Left: China’s CRH3 Above: Bombardier produces its Traxx locomotive in a number of diesel and electric variations. DB has just ordered up to 200 of a multi-engined diesel design Right: Siemens has received the biggest order in its corporate history for ICx long-distance trains for DB in Germany.
BACK ON TRACK A return to growth is signalled in Europe’s railway equipment market. James Abbott reports.
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he barometer is set fair for Europe’s railways. The economic fundamentals favour the mode: soaring petrol prices are tempting more people to travel by train, while the return to economic health of the core eurozone countries in the aftermath of the 2008 financial crisis has pushed up freight traffic. Passenger demand forecasting measures used by the UK rail industry indicate that a 5 per cent rise in petrol prices can lead to around a 1 per cent rise in journeys on the rail network. So the rising cost of fuel has been a contributory factor in a 4.8 per cent increase in passenger numbers on British railways in the first three months of 2011: 316 million journeys were made in the first quarter of 2011, compared to 301 million over the same period last year. Growth over the entire financial year 2010–11 was 6.6 per cent in Britain’s passenger rail market. It is little wonder, then, that the British government is promoting the construction of a new high-speed line from London to the north of England: the existing transport corridors are simply becoming full up. The protracted planning processes in the UK mean it will be some years before construction can start, but the plan is to reach Birmingham by 2026 and Manchester and Leeds by 2033. Meanwhile, in Europe’s manufacturing heartland, exports are booming as the euro has gained a competitive edge after 8 Industry Europe
being dragged down by the problems in the peripheral countries. As a result, rail freight carryings in Germany are up 21 per cent in the past year, clawing back the tumble they took following the financial crisis. Looking to the long term trend, DB Netz, the infrastructure division of the German state railway, expects tonne-km to grow by as much as 65 per cent between 2004 and 2025, with passenger-km rising by more than 25 per cent. (A tonne km is one tonne moving one kilometre, a passenger km is one passenger moving one km.) A sharp rise in intermodal and international freight traffic has prompted DB Netz to bring forward planning for a new eastern corridor line running from Hamburg and Bremen to south Germany via Uelzen, Stendhal, Magdeburg, Reichenbach, Hof and Regensburg. The Ministry of Transport is supporting the eastern corridor with a view to DB Netz completing the project by 2019. The German passenger market, too, is growing strongly, prompting the largest order in Siemens’ corporate history in May 2011: the manufacturer will build up to 300 new ICx long-distance trains for DB, with the first trains due to be delivered in 2016.
World demand rising
These examples of expansion in Europe reflect a pattern that is being repeated globally. Increasing urbanisation favours the rail
mode and demand for railway equipment is rising around the world. That is good news for Europe, as the continent is a global leader in railway equipment manufacture. The headquarters of the railway divisions of the two biggest companies in the railway equipment supply industry in the world, Bombardier and Alstom, are located in Berlin and Paris respectively. A recent study by German consultancy SCI Verkehr estimated that the global railway equipment market is worth €131 billion, 53 per cent of which is from after sales. The company’s Maria Leenen and Andreas Wolf project that sales will grow by 22 per cent over the next five years, to hit €160 billion by 2015. One key factor identified by the consultants is the increasing importance of Asia – and more specifically, China – in global equipment demand. “The Chinese railway technology manufacturers are increasing their turnover and market share at a breathtaking speed, and more recently outside their domestic market. We predict a clear shift in the overall market balance in favour of Asian players in the next five years,” say the consultants. China has become the biggest investor in railways in the world, overtaking the USA, where investment in new locomotives and freight wagons dropped off in the wake of the financial crisis. So rapid has been the increase in output in the Chinese railway
