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Consolidation processes in the global rail vehicle industry are gaining momentum

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Merger plans such as those of Siemens and Alstom or General Electric (GE) and the leading railway supplier Wabtec are keeping the rail industry and the antitrust authorities in suspense, even though the market share of the top 10 leading manufactures of rolling stock has decreased from 75% in 2015 to 70% in 2017. The wave of consolidation is now reaching a new high. Subject to antitrust approvals, major mergers are imminent in the rolling stock industry, which are likely to have lasting effects on the manufacturing landscape. The aim of the Siemens/Alstom merger is to create a European counterweight to the globally dominant manufacturer CRRC. Even though, despite a few minor exceptions, Chinese trains have not yet arrived in Europe, Maria Leenen, CEO of SCI Verkehr, expects this to change in the future. The companies hope that the mergers will above all reduce development and approval costs and strive to increase their global market presence. This is countered by growing protectionist tendencies. Many markets are tightening their demands for local production or cooperation with local partners. The Chinese industry leader CRRC was able to maintain its market share of a good third, while locomotive and freight wagon manufactures, particularly from North America, suffered from a decline in sales especially due to lower freight traffic volumes.

Over the past three years, the rail vehicle industry has benefited from dynamic global demand: Sales grew from around EUR 51 billion in 2015 to EUR 55 billion in 2017. CRRC, the largest rolling stock manufacturer, increased its sales of new vehicles from EUR 17 billion to EUR 18.5 billion, mainly due to successful foreign business. CRRC currently generates more sales in the new vehicle business than the next five largest companies combined. Understandable, that the European manufacturers Siemens and Alstom are making efforts to jointly counter this market power.

The planned merger of GE Transportation and Wabtec aims to broaden the company´s market presence and to vertically integrate the value-added levels of new vehicle production and component manufacturing. GE Transportation is the global market leader for diesel locomotives and Wabtec is one of the leading companies in the market for rolling stock components.

The market reflects the dependence of rolling stock manufacturers on a small number of core markets. Therefore, even with less spectacular concentration projects, efforts to expand geographically are evident. The often driving desire to fill domestic production capacities is countered by demands for local production in new foreign business as well as complicated approval procedures. In 2017, for example, Stadler Rail began construction of a new production facility in Salt Lake City, USA, and was thus able to obtain follow-up orders for 16 double-deck trains.

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The MultiClient Study “Worldwide Rolling Stock Manufacturers 2018“ is available now (in English) from SCI Verkehr GmbH (www.sci.de). Please also find more information about our latest offer of the data annex in Excel-format, which will be available for all upcoming study publications.

Contact:
SCI Verkehr GmbH
Alexander Apking
Tel: +49 221 9317820
E-mail: a.apkingsci.de