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The global rail wheel market size was USD 3,822.1 million in 2019 and is projected to grow from USD 3,772.3 million in 2020 to USD 4,869.1 million in 2025, growing at a CAGR of 5.2% during the forecast period. Based on our analysis, the global market exhibited a decline of -1% in 2020 as compared to the average year-on-year growth during 2016-2019. The global impact of COVID-19 has been unprecedented and staggering, with rail wheels witnessing a negative impact on demand across all regions amid the pandemic. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Rail wheels and axles are key parts that support the safe operation of railway vehicles. The wheels support the entire car weight. These components support safety to the rail at the ground level. For instance, nowadays trains can reach a maximum speed of 300 km/hour, and the braking and acceleration performance of trains are also improving. This has heightened the reliance on rail wheels. The cross-sectional shape of the wheel and track not only defines the dynamic and kinematic characteristics of the wheelset, but also defines the physical characteristics, such as creep, contact stress, and wear. For instance, advancements in wheels such as HT (High Toughness) wheel and New Corrugated (HT Corrugated) wheel have provided excellent resistance to the thermal effects of braking. There are mainly three types of wheels: wagon wheels, passenger car wheels, and locomotive wheels. Wagon wheels are designed to use for speeds up to 120 km/hour and they normally use thread brakes. Passenger car wheels are designed to run for speeds more than 120 km/hr. They use wheel disc brakes or axle disc brakes. There are two types of locomotive wheels – split wheels and overall wheels. They are larger in diameter than common wheels, measuring 1000mm and above. To lower the wear of the wheel many railway organizations have designed worn profiles and also maintain the geometry of wheel to rail. Most railway organizations tilt the rails at a small angle to each other, which usually matches the taper of the wheels, so the normal force when the wheelset is in the center is oriented along with the rail web. For instance, in Sweden it is 1 to 30, in the UK this angle is 1 to 20, and 1 to 40 in many countries including Germany.
Growth of Rail Wheels Market to Slow Down amid COVID-19 Pandemic
Owing to the COVID-19 impact, passenger rail operators are under a considerable financial strain. This is primarily attributed to the stringent social distancing norms along with a significant drop in ticket revenues, resulting in a lack of rail operations and especially investment funding. Also, the mounting deficits of local government bodies, in particular, may lead to a halt in upcoming as well as existing investment programs. For instance, the New York Metropolitan Transportation Authority (MTA) is expected to face a deficit of USD 16 million over the next four years and has requested federal financial support. Also, the coronavirus pandemic has had a serious impact on the revenue of Indian Railways. It is estimated that the country’s transportation industry’s revenue for the current fiscal year is only Rs 150 billion, compared with Rs 53 billion in FY20. According to VK Yadav, Chairman and CEO of the Indian Railway Board stated that despite the setback, very soon, the railways will be self-reliant.
Furthermore, procurement of new vehicles owing to the long lead times is being pushed forward, with the demand expected to recover by 2021. Hence, the financial impact on infrastructure investment will be greater than the spending on new rail vehicles. Additionally, as a result of the pandemic, airline companies are aiming to improve rail transport links and significantly reduce short-haul flights. This will propel the adoption of long-distance and high-speed trains over the forecast period. For instance, ocean and air freight transit times along with air shipping prices have increased, which has further boosted the viability of long-distance passenger and freight trains operating on trans-Eurasian rail lines.
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Growing Fleet of Solar Powered Trains to Set a Positive Trend in the Market
The current environmental crisis sweeping the world calls for all sectors to play a role in reducing emissions and limit the effects of climate change. In this case, the railway industry has a relatively favorable starting point, accounting for only a small percentage of global emissions, and represents one of the most sustainable modes of transportation. Numerous projects around the world have shown the existence of carbon substitutes, and they are equally effective. Ideas from hydrogen trains to network electrification are currently receiving global attention. Dual-mode and hydrogen-powered engines are in huge demand in the railway industry. Solar-powered railways have started to show great potential. This technology is also proving successful in some regions across the globe. Moreover, several similar railway projects are being initiated in Australia and India. For instance, Indian Railways to procure 1000 Megawatt solar panels by 2021-22. The solar panels will be installed on the rooftop of the railways to fulfill the requirement of light and fan power. Lucknow-Varanasi and Mathura-Alwar railway sections are soon to be equipped with solar power technology. Moreover, in 2019, the UK introduced the world’s first solar-powered track, leading to a leap in the adoption of new technological advancements and opening of new opportunities. A solar train is usually driven by assigning photovoltaic panels either close to or on the railway line. It generates adequate electricity to trigger the traction current, which is distributed to the grid. These systems have the ability to offer several financial benefits to several networks that currently rely heavily on electric grids.
Digitalization of Trains is Boosting the Growth of the Market
Creating smart, environmentally sustainable, and user-friendly mobile systems is one of the high-priority directions for the development of global transportation. Rail transport infrastructure is considered crucial in this process. Also, understanding the concept of digital transformation is crucial in the development of railway transportation for the new and greener economy. The prime technologies and solutions that have accelerated the digital transformation of the railway sector in many countries are cloud computing, the Internet of Things (IoT), automation and robotics, and Big Data Analytics (BDA). Mobile applications, digital train control, e-tickets, digital platforms for predictive maintenance, signaling, and traffic management are the key sections of digitization of the railway sector. Digitization will lead to the improvement of the overall operational efficiency and the safety of railway infrastructure. The automation of metro trains is gaining more traction on a global scale and train automation, which reduces overall energy consumption by up to 42%, is expected to boost the rail wheel market growth during the forecast period. For instance, the Indian Railways has begun to automate and digitalize the operations and Siemens is widely engaged in enhancing mobility through advanced technologies. They are working on the VEMS (Vehicle Equipment Measurement System) portfolio. This system has arrays of sensors that work by collecting data on the wheel profile, rail profile, brake pads among others.
Rapid Growth in Population and Rising Traffic Congestion on Roads to Boost Market Growth
Over the past few years, demographic dynamics have changed exponentially, driven by the increase in urbanization, improvement in the living standards of people, rise in industrialization, as well as development in the infrastructures. These developments have propelled the growth rates of automobiles across the globe, thereby leading to severe traffic congestion on roads. The increased traffic congestion has further led to several health issues, including whiplash injuries, back and neck injuries, and also mental stress problems. On the other hand, rail connectivity is intensifying rapidly in various regions, and numerous rail projects are being implemented in cities to enable safe and fast commuting. Besides, increasing vehicular emissions, rising awareness of safety, and also the growing demand for improved comfort and faster traveling is gaining attraction of individuals, thus shifting their preference towards rail transportation. Furthermore, governments and private agencies are also focusing on expanding rail connectivity and are investing to develop passenger trains to meet the growing demand for public transport. All these factors are creating a high demand for rail wheels in the global market.
Lack of Government Spending on Rail Projects May Hamper Market Growth
The railway is one of the oldest and most widely used modes of transportation, and it remains a silent testimony of revolutions and reforms in various industries around the world. The railway stimulated and promoted several countries’ economic growth, and became an important means of economic diversification, and proved to be a real-time catalyst for cultural adaptation. Technically, today’s railway technology is the same as the earlier technology - the low-friction arrangement of the iron wheels on the rails. In order to make the railway more attractive, secure, and safer, renewal and upgradation work is essential. Updating the latest technology is an important aspect of these developments to attract more people to choose to travel by train. As a sustainable mode of transportation, railways play an important role in keeping the environment clean and pollution-free for future generations. The upcoming changes in the railway industry will be driven by the continuous development of the needs and expectations of future passengers, customizability of preferences, loyalty, and better service. However, these modern inventions require finances, which are lacking from the governments’ end, thus restraining the growth and development of the railways and ultimately hampering the rail wheel market growth.
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Freight Wagon Segment to Dominate the Market
Based on rail type, the market is segmented into high speed, freight wagon, passenger wagon, and locos. The freight wagon segment holds a major share in the global market. Freight wagons are unpowered railway vehicles that are used to transport goods via railway networks. Compared with road transportation, freight trains types are faster and more economical. Freight wagons have a high carrying capacity and are easy to load and unload goods. Nowadays, manufacturing companies are working towards developing high-loading capacity freight wagons that are reliable, durable, and are lighter in weight. Railways are playing an essential role in facilitating transnational import and export trade.
Passenger wagons are also gaining high demand and are being widely adopted across the world. Particularly in urban areas, the focus of the government authorities is towards promoting mass transportation, which will contribute to the growth of the global market over the forecast period.
OEM Segment to Hold the Largest Market Share
Based on application type, the market is segmented into OEM and aftermarket. The OEM segment holds the largest share of the global market. In the last couple of years, the rail wheel and axle market has grown significantly, adding connectivity and improved services to the railways. OEMs are developing highly efficient and more durable railway components. Moreover, the stringent rules and regulations of governments towards the safety of passengers and precautions for avoiding collisions are forcing OEM companies to work on rail axles and wheels to abide by governmental norms. The expansion of railway connectivity and the development in the railway systems, as well as an increase in the number of rail vehicles, are boosting the railway wheel market across regions, especially in China and India.
Asia Pacific Rail Wheels Market Size, 2019 (USD Million)
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The market size in Asia Pacific stood at USD 1,496.6 million in 2019. The region dominates the rail wheel market share owing to rapid urbanization, growth in disposable income, and dynamic economic development. The region is experiencing a marked shift from conventional railway systems to digital and modern railways. Also, various countries are adopting advanced technologies to pave the way for the railway wheel market growth. Various measures taken by governments to initiate the digital modernization and transformation of railway networks in the region will also drive the market. Metro network development is a key area of focus in countries such as China and India. For instance, metro lines measuring up to 969 km were built in China in 2019. In comparison, the existing metro systems accounted for 670 km. The urban rail transport in China is dominated by metro systems and the demand for rolling stock is expected to increase with the further expansion of such systems. This is anticipated to propel the growth rate of the market in this region.
North America rail wheel market holds the second-largest share in the global market as advanced railway lines between the countries in the region are providing a wide range of products into the railway product transportation portfolio. The world's largest freight rail network is expected to witness next-generation inventions such as lasers, automation technology, and drones. For instance, Railinc, a subsidiary of the American Association of Railroads (ARR), is dedicated to making the US freight rail network more efficient and safer with big data. Trade relations between American countries play an important role in reshaping the railway industry. Proper negotiations between railway operators are required to obtain the huge profits that the North American Free Trade Agreement (NAFTA) provides to the economies of Mexico, the United States, and Canada.
Europe rail wheel market is estimated to show prominent growth over next few years. The strengthened technical coordination of the railway system and developed major cross-border railway routes are the prime factors for the growth of this region in the market. Opening up of the national passenger and freight transport markets to cross-border competition is a significant step towards the establishment of an integrated European railway area and a true intra-EU railway market.
CRRC Corporation Limited is a Leading Player in the Global Market
CRRC Corporation Limited is the largest supplier of railway transportation components globally, with leading product lines and technologies. The company is primarily involved in the manufacturing, design, sales, maintenance, leasing as well as several other technical services related to urban rail transit vehicles, rolling stock, and a wide range of electronic and electrical equipment. The company is committed to developing efficient solutions to attain sustainability in railway transportation. Moreover, the merger between CNR and CSR formed CRRC, which not only increased its global influence but also enhanced the international competitiveness of market-leading companies. Furthermore, prominent players such as Bombardier Inc., Amsted Rail Company, Inc., and CAF USA, Inc. have adopted aggressive development strategies to uphold their leading positions in the global market.
An Infographic Representation of Rail Wheel Market
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The global rail wheels market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading applications of the product. Besides this, the report offers insights into the current market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the growth of the market over recent years.
Value (USD million) & Volume (thousand units)
By Rail Type
By Application Type
Fortune Business Insights says that the global rail wheel market size was USD 3,822.1 million in 2019 and is projected to reach USD 4,869.1 million by 2025.
In 2019, the Asia Pacific market value stood at USD 1,496.6 million.
The market is projected to grow at a CAGR of 5.2% and will exhibit moderate growth in the forecast period (2020-2025).
The rail type segment is expected to be the leading segment in this market during the forecast period.
The digitalization of trains will drive the global market growth.
CRRC Corporation Limited is the leading player in the global market.
Asia Pacific dominated the market share in 2019.
Rapid growth in population and rising traffic congestion on roads are expected to drive the adoption of railway wheels.
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