Rail market - as ever, a rewarding business
Present volume running at €56.7 billion/Vossloh presents Worldwide Rail Market reportRail will remain an exceedingly attractive future market for those companies which possess specialized experience and proven expertise as well as the required certifications in this segment and are able to adapt to the increasing internationalization of markets. This is the conclusion reached by the Worldwide Rail Market report commissioned by Vossloh AG and presented today in Berlin by the CEO of this MDAX listed company, Burkhard Schuchmann.
The firm of consultants SCI Verkehr GmbH, Hamburg, entrusted with the compilation of the report, estimates the worldwide rail market at currently about €56.7 billion per annum. The annual growth over the next five years for all regions and submarkets is assessed at about 4 percent.
Western Europe will remain the most significant market for rail industry products. The growth in transport demand will continue to ensure substantial gains in market volume. In absolute terms, this growth is the biggest worldwide but owing to the region's high stock levels is moderate in percentage terms.
Asia is also of outstanding importance with its enormously extensive rail networks. However, demand for solutions from Western manufacturers exists only in subsectors within this region. Exceptions are areas where sophisticated solutions are needed which cannot, however, be provided by domestic suppliers. This is especially the case with engineering systems as well as in some specific segments, such as high-speed transport or in some instances in the metro sector. Substantial growth is to be expected in this area owing to the rapid pace of development.
North America is of interest to European manufacturers chiefly in those segments where there is pent-up demand compared with Europe, as is the case in passenger transport. Significant market opportunities exist for foreign companies in suburban rail transport, in light rail and in high-speed transport. The dominant freight haulage segment, on the other hand, with its specific North American volume-dominated character, is already well covered by domestic manufacturers.
"Central Eastern and Southeastern Europe and the CIS offer the most interesting prospects worldwide. After railway transport suffered a drastic slump in the early to mid-1990s, the first signs of recovery are already starting to surface above all in the accession states," emphasized Schuchmann. Due to scarce financial resources, very few or no procurements were made in these countries in the 1990s, in which the railway still represents the backbone of distribution in many transport areas. As a result of this situation, both the infrastructure and rolling stock are in a state which makes investment urgently necessary despite the shortage of available funds.
In the EU accession countries, EU subsidies have prompted for some years now initial expenditures on main-line refurbishment. There is also an evident rise in the numbers of vehicles on order. "In certain areas such as infrastructure and engineering systems, high-quality products from Western suppliers are being opted for increasingly. This is not least linked to the fact that some of the funds for capital investments are being sourced from the EU. For this reason, the forecast for the Eastern European market in the next five years is comparatively optimistic. For the CIS, such growth in market volume will presumably occur in the years thereafter," stated Vossloh's CEO.
In summary, it can be concluded that developments in the individual countries and regions will vary depending on national policy, procurement programs and prioritization. For the rail industry's manufacturers, perceiving these trends in good time, assessing them correctly and taking them into due account are crucially important to their success or failure. Schuchmann concluded: "Through a consistent analysis of market trends with a substantiated assessment of the underlying national conditions and priorities as well as an evaluation of the respective financing solutions, it is possible to create a valid early warning system for operating in these markets very successfully."
Berlin/Werdohl, November 4, 2003