2016

WORLDWIDE MARKET FOR RAILWAY INDUSTRIES

Market Volumes for OEM Business and After-Sales

Service as well as Prospects for Market Developments of Infrastructure and Rolling Stock

WORLDWIDE MARKET FOR RAILWAY INDUSTRIES

Market Volumes for OEM Business and After-Sales Service as well as Prospects for Market Developments of Infrastructure and Rolling Stock Coinciding with InnoTrans 2016 the new MultiClient study “Worldwide Market for Railway Industries” informs railway clients about the current status of both the infrastructure and the rolling stock markets as well as about the future development in all world regions. Every second year, SCI Verkehr publishes the MultiClient study “Worldwide Market for Railway Industries”, which summarises the main content of more than 20 in-depth studies of different railway industry segments. As basis for specialised strategic consultancy for railway companies and the railway industry, SCI Verkehr conducts ‘bottom-up’ analyses of all relevant product segments. An extensive database, developed in-house, allows SCI Verkehr to analyse business segments, market regions, and even single country markets. Thanks to the project-based data collection, the database also provides input for a detailed analysis of OEM and After-Sales markets. SCI Verkehr has enhanced its methodologies over the years and is e.g. able to build its prognosis based on real age structures of fleets. In concrete terms, the study includes:

– An overview of the market development of the worldwide market for railway industries, subdivided into world market regions and product segments

– Structure and development of the global railway technology market in Western and Eastern Europe, North and South America, Asia, Australia/Pacific, the CIS and Africa/Middle East

– Size of the market, market development and future procurement potential for the product segments infrastructure, system technology and rolling stock until 2020

– List of infrastructure stocks and fleets for the main countries and operators and important vehicle and infrastructure projects in the period from 2011 to 2015

The study is available in English from September 2016. SCI Verkehr GmbH is an independent consultancy company specialising in the markets and economics of transport. We have close connections to the rail industry, with consultants in a wide range of specialist fields. We have an extensive network of experts in Germany and abroad and we specialise in market and strategy issues for the mobility sector. Our activities focus on companies in the transport and rail industry, logistics, public and private transport companies and transport and economics departments in public administrations at national, regional and municipal levels. Your contact Ann Kathrin Arntz Head of Marketing and Sales Phone: +49 221 93178 20 Fax: +49 221 93178 78 Email: a.arntz@sci.de

CONTENTS

1 Executive Summary: Worldwide Market for Railway Industries 16

1.1 Market environment/transport market 20

1.2 Market Development by Segment 24

1.3 Market Development in the Regions/Countries 27

1.4 Development of the Manufacturer Landscape 31

2 Objective of the Study and Delimitation of the Railway Market 33

2.1 Objective of the Market Analysis 33

2.2 Delimitation of the Rail Market 34

3 Market Analysis Methodology 38

3.1 SCI Forecasting Tool 38

3.2 Railway Infrastructure/ Systems Technology Forecast 40

3.3 After-Sales Market Forecast 41

3.4 Analysis of Drivers in the Railway Industries Market 42

4 Characteristics and Transport Development in the World Market Regions 45

4.1 Western Europe 45

4.2 Eastern Europe 55

4.3 North America 62

4.4 South and Central America 69

4.5 Asia 76

4.6 Commonwealth of Independent States (CIS) 83

4.7 Africa/Middle East 89

4.8 Australia/Pacific 96

5 The Market for Infrastructure 101

5.1 Track Systems 101

5.2 Electrification 111

6 The Market for Systems Technology 119

6.1 Control Command and Signalling 119

6.2 Passenger Information Technology (PIT) 127

7 The Market for Rolling Stock 133

7.1 Electric Locomotives 133

7.2 Diesel locomotives 143

7.3 High-speed Trains 151

7.4 Electric Multiple Units 159

7.5 Diesel Multiple Units 167

7.6 Passenger Coaches 174

7.7 Freight Wagons 185

7.8 Light Rail Vehicles 196

7.9 Metro Vehicles 204

ANNEX

Figures Detailing Infrastructure and Fleets in the Individual Regions

1 Western Europe 212

2 Eastern Europe 224

3 North America 236

4 South America 248

5 Asia 259

6 CIS 271

7 Africa 283

8 Australia 295

4 Characteristics and Transport Development in the World Market Regions

4.7 Africa/Middle East (excerpt)

The railway market is very heterogeneous in the region of Africa/Middle East. The African railway market is largely characterised by economically underdeveloped areas with poorly developed and outdated railway infrastructure. In the Middle East, some new development projects are being implemented in the field of mainline railway and urban rail transport. Important countries for rail transport primarily are South Africa, Saudi Arabia and Iran. In this market analysis, SCI Verkehr differentiates five sub-regions with four core countries in Africa/Middle East.

Sub-region Country

Middle East Bahrain, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Palestine, Qatar, Saudi Arabia, Syria, United Arab Emirates, Yemen

Northern Africa Algeria, Egypt, Libya, Morocco, Tunisia

Sub-Saharan Africa

Benin, Burkina Faso, Burundi, Cameroon, Central African Republic, Chad, Republic of Congo, Côte d'Ivoire, Djibouti, Equatorial Guinea, Eritrea, Ethiopia, Gabon, Gambia, Ghana, Guinea, Guinea-Bissau, Kenya, Liberia, Mali, Mauritania, Niger, Nigeria, Rwanda, Senegal, Sierra Leone,

Somalia, South Sudan, Sudan, Togo, Uganda

South Africa Lesotho, South Africa, Swaziland

Southern Africa Angola, Botswana, Democratic Republic of Congo, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Tanzania, Zambia, Zimbabwe

© SCI Verkehr GmbH

4.7.1 Political and Socio-economic Drivers

The markets on the African continent and the Middle East are largely characterised by an unstable political situation. This can hinder economic development and growth of national income at low levels in many countries. Other relevant factors include lack of access to capital markets as well as inefficient state bodies. The creditworthiness index in this region is very poor and highlights the lack of financial power to maintain and upgrade the predominantly outdated infrastructure in a number of countries.

Stability of the political system

Creditworthiness index [0 - 100] National debts [% GDP] Ease of Doing Business Rank

49.8 37.8 109

© SCI Verkehr GmbH

The lack of legal and institutional security means that, despite the low labour cost level and the geographical proximity to Europe, Africa is not attractive as an industrial location. However, there is a much better situation for investors in the Middle East. Due to income from the petroleum industry, the countries in the Gulf region enjoy considerable financial scope and are very active in foreign trade. Since 2015, however, this financial power has been undermined by the strong decline of oil prices in international markets.

Economic power and economic growth 2015

GDP [USD billion]

GDP per capita in

PPP[USD] Real economic growth up to

2020 [% p.a.] Inflation

[%]

x xxx x xxx +x.x +x.x

© SCI Verkehr GmbH

Economic performance varies from country to country and reflects local levels of development, availability of raw materials and political stability. The overall market region shows great potential for growth. Slower growth regarding raw material in recent years, however, has contributed to a less dynamic development of the region, putting some transport projects temporarily at risk. Nevertheless, SCI Verkehr expects demand for transport to growth in the long run.

Demographic structure and development in Africa/Middle East 2015

Population

[million]

Population growth by 2020 [% p.a.]

Degree of urbanisation

[% urban population]

1 357 +x.x xx

© SCI Verkehr GmbH

The urgent need to upgrade and modernise the transport infrastructure will increase further due to the high rate of population growth. Urbanisation will also increase significantly, presenting great challenges for transport services in already crowded large cities. This scenario is likely to increase the demand for urban rail systems, but project financing will remain an obstacle for the region.

4.7.2 Drivers of Demand

Importance of the railway system 2015

Modal split

Rail freight transport [%]

Modal split

Rail passenger transport [%] Investment activity

20 <10 Medium

© SCI Verkehr GmbH

The important proportion of modal split in rail freight transport is mainly related to the transport of raw materials. The profitability of such transport mainly depends on efficient links between mines and ports. Due to the underdevelopment of existing railway networks and the lack of local and long-distance connections, the modal split for passenger rail transport is low.

Rail infrastructure 2015

Mainline railway network

[route-km]

Urban rail network

[route-km]

Network density

[route-km/100 km2]

Degree of mainline railway

electrification [%]

xxx xxx xxx x.x xx

© SCI Verkehr GmbH

The region Africa/Middle East has the lowest railway network density of all market regions. This is not only due to insufficient development but also given specific geographical characteristics (desert). Moreover, the network is characterised by different standards and lacking interoperability. Missing stretches between important routes and different gauges are not rare in the region. Urban rail transport is also underdeveloped: In addition to more than 100 000 km of railway lines, just short of 500 km of metro and light-rail networks exist. [….]

Transport performance 2015

Rail freight transport Rail passenger and urban transport

Transport performance [million tkm]

Growth 2010-2015 [% p.a.]

Transport performance [million pkm]

Growth 2010-2015 [% p.a.]

xxx xxx +x.x xx xxx +x.x

© SCI Verkehr GmbH

4.7.3 Drivers of Supply

[….]

4.7.4 Market Development

[….]

Market for railway industries: Rail modes

Segment Current market volume 2015 [EUR million]

CAGR 2015–2020 [% p.a.]

Volatility of market development 2015–2020 [%]

HSR 680 +1.0 46.7

Conventional railway x xxx +x.x xx.x

Urban transport xxx +xx.x xx.x

PIT (all rail modes) xx +x.x x.x

Total x xxx +x.x xx.x

© SCI Verkehr GmbH

SCI Verkehr expects the most substantial growth of 17% in urban transport. [….]

Market for railway industries: Product segments

Segment Current market volume 2015 [EUR million]

CAGR 2015–2020 [% p.a.]

Volatility of market development 2015–2020 [%]

Infrastructure x xxx +x.x x.x

Systems technology xxx +x.x xx.x

Rolling stock x xxx +x.x xx.x

Total x xxx +x.x xx.x

© SCI Verkehr GmbH

The growth rates in the product segments vary from 6.3% to 8.0%, only slightly diverging from the overall market growth of 7.1%. Equally, there is great demand for infrastructure and systems technology and rail vehicles.

Market for railway industries: Business segments

Segment Current market volume 2015 [EUR million]

CAGR 2015–2020 [% p.a.]

Volatility of market development 2015–2020 [%]

OEM market x xxx +x.x xx.x

After-Sales market x xxx +x.x x.x

Total x xxx +x.x xx.x

© SCI Verkehr GmbH

[….]

5 The Market for Infrastructure

5.1 Track Systems

5.1.1 Definition and Brief Description

Criteria Brief description

Definition Track systems are made up of rails connected via rail fastenings to either sleepers embedded in ballast, to other suitable materials, or to a ballastless track (comprising monolithically cast concrete or concrete elements). Rails are joined together either by rail connectors (fishplates)

or are welded together without gaps.

Other elements of the track system (for both types of construction) include points and crossings, which are manufactured separately and integrated into track systems if necessary, as well as a number of components securing the operational function of the track system (e.g.

rail end blocks) or reducing undesirable effects on railway operation (e.g. air- and structure-borne noise).

Fields of operation The track system forms the basis for every type of rail transport.

Delimitation The overall term “track systems” does not by itself constitute a product group. Rather, track systems are made up of a multitude of products, which are each available in different variations. Some of these represent coordinated technical subsystems, some can be operated

freely and some are entirely optional. Each subsystem and each product that can be operated freely forms its own submarket.

A track system only becomes operable when all of its components are available in sufficient quantity and quality at the same time. Suppliers and network operators therefore have to focus

on a complete functioning system, although the components are normally procured separately in form of independent products.

Assessment basis Due to the variety of products and limited space, this study does not include a breakdown by product segment and specification of quantities. Instead, the market volume will be given in monetary units for the entire track system in question.

Service life The operating life largely depends on the properties of the selected products and subsystems and the specific operational demands on the respective track system; this is not always optimal, for instance due to budget restrictions.

In general, points have the shortest life cycle at ten to 25 years and at the same time they also require the most maintenance.

Rails can remain in tracks for some 20 to 40 years.

The life cycle of ballast is around 25 to 40 years, depending on the material used.

Wooden and steel sleepers usually have to be changed after around 25 to 40 years; concrete

or plastic sleepers can last for around 50 years.

The service life of ballastless tracks is estimated at 50 to 60 years; in-depth practical experience, however, is only available to a limited extent.

After-Sales Renewal and maintenance of track systems are the equivalents of the After-Sales market in the rolling stock segment. They include all product procurements and services carried out after the track system goes into operation to maintain or to create a defined operational standard of

performance.

In contrast, new development and upgrade includes all product procurements and services which are performed to achieve a higher operational standard of performance than the previous situation.

© SCI Verkehr GmbH

5.1.2 Suppliers

[….]

5.1.3 Drivers of Procurements

[….]

Driver Brief description Relevance Trend

Available investment funds In all market regions, public budgets have a directly or indirectly decisive influence on projects for the development of infrastructure networks. Even if funds come from private investors,

public guarantees are often required for safeguarding reasons. In addition, international financial institutions often play an important role. As a result, public funding can be secured in almost all

cases, leaving concrete decisions subject to (public and private) market players’ (geo-) political, economic and commercial considerations, which have been put under pressure by low

global commodity prices, despite ongoing urbanisation.

Revenues of network operators

Revenues from transport operations are the second principal element of investment funding. Besides covering the cost of operation, they are mainly used to fund maintenance and renewals. Recent developments in several principal markets show

that these tasks are underfunded and need enhanced attendance in the future, but both cross-financing from transport revenues and public funding have been put under pressure by the rather

sluggish development on the transport markets.

[….] [….] [….] [….]

Relevance for procurements: = very high, = high, = medium, = low, = none

5-year trend: = strongly increasing, = increasing, = constant, = decreasing =strongly decreasing

© SCI Verkehr GmbH

5.1.4 Installed Base, Market Volume and Development

Between 2015 and 2020, SCI Verkehr expects that the worldwide railway networks will grow from currently 1.3 million to 1.38 million route-kilometres. [….]

Track systems: Installed Base and Development

Region Installed Base 2015 [route-km]*

Worldwide Share [% of route-km]

CAGR 2015–2020 [% p.a.]

Western Europe 182 100 13.9 +0.6

Eastern Europe xx xxx x.x +x.x

North America xxx xxx xx.x +x.x

South and Central America xx xxx x.x +x.x

Asia xxx xxx xx.x +x.x

CIS xxx xxx xx.x +x.x

Africa/Middle East xxx xxx x.x +x.x

Australia/Pacific xx xxx x.x +x.x

Total x xxx xxx 100.0 +x.x

*Figures rounded to the nearest 10 route-km

© SCI Verkehr GmbH

[….]

The widespread downturn on the commodity markets has severely influenced the development of rail networks in many parts of the world. Apart from projects which aim at expanding rail transport to additional territories or promoting passenger transport, only relatively few of them have been brought from design stage to realisation. Most significant downturns in OEM market volume can be seen in Eastern Europe, both Americas, and in the Gulf area. Where construction has already begun, however, it slowed down repeatedly, but never has been interrupted.

Track Systems: New Development and Upgrade (OEM)

Region Current Average Market Volume 2015 [EUR million]*

CAGR 2015–2020 [% p.a.]

Volatility of Market Development 2015–2020 [%]

Western Europe x xxx +0.2 10.3

Eastern Europe x xxx –7.5 26.2

North America xxx –1.9 17.0

South and Central America xxx –10.1 27.7

Asia x xxx +1.4 7.7

CIS xxx +2.5 13.8

Africa/Middle East x xxx +9.1 14.0

Australia/Pacific 300 +4.3 44.2

Total xx xxx +x.x x.x

*Figures rounded to the nearest EUR 10 million

© SCI Verkehr GmbH

[….]

Track Systems: Renewal and Maintenance (After Sales)

Region Current Average Market Volume 2015 [EUR million]*

CAGR 2015–2020 [% p.a.]

Volatility of Market Development 2015–2020[%]

Western Europe x xxx +x.x x.x

Eastern Europe x xxx +x.x x.x

North America x xxx +x.x x.x

South and Central America xxx +x.x x.x

Asia x xxx +x.x x.x

CIS x xxx +x.x x.x

Africa/Middle East 930 +5.0 1.8

Australia/Pacific xxx +x.x x.x

Total xx xxx +x.x x.x

*Figures rounded to the nearest EUR 10 million

© SCI Verkehr GmbH

[….]

Developments in the World Market Regions 1.1.1

Western Europe

– With a 14% share of the worldwide networks, Western Europe is among the most important track system markets. The largest national networks can be found in Germany, France, Spain and Italy. The size of the line network contrasts with the rather moderate growth in length.

[….]

ANNEX (excpert)

2 Eastern Europe

2.1 Infrastructure

[….]

13 180

4 450

3 620

2 840

3 090

8 600

6 820

6 370

6 640

5 050

0 5 000 10 000 15 000 20 000 25 000

Poland

Romania

CzechRepublic

Turkey

Hungary

Largest Networks by Country [route-km]

electrifed non-electrifed© SCI Verkehr GmbHRounded to full 10 km.

19 220

10 820

9 490

9 080

7 610

0 5 000 10 000 15 000 20 000

PKP Polskie Linie KolejoweS.A. (Poland)

Compania National CFR SA(Romania)

Správa zeleznicní dopravnícesty s.o. (Czech Republic)

Türkiye Cumhuriyeti DevletDemir Yollari GenelMüdürlügü (Turkey)

Magyar Államvasutak Rt /MÁV-START AG (Hungary)

Largest Infrastructure Managers [route-km]

© SCI Verkehr GmbHRounded to full 10 km.

82 180

5 240

1 320

470

390

0 30 000 60 000 90 000

1435 mm

1520 mm

1000 mm

760 mm

750 mm

Largest Networks by Gauge [route-km]

© SCI Verkehr GmbHRounded to full 10 km.

19 350

15 400

2 200

910

380

0 5 000 10 000 15 000 20 000

25 kV 50 Hz AC

3 kV DC

600 V DC

750 V DC

3.3 kV DC

Largest Electrified Networks by Voltage System [route-km]

© SCI Verkehr GmbHRounded to full 10 km.

100%

High Speed Rail: Networks by Country [% of Network Length]

Turkey

In total:

© SCI Verkehr GmbH

~ 420 route-km

Rounded to full 10 km.

420

0 100 200 300 400 500

Türkiye Cumhuriyeti DevletDemir Yollari GenelMüdürlügü (Turkey)

High Speed Rail: Largest Infrastructure Managers [route-km]

© SCI Verkehr GmbHRounded to full 10 km.

2.2 Vehicles

Electric Locomotives

0 500 1 000 1 500 2 000

Other countries

Slovenia

Turkey

Bulgaria

Slovakia

Hungary

Czech Republic

Romania

Poland

Installed Base / Country [Number of units]

© SCI Verkehr GmbH

0 20 40 60 80 100

Other countries

Hungary

Czech Republic

Poland

Turkey

Delivery 2011 - 2015 / Country [Number of units]

© SCI Verkehr GmbH

0

500

1 000

1 500

2 000

2 500

No Info Berfore 1976 1976 - 1985 1986 - 1995 1996 - 2005 2006 - 2015

Installed Base / Age Distribution [Number of units]

© SCI Verkehr GmbH

34%

32%

13%

9%

12%

Delivery 2011 - 2015 / Market Shares [Number of units]

Tülomsas

Bombardier

Siemens

Skoda

Other manufacturers

© SCI Verkehr GmbH

In total:~ 240

© SCI Verkehr GmbH

27%

42%

7%

24%

0%

Installed Base / Power installed [Number of units]

under 3 MW

3 to < 4 MW

4 to < 5 MW

5 to < 8 MW

over 8 MW

in total:~ 5 400

© SCI Verkehr GmbH

1%

99%

Delivery 2011 - 2015 / Power installed [Number of units]

under 3 MW

3 to < 4 MW

4 to < 5 MW

5 to < 8 MW

over 8 MW

in total:~ 240

© SCI Verkehr GmbH

Bestellformular MC Worldwide Market

© SCI Verkehr GmbH

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