The global locomotive market is anticipated to register a CAGR of about 3% during the forecast period (2020 - 2025).
- The rapid urbanization, traffic congestion, growing environmental concern, increasing technological advancements, are expected to fuel the demand of the locomotives in the forecast period. The market is witnessing the active participation of governments to develop railway the cheapest and safest means of transportation more comfortable.
- In current market scenario cars, hybrid technology of electric locomotives and electric multiple units (EMUs) are equipped with regenerative braking technology that converts the kinetic energy of the train during its braking into power that is being injected back into the overhead lines which can be further used by other trains circulating on the same route, reducing overall electricity demand.
- For achieving the zero wheel-to-wheel emission many locomotives manufacturers are coming up with new propulsion technologies locomotives such as hybrid diesel-electric battery, completely battery-electric and hydrogen fuel cell. For instance, in 2018, CRRC corporation signed a framework agreement with Deutsche Bahn Group of Germany to export 20 hybrid shunting locomotives. With maximum speed of 100km/h this locomotive is a combination of third-rail, diesel and a lithium-titanate battery hybrid electric transmission. Bombardier’s Talent 3 locomotive which currently has a battery range of 40 km only but company future target is to increase it up to 100 kms. Another example, Siemen’s Cityjet eco which is a battery-electric train for shorter routes is being adopted in Austria under the plan of Austrian Federal Railways Update Fleet Strategy 2035 to achieve zero emission traction across its fleet by 2035.
- When all other modes of transport are turning to electric, rail is already the most electrified mode of transport although it still expanding in most of the countries. For instance, according to International Energy Agency in India, the electrified share of the rail network increased from 24% in 2000 to 38% in 2017. In total 22 terawatt-hours (TWh) electricity demand of India, Indian trains account around 2% of electricity in 2017, where electricity is used for both passenger and freight services. In the passenger services, all metros are electrified, while 54% of conventional rail uses electricity.
Key Market Trends
Government Support is Contributing the Locomotive Market Growth
Growing environmental concerns regarding the emissions due to road and air transport, also with the is growing city congestion, railway transportation is the cheap and environmentally friendly alternative. In most of the biggest rail network countries management is under the control of private players. But at the same time government has some control over its operations. India which has the fourth-largest rail network in the world has a state-owned rail network, and in 2019, Indian Railways has received a budget allocation of USD 9.62 billion for the 2019-20 fiscal year which is 19.5% more than that of the previous year. In addition to that a proposed capital expenditure outlay of USD 23.4 billion for railways. Similarly, in 2017 the UK’s government have announced that around USD 50 billion of investment will be done on the rail network modernization from 2019 to 2024.
Asia pacific is Expected to Lead the Locomotive Market
The railway is the preferred means of transport among the passengers of the major Asian economies such as China, India, and Japan. With these three countries also topping the list of passenger-kilometer per year, in addition to that major manufacturers of the locomotive market are headquartered in this region. Local governments are putting more and more capital for advancing the present rail network. For instance, in 2018 China invested USD 117.12 billion in fixed rail assets and its plan for 2019 is to invest in 6,800 km of new railway lines which is 40% up from the previous year, in which approx. Half of the railway lines is high-speed rail. Whereas in India, Indian Railways is set to combine its locomotive manufacturing units and workshops into a new public sector unit (PSU) - Indian Railway Locomotive Company. This PSU will be structured along the lines of China's CRRC Group. In addition to that Indian railway is also modernizing the existing railway network by including a new OMRS system, which consists of Acoustic Bearing Detector (ABD) or Rail Bearing Acoustic Monitor (RailBAM) that can detect the faults in the bearings and wheels of a rolling asset.
The global locomotive market is moderately consolidated, have a limited number of active players owing to the requirement of high initial investment cost, and a high-level of technological requirements. Some of the major players in the market are CRRC, Alstom SA, Siemens AG, and Hyundai Rotem, amongst others. The companies are expanding their presence by acquiring other market participants, forming strategic alliances with other players in the market, and launching new and advanced locomotives. For instance,
- In 2020, Alstom announces that it has signed an MoU with Bombardier Inc. and Caisse de dépôt et placement du Québec (“CDPQ”) for the acquisition of Bombardier Transportation. The price for the acquisition of all the Bombardier Transportation shares will be around €6 billion.
- In March 2020, CZ Loko introduced three new hybrid locomotives concepts named DualShunter 2000, EffiLiner 2000, and DualLiner 2000 in a Future of Shunting Locomotives conference, these models were supposed to hit the track by 2023.
- In 2020, Deutsche Bahn has awarded 50 hybrid locomotives orders to Toshiba Corporation, the estimated series assembly of the locomotives will start by 2021. This hybrid locomotive can provide annual energy savings of 30% and diesel fuel savings of 1 million liters per year.
- In March 2020, Alstom SA rolled out its first all-electric locomotive, it is a part of USD 3.5 billion order of 800 electric double-section locomotives signed back in 2015 with the Indian Ministry of Railways public-private partnership.
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1.2 Scope of the Study
4.2 Market Restraints
4.3 Industry Attractiveness - Porters Five Forces Analysis
4.3.1 Threat of New Entrants
4.3.2 Bargaining Power of Buyers/Consumers
4.3.3 Bargaining Power of Suppliers
4.3.4 Threat of Substitute Products
4.3.5 Intensity of Competitive Rivalry
5.2 By Geography
5.2.1 North America
18.104.22.168 United States
22.214.171.124 Rest of North America
126.96.36.199 United Kingdom
188.8.131.52 Rest of Europe
5.2.3 Asia Pacific
184.108.40.206 Rest of Asia-Pacific
5.2.4 South America
220.127.116.11 Rest of Latin America
5.2.5 Middle East and Africa
18.104.22.168 United Arab Emirates
22.214.171.124 Saudi Arabia
126.96.36.199 Rest of Middle-East and Africa
6.1.1 China Railway Construction Corporation Limited (CRCC)
6.1.2 Alstom SA
6.1.3 Siemens AG
6.1.4 Turbo Power Systems
6.1.5 Kawasaki Heavy Industries Ltd.
6.1.6 CJSC Transmashholding
6.1.7 Stadler Rail
6.1.8 Toshiba Corporation
6.1.9 Hyundai Rotem
6.1.10 Mitsubishi Heavy Industries, Ltd.
A selection of companies mentioned in this report includes:
- China Railway Construction Corporation Limited (CRCC)
- Alstom SA
- Siemens AG
- Turbo Power Systems
- Kawasaki Heavy Industries Ltd.
- CJSC Transmashholding
- Stadler Rail
- Toshiba Corporation
- Hyundai Rotem
- Mitsubishi Heavy Industries, Ltd.