 2020 Source: Frost & Sullivan
  12. 12. 12M8F3-13 Parameters Current Future Market Status • There has been a steady decline in rail freight passenger volumes. • Increased investment, retirement of aged fleets, and the operation of new fleets is expected to increase rail traffic volumes. Competition • Competition is largely between local manufacturers and technology providers. • Global leaders such as Siemens, Bombardier have entered the market by acquiring companies like PaFaWag and CKD Tatra. Solutions • The average age of all rolling stock is more than 20 years in active service. • The majority of signalling systems are based on outdated mechanical interlocking. • Refurbishment is expected to be the major method of extending service life of rolling stock, compared with new fleet acquisition. • Computer-based interlocking (CBI) is expected to become the standard for preparing for ETCS. Barriers to Entering Eastern European Market • Local manufacturers are favored in the procurement process. • Current regulations are biased toward a closed market. • The acquiring of local companies allows foreasier entry of global manufacturers. Executive Summary—Key Findings and Future Outlook The Eastern European rail market is expected to provide tremendous opportunities in terms of volume after 2020. Increased funding from EU for priority rail projects is expected to drive volumes and private investment. Source: Frost & Sullivan
  13. 13. 13M8F3-13 Research Scope, Objectives, Background, and Methodology
  14. 14. 14M8F3-13 Research Scope Rail infrastructure, rolling stock, and signallingTopics Covered 2013 to 2020Forecast Period 2012 to 2020Study Period 2012Base Year Geographical Regions The following regional market is covered in this research service: • Poland • The Czech Republic • Hungary • Romania • Ukraine Poland Ukraine Czech Republic Hungary Romania Source: Frost & Sullivan
  15. 15. 15M8F3-13 Research Aim and Objectives Aim The objective of this study is to evaluate the growth opportunities and the current market scenario of the Eastern European rail market. The study offers a strategic market-sizing forecast for investment in rail infrastructure; forecast of rail volumes; analysis of light rail, metro, and mainline rolling stock segments, including market drivers and restraints; and market-share analysis of the above-mentioned segments. Objectives • To provide a strategic overview of the rail market in Eastern Europe • To provide the market size and forecast of rolling stock deliveries for the mainline, light rail, and metro, segments, with breakdown, from 2012 to 2020 • To analyze competitive factors, competitor market shares, product portfolio, and capabilities Source: Frost & Sullivan
  16. 16. 16M8F3-13 Key Questions This Study Will Answer Which are the leading rolling stock suppliers in the light rail, metro, and mainline segments in Eastern Europe? Where are the new opportunities in rolling stock and signalling for rail? What is the market share of the rolling stock in rail applications? What are the market leaders across each rolling stock segment in Eastern Europe? What is the business environment of the Eastern European rail market? What are its market dynamics? Rail Market: Key Questions This Study Will Answer, Eastern Europe, 2013–2020 Source: Frost & Sullivan
  17. 17. 17M8F3-13 Research Background This research study strengthens the coverage of the rail industry. Year Study Code Existing Research Title Regional Scope 2013 M957-13 Rail Outlook Study 2013–2022 Global 2013 M663-18 Strategic Analysis of the European and North American Rail Infotainment Market Europe + NA 2013 P712-18 Transportation Modal Shift in India and Impact on Rail Logistics India 2012 NA5E-18 Strategic Analysis of the Global Market for Bus Rapid Transit Systems (BRT) Global 2012 M8BF-18 Future of Mobility—New Business Models, Opportunities, and Market Entrants in Mobility Integration Europe 2012 9832-00-2C Strategic Analysis of Passenger Safety for Urban Rail in Malaysia APAC 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 9823-00-2A Strategic Insight on the GCC Rail Sector ME 2011 N92D-18 An Executive Analysis on Passenger Rolling Stock Market in the United States: A Demand Analysis for Passenger Rolling Stock and Seating Systems US 2011 P488-01 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 Source: Frost & Sullivan
  18. 18. 18M8F3-13 Research Methodology Company Designation PESA Manager, Marketing PESA Sales Engineer Siemens Transportation Manager, Marketing Protrams Marketing Executive PKP Intercity Sales Manager Skoda Transportation Marketing Executive CNR Tangshan Railway Vehicle Manager, Marketing Ukrainian Railways Manager, Administration PKP Cargo Manager, Service Hungarian State Railways Manager, Maintenance Bombardier Transportation Manager, After-sales Solaris Trams Manager, Sales Transmashholding Manager, Marketing Alstom Transportation Manager, Technology Research Methodology: Frost & Sullivan’s research services are based on secondary and primary research data. • Secondary Research: Researchers extracted information from existing reports and project material within the Frost & Sullivan database to include data and information gathered from technical papers, specialized magazines, seminars, and Internet research. • Primary Research: More than 10 interviews were conducted over the phone by senior consultants/industry analysts with original equipment suppliers, regulation authorities, and distributors. Primary research accounts for 80.0% of the total research. Rail Market: Partial List of Industry Participants, Eastern Europe, 2012 Source: Frost & Sullivan
  19. 19. 19M8F3-13 Key OEM/Participant Groups Included in This Study Groups OEMs/Divisions Alstom Alstom Transportation Bombardier Bombardier Transportation Siemens Siemens Mobility PESA Pojazdy Szynowe PESA Bydgoszcz Solaris Solaris Bus & Coach SA Skoda Škoda Transportation a.s. Inekon Inekon Trams a.s. Pragoimex Pragoimex Trams a.s Protram Remonty i Modernizacja Tramwajów Protram Wrocław Sp. z o.o The following OEM groups and companies are compared in this study: Source: Frost & Sullivan

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