The rail supply industry remains on track and is expected to continue growing steadily over the next six years!

Transcription

1 A. Executive summary The rail supply industry remains on track and is expected to continue growing steadily over the next six years! Conducted for the fourth time, UNIFE s World Rail Market Study 2012 reveals that the industry is successfully navigating the economic downturn witnessed at the end of the last decade. Order intakes have remained constant across its product segments. The study also points to a positive outlook for the future. Spurred on by favourable conditions, the attractiveness of rail as a mode of transportation is continuing to gain ground: As the global population grows, the trend towards urbanisation remains unbroken and metropolitan areas are becoming increasingly congested. All of which necessitates modern mass transit solutions a segment that is predestined for rail transportation. The general need for mobility is likewise rising for both passenger and freight transportation. In addition efficiency and cost effectiveness issues are growing in importance as fossil fuels become more scarce and hence more expensive year after year. Accordingly, numerous current political and economic initiatives to encourage more resource-friendly transportation modes are favouring rail transportation as an efficient but also environmentally friendly option. To cite just one of many examples: In its recent Transport White Paper, the European Commission laid out a roadmap of 40 initiatives in order to implement a competitive transport system within the next decade. Its main intentions are to increase mobility, fuel growth and increase employment while at the same time achieving a reduction on Europe s dependence on imported oil and cutting carbon emissions in transport by 60% by To achieve this, the Commission relies on rail as environmentally friendly and efficient transportation mode and it is aiming, amongst others, to shift 50% of medium-distance intercity passenger and freight travel from road to either rail or waterborne modes by As one expert succinctly puts it: The overall environment for railways and the rail supply industry is favourable. Robust growth in market volumes and the installed base in recent years Since the last UNIFE World Rail Market Study was published two years ago, the global rail supply market has grown steadily. The total annual market volume averaged around EUR 146 billion for the years , equivalent to a compound annual growth rate (CAGR) of 3.4 % compared to the average annual market volumes for As shown in figure 1, the services and rolling stock markets account for the majority of the market, representing approximately 71 % of the total market volume. 5 1

2 Figure 1: Current total annual volumes for the rail supply market [EUR m] 1) Ever since publication of the 2010 UNIFE World Rail Market Study, the infrastructure and rolling stock segments experienced the strongest growth in absolute terms. Conversely, relative growth rates were strongest in the market volumes for integrated projects and rail control, as shown in figure 2: Figure 2: Growth in total annual market volumes and comparison of product segments 2) 1) Rounding differences apply; rail control market volumes do not include fare management systems 2) Fare management not included in rail control data 6 2

3 Despite the recent economic crisis, countries have added rolling stock and infrastructure kilometres to their installed base. This development has been observed in both the interurban and urban segments. Alongside significant growth in very high speed (VHS) trains, urban units too have experienced considerable growth. This development underscores the trend in larger cities and metropolitan areas to install new urban rail transportation systems and/or extend existing ones, as shown in figure 3: Figure 3: Growth in the installed base (urban rolling stock) compared to the UNIFE 2010 study Rail transportation is resilient to business cycles The rail supply industry has significantly outgrown the world economy, seeing its share of global GDP rise from 0.31 % in 2004 to 0.38 % in Demand for passenger rail services was scarcely affected by the recent economic downturn. Accordingly, market volumes driven by orders for new rolling stock and infrastructure and, subsequently, by orders for the servicing of these new assets have suffered only in the freight segment, mainly in some parts of Europe. To take just one example: while GDP declined by more than 4 % during the financial and economic crises in 2009, the passenger transport volume decreased by only 0.5 %. Rail transportation has thus proven to be an attractive alternative in times of economic uncertainty. At the same time, countries less affected by the economic downturn have seen rail transportation as the (literal) vehicle of choice to invest in and modernise their transportation infrastructures

4 In addition to the overall positive conditions for rail transportation referred to above (e. g. ongoing urbanisation and the scarcity of fossil fuels), a further stabilizing factor is the prevalence of public/government support for railways (especially for regional and urban passenger transportation) in many countries. Much of this public support is bound up in long-term contracts (some of which run for over 15 years). This means that funding for additional orders and further extension of both rail infrastructures and rolling stock will remain available for the foreseeable future. One significant drawback is that value-added tax (VAT) is still charged on rail services in Europe, whereas other modes such as air and sea transportation are taxed either not at all or only at lower levels. This distortion of competition to the disadvantage of rail transportation is yet to be resolved. Positive outlook Latin America and the Middle East growing strongly Going forward, the worldwide market for rail supply is set to maintain its growth trajectory. A growth rate of 2.6 % per annum is forecast for the next six years, leading to a total market volume of just under EUR 170 billion per annum by Figure 4: Future development in the global rail supply market [EUR m] 1) 1) Compound annual growth rate compared to

5 The growth markets of the recent past essentially, countries in the Asia and Pacific region will continue to play a strong role. Rapid growth in the past has firmly established this region as a main pillar of the global rail supply market. However, as the significance and advantages of rail transportation attain greater prominence in other countries, more fast-growing markets for rail supply are now emerging too. Latin America (particularly Brazil), the Middle East and parts of Africa are the stand-out regions on this score, as shown in figure 5. Figure 5: Regional growth rates in the rail supply market [CAGR compared to ] 1) The new UNIFE study therefore concludes that the rail supply market will continue to experience robust demand as mature regions such as Western Europe and NAFTA are flanked by continued progress in the maturing Asia and Pacific region and further supplemented by additional emerging markets in Latin America and the Middle East. 1) Percentage figures are average of a +/- 0.5 percentage point range 9 5

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