Global High Speed Rail Market on the Fast Track for Business Development


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An analysis by Franck Leveque and Donald Ivan, Frost & Sullivan.

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Global High Speed Rail Market on the Fast Track for Business Development

  1. 1. Global High Speed Rail Market on the Fast Track for Business Development Franck Leveque, VP Growth Consulting Donald Ivan, Industry Analyst Automotive & Transportation 13 April 2011
  2. 2. Today’s Presenter: Franck Leveque Functional Expertise • Over 10 years of consulting experience, especially automotive market research and market strategy development. Specific expertise in: • Qualitative and quantitative market analysis – B2B & B2C • Market modelling & forecasting • Benchmarking & positioning • Diversification and new market entry • Innovation and product development • Business & market strategy • Business plan development Industry Expertise Experience base covers a wide range of industry sectors, forming long standing relationships with senior executives in the Automotive & Transportation: Telematics (PV & CV), Powertrain (incl. EV) and involvement in Chassis, Safety, Driver Assistance, Aftermarket, Mobility (Rail & Urban Transport) Franck Leveque Industrial Automation & Electronics: Automation Solutions (PLC, DCS, MES), Welding, Pneumatics, Motors & Vice President Growth Drives, Security. Consulting What I bring to the Team • Market & Business Consulting Delivery – Common sense & business acumen Frost & Sullivan • Consulting Project Management – Experience in complex international projects Germany • Strategy & Business Planning – Fact based high impact recommendations Frankfurt am Main • Team Management & Leadership – Structured and directive • Consultative Business Development – Client objective orientated Career Highlights • Instrumental in the development of Frost & Sullivan Automotive practice in Europe • Key member of the strategic global growth consulting team Education • Languages: English, French, • Bachelor Degree (Hon) – Oxford (UK) 2
  3. 3. Agenda 1. Global Trends and HighlightsGlobal High Speed Rail Market 2. Demand Analysis – Track Infrastructure and Rolling Stock 3. Roadmap of High Speed Rail Technologies 4. Case Study – Impact of HSR on Evolving Megacities 5. Competitive Landscape 6. Key Conclusions 3
  4. 4. Three Main Trends in UrbanizationDevelopment of Mega Cities, Mega Regions and Mega Corridors Evolution of Megacities: Three Main Urbanization Trend (Global), 1950 - 2025 MEGACITY MEGA REGIONS MEGA CORRIDORS City With A Minimum Megacities combining Transport corridors Population Of 10 with adjacent cities to connecting two or more Million form mega regions major cities or mega regions EXAMPLE: London, (Population over 15 Istanbul Million) EXAMPLE: Hong Kong- Shenzhen-Guangzhou in EXAMPLE: “Jo-Toria” China (Population 120 (Johannesburg/Pretoria Million) and Gauteng region) Source: Frost & Sullivan 4
  5. 5. PESTLE Factors Driving High Speed Rail Projects - Governments across the globeare actively involved in promoting faster, convenient and greener mode oftransportation European and Asian Legislations: OEMs are actively Government and working towards Organisations Push bidding international projects Investment in Transport Multi Modal Transit Infrastructure Centers Projects HSR competing with Social Trends: Low Cost budget Consumer airlines for short- Preference for HSR: medium haul Safety, Comfort, Convenience Governments Evolution of campaigning for megacities place greener mode of increased demand for transport inter-city travel 5
  6. 6. Regional attractiveness for HSR growth: Europe is the most attractivemarket despite higher penetration of HSR network High-Speed Rail Market: Regional Analysis for future growth (Global), 2010 5 Penetration Potential 4 3 Passenger Adaptability 2 1 0 Funding Availability Technical Expertise Government Policies North Amrica Europe Middle East & Africa Asia Pacific South America Investments between 2010-2020 (%) Region Infrastructure Rolling Stock Europe 40% 54% Asia Pacific 20% 19% Middle East & Africa 13% 11% South America 12% 9% North America 15% 7% 6
  7. 7. Global High Speed Rail Existing, Under-construction and Planned, 2010 High-Speed Rail Market: Network Planned and Under construction (Global), 2010 50148 Km 25000 20000 The HSR market is South America 14,213 Km expected to grow at a CAGR of 13.4% Middle East & Africa 9524 3979 between 2010 to 15000 2020. North AmericaAPAC 6326 Asia Pacific 10000 4015 Europe 5000 6515 7698 2417 4084EU 5494 2200 1310 0 2010 Europe Asia Pacific North America Middle East & Africa South America 2020 In Operation Under Construction Planned • Over 60% of new High Speed development will take place in Europe and Asia. • Though North America has a vision to build over 27,000 kms of high speed rail network, only approx 5500 kms of network will be true high speed (>250 kmph) by 2020. 7
  8. 8. Demand Analysis: About 46% of rolling stock investment is to happen in Europe followed by Asia Pacific (16%) High-Speed Rail Market: Goal post on new Rolling Stock demand (Global), 2010-2020 64,332 6425 ME Turkey 3284 139 South Korea Switzerland 5207 108 SA Sweden 1125 1994 Japan Over the next 10 years 3434 China and Spain NA 842 India combined will invest 7,333 Spain approx $17 Billion on 5852 17,515 rolling stock procurement APACAPAC Russia 975 5075 Portugal 1509 Poland 14544 1068 China Italy 593 Germany 1479 31,751 GCC 3300 2259 EU Argentina Morocco EU Saudi Arabia 450 France 666 2258 4239 Brazil USA 3434 Iran 2948 2009 2011 Europe Asia Pacific Middle East & Africa South America North America 2011 to 2020 *Note: Figures are cumulative SA South EU Europe, 31,751 America, 5,207 NA North America, 3,434 Note: All figures are rounded, the APAC Asia Pacific, 17,515 Middle East & base year is 2010 Source: ME Frost & Sullivan Africa, 6,425 8
  9. 9. Roadmap of High Speed Rail Technologies: There will be global uniformityin signaling and rolling stock systems used by 2020 Global Outlook: Key Technologies (Global), 2005 - 2020 Push Pull locomotive Rolling Stock Distributed Traction Technology Tilting train Technology Magnetic levitation (driverless systems) Dynamic Braking Regenerative Braking Increasing length of the rail network equipped with ERTMS systems across Europe Train Control Systems Europe ERTMS Level 1 . ERTMS Level 2 ERTMS Level 3 Asia China - CTCS 2 China -CTCS 3 Japan - DS-ATC 25kV AC Infrastructure 15kV Dedicated and completely new track network for High Speed Track Upgrade and network sharing Source: Frost & Sullivan 2005 2010 2015 2020 9
  10. 10. Rolling stock technology trends: While Europe, APAC and ME will movetowards distributed traction, The Americas will find Push-Pull more suitable Existing Markets 2010 Europe 2020 2010 Asia Pacific 2020 22% 17% 28% 45% 55% 78% 72% 83% Emerging Markets 2010 Middle East 2020 2010 South America 2020 & Africa 7% 28% NIL NIL 72% 93% 2010 North America 2020 40% NIL Distributed Traction 60% Push-Pull Source: Frost & Sullivan 10
  11. 11. Case Study: Point to Point connectivity coupled with increased safety and highercomfort levels will be reasons for a tremendous shift of passenger travel from aviationto high speed rail Comparison of flight time & time taken by AVE to Seville Modal Shift in Passenger traffic after HSR installation: Madrid to Seville 84% 87% 67% Flying Time 50 mins – 1 hr Airport transportation, security, and check-in easily triple that figure (point A to B - 2hrs 30 mins) 33% 16% 13% Plane Rail 1991 (Pre HSR) 1994 (Post 2020 (Forecast) HSR HSR) Madrid Seville Passenger profile : Madrid Seville (AVE) *includes point to point travel time from Passenger type Share city center to airport and vice versa 2hrs 15 mins Holiday 54% Growth @ 14.9% Madrid’s Urban Population Seville’s Urban Population (2010) 5.7 million (2010) 0.75 million Business 18% Visiting 16% Family/Friends Miscellaneous 12% Source: Frost & Sullivan 11
  12. 12. The growth of high speed rail across regions fuels growth of othersupport like internet broadband & hospitality • Wireless fidelity connected to high speed internet enables passengers to be connected to their smart devices en-route • Unified Ticket solutions like magnetic smart• Cheaper parking slots at public transit card that can be used in all modes of mass stations allow passengers to park cars transport and board trains PAX Info & E check in Internet shopping Commute Car Rentals Duty Free Smart transport• Promotes business & trade within station premises HSR Station of Station of Departure Arrival Food courts Hotels & Dorms • Food courts enhances • Enhances tourism hospitality, create jobs and generates Increases holding revenue for the stations capacity of city Source: Frost & Sullivan 12
  13. 13. Global presence of OEMs: The European majors such as Alstom,Bombardier and Siemens have the maximum footprint across the globe andconstitute 65% of the global rolling stock market Regional Players Consortium confined mainly CAF of CRH and to Japan and Talgo Siemens East Asia Kinki Sharyo Nippon Sharyo 2010 2020 Hitachi 3% Others Hyundai Rotem Others Alstom 5% 30% Siemens 35% Alstom AnsaldoBreda Shinkansen CRH 10% 2020 Alstom 32% 18% Kawasaki heavy Industries 16% 21% Siemens Bombardier 14% Siemens 16% CSR Sifang Shinkansen CRH Bombardier - Talgo Source: Frost & Sullivan. Bombardier - Talgo 13
  14. 14. Key Conclusions: High Speed Rail will be the most favoured transportinvestment across regions in the next 10 years Europe With an investment of $338 billion on infrastructure and $35 billion on rolling stock, Europe will lead the HSR development wave over the next 10 years. Distributed traction technology with speeds > 300 kmph to become the norm across Europe Asia Pacific Asia to be the second largest market for High speed with market size potential of $172 billion between 2010 and 2020. Chinese CRH has gained expertise to function indigenously and will be a significant competitor to the established European majors. The Americas Given the topography and operating requirements, push pull locomotives will be the most preferred HSR technology in the Americas Approx $137 billion and $4 billion will be spent on rail infrastructure and rolling stock respectively over the next 10 years in the U.S. 14
  15. 15. GIL London – The Global Community of Growth, Innovation and Leadership Growth, Innovation & Leadership Congress 17-18 May 2011 - Emirates Stadium, London Opportunity to network with Senior C-Level Executives across 7 industries including: Chemicals & Materials, Automotive & Transportation, Aerospace, Defence & Security, Energy & Environment, Healthcare, Automation & Electronics, Information &Transportation Track set to address: Communication Technologies• From High-Speed to High Convergence:Future Perspectives of Point-to-Point Mobility Through think tanks, interactive sessions and presentations focussed• Making the Connection: Vision for a Fully around the topics of Growth, Innovation & Leadership participants gainIntegrated and Smart Mobility Solutions fresh perspectives, ideas and solutions to todays burning business challenges• Development of Hybrid and Electric Buses for and opportunities.Public Transportation A Transportation Track includes discussions on "Integrated & Smart MobilitySpeakers include: Solutions" as well as "Development of Hybrid and Electric Buses for Public• Senior Executives across ten Industry Transportation". tracks• Martin Ertl, Chief Innovation Officer, Bombardier Transportation• John Rushton, Global Business Development Leader, Intelligent Transport Services, Global Technology Services, IBM• Mihai Dorobantu, Senior Manager, Vehicle Technologies & Innovation Group, Eaton 15
  16. 16. Rail Industry: Existing and Forthcoming Research 2011 Strategic Analysis of the Global High Speed Rail Market WIP 2011 Strategic Analysis of the European Rail Infotainment Market WIP 2011 Strategic Analysis of Rail Alternative Power-train Market in Europe WIP 2011 Strategic Analysis of Rail Alternative Power-train Market in N.A WIP • Global Rail Market • Rail ITS 2011 Growth Opportunities in Urban Rail Transportation • Rail Passenger Information 2011 Opportunity Analysis for Contactless Ticketing Systems in Europe • Entertainment and Passenger 2011 Opportunity Analysis in the Passenger Rail Interiors Market Communication• In-train entertainment 2011 Strategic Analysis of the European Rail Telecommunications Market systems 2011 Executive Analysis of the American Passenger Rolling Stock Market 2009 Strategic Analysis of the European Rail Electrification Market Strategic Analysis of the European Light Rail and Underground Market - Part 2: Market 2009 Engineering Measurements 2009 Strategic Analysis of the Growth Opportunities in the Indian Rail Industry Strategic Opportunity Analysis of the Russian Rail Market: Implication for the Global Supply 2009 Chain Existing Strategic Analysis of the European Light Rail & Underground Market - Part 3: Competitive Forthcoming 2008 Environment Analysis 16
  17. 17. Next Steps Request a proposal for Growth Partnership Services or Growth Consulting Services to support you and your team to accelerate the growth of your company. ( Join us at our annual Growth, Innovation, and Leadership 2011: A Frost & Sullivan Global Congress on Corporate Growth occurring in London on 17 – 18 May 2011. ( Register for Frost & Sullivan’s Growth Opportunity Newsletter and keep abreast of innovative growth opportunities ( 17
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  20. 20. For Additional InformationKatja Feick Cyril CromierCorporate Communications Sales DirectorAutomotive & Transportation Automotive & Transportation Europe+49 (0) 69 7703343 +33 1 42 81 22 Cyril.cromier@frost.comFranck Leveque Donald IvanVice President - Growth ConsultingAutomotive & Transportation Europe Industry Analyst+49 (0)69 770 33 21 Automotive & Transportation EuropeBb: +49 (0)151 27 67 08 24 +91 44 20