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The global rolling stock market size was valued at USD 50.03 billion in 2022. The market is projected to grow from USD 50.86 billion in 2023 to USD 60.35 billion by 2030, exhibiting a CAGR of 2.5% during the forecast period.
Rolling stock is a term used to denote all vehicles that move on rail wheels. It covers both unpowered and powered vehicles. Rolling stock includes locomotives, passenger carriages, and wagons. Its various components include car body, car body fittings, power system, guidance, auxiliary systems, propulsion, braking system, interiors, on-board vehicle control, Passenger Information System (PIS), communication system, cabling & cabinets, door system, Heating, Ventilation and Air-Conditioning (HVAC), lighting, tilt system, and coupler.
Favorable passenger and freight transportation trends will drive the market growth over the next few years. Transportation demand is expected to increase passenger and freight activity significantly by 2050. Asia Pacific and Latin America will exhibit the majority of growth potential during the forecast period.
The expansion of railway networks in emerging economies will augment the product demand in future. Various urban rail projects are set to gain traction in Latin America. The World Bank invested USD 600 million to modernize the Belgrano Sur Railway Line. This Buenos Aires-Belgrano Sur Passenger Railway Line Modernization Project will improve user accessibility by offering public transport to people living in the heavily populated Buenos Aires Metropolitan Area.
COVID-19 Put Strain on Global Rail Supply Sector, thereby Affecting Market Growth
The COVID-19 pandemic hampered the industry due to a negative effect on supply-demand dynamics. Stringent lockdown measures coupled with labor shortages affected production associated with the product. Raw material unavailability and procurement delays due to transportation restrictions caused a slowdown in production. Moreover, negative sentiments on the demand side due to the virus outbreak among passengers affected the market growth in 2020. However, the market returned to normalcy and gained momentum as restrictions were lifted.
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Rising Adoption of Electric Trains is Set to Gain Traction in the Future
The popularity of electric trains is rising rapidly owing to their versatile benefits. These trains do not require high-grade coal and are free from producing coal dust. Diesel locomotives generally need time to start due to the warming up of the internal combustion engine. Electric trains are not subjected to such issues and require less time for repair & maintenance as compared to other locomotives. Running and maintenance costs of electric trains are comparatively lower than diesel locomotives.
Electric trains' large capacity and easy scheduling make them more suitable for traffic congestion in urban and suburban regions. These trains are less complex, have greater reliability, and are environment-friendly. Generally, electric trains are not subjected to sudden and temporary overloading as the system can draw more energy from the supply network. The regenerative braking system can be employed in electric trains to promote energy savings. The center of gravity of electric trains is low due to lower heights compared to steam locomotives, enabling them to maneuver carefully around curves at higher speeds.
Supportive government initiatives coupled with huge investments will drive the adoption of the electric train in the near future. In September 2021, Alstom unveiled a battery-powered multiple-unit train in Saxony. This train development project was done in collaboration with DB Regio, the German National Innovation Programme for Hydrogen and Fuel Cell Technology, and the Technical University of Berlin.
The Islamic Development Bank approved USD 345 million for Egypt’s electric train express project. This project comprises a 660 km rail network and will connect Ain Sokhna to Marsa Matrouh and Alexandria on the Mediterranean. It is expected to cut down carbon emissions by approximately 250,000 tons per year and will cover three lines, with 180 stations and a length of 2,000 km.
In July 2020, Vale developed a new 100% electric locomotive in Brazil in partnership with Progress Rail. This locomotive is a part of the PowerShift program that aims to replace Vale’s energy sources with clean counterparts. The company plans to reduce direct and indirect emissions by more than 30% by 2030.
Population Growth and Urbanization to Bolster the Market Growth
Rapid population growth and high urbanization rates in developing economies will drive the market growth during the forecast period. Electrification of rolling stock and supportive decarbonization policies will drive passenger rail transport, supporting market growth.
Various governments across the globe are implementing new initiatives to increase freight rail activity. Rail freight has significantly lower energy consumption as compared to road transportation. It plays a key role in reducing greenhouse gas emissions. Integration with automation and digitization will further contribute to market growth. This, in turn, will spur the rolling stock market growth.
Capital Intensive Nature of the Rail Industry may Hamper the Market Growth
High capital investments associated with rolling stock manufacturing and railway infrastructure development may hamper market growth in future. Moreover, increased costs related to technology integration may negatively influence the market growth. A high degree of competition in the rolling stock industry will further pressure cost optimization. The buying behavior of rail customers is often characterized by various decisions involving mode of transport, specific carrier to use, and most importantly, price. Such factors contribute to a high degree of cost control, thereby affecting rolling stock manufacturing activities.
A stringent regulatory environment may affect the rolling stock industry growth within the forecast period. These regulations compel rail companies to compete fairly and effectively, posing challenges. Decarbonization trends fueled by rising awareness regarding lowering carbon emissions will drive the electrification of trains in future. However, this will require additional capital, thereby affecting the market growth.
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Rising Passenger Traffic will Drive the Market Growth
Based on type, the market is categorized into locomotive, passenger carriages, and wagons.
The passenger carriages segment held the majority of the market share in 2022 and is predicted to continue its growth throughout the forecast period with the fastest CAGR. This segment includes coaches, electric multiple units, high-speed trains, diesel multiple units, metro. Rapid electrification of railways will propel market growth in the future. Favorable trends associated with urban rail infrastructure development will propel the demand for rolling stock.
More than 50% of the population lives in urban areas and is expected to grow more than 65% by 2050. According to the International Energy Agency (IEA), global line kilometers increased by over 28% and 43% for light rail and metro, respectively, between 2010 and 2018. Global line kilometers for high-speed rail increased by more than 135% within the same timeframe. Such above-mentioned trends will bolster the market growth in future.
Positive Outlook of Freight Rail Transportation will augment the Market Growth
Based on application, the market is divided into passenger and freight.
Rail is the ideal option for freight transport due to its numerous benefits. It offers a superior level of security and multimodal compatibility. The cost of transportation is significantly lower as rail fare is much cheaper than other modes of transport. This option is reliable and fast, with short lead times compared to sea freight. Rails are capable of handling large loads and are more environment-friendly. These aforementioned benefits will drive the industry growth over the forecast period.
Asia Pacific Rolling Stock Market Size, 2022 (USD Billion)
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Based on region, the market is segmented into North America, Europe, Asia Pacific, and the Rest of the World
Asia Pacific holds a dominating position in the rolling stock market share and was valued at USD 23.16 billion in 2022. It is projected to grow at 2.4% during the forecast period. Various governments in this region are pushing for the electrification of trains owing to their environmental and economic benefits. In January 2020, the Indian Government announced that the entire Indian railway network would run on electricity by 2024 and become a zero-emission network by 2030. In February 2023, the Ministry of Railways announced that 3,375 Route kilometers (RKM) were electrified in 2022 – 2023, displaying 38% growth than 2021 – 2022. In April 2023, Haryana became India's first state to have a 100% electrified network.
In June 2021, China launched a fully electrified bullet train in the remote Himalayan region of Tibet. This train connects the provincial capital, Lhasa and Nyingchi, reducing travel time by 1.5 hours. This train is capable of around 10 million tons of freight transport capacity per year. In 2019, the Chinese government invested USD 120 billion into the rail construction project as a decarbonization program. China’s five-year plan (2016 – 2020) involved a target of building 30,000 km of high-speed rail connecting 80% of major cities in China.
Japan’s Shinkansen Bullet Train network expansion project is expected to support industry growth. The Shinkansen network includes the Hokkaido line from Aomori to Hakodate, with plans to extend Sapporo by 2030. In August 2021, South Korea released its fourth national railway plan with an investment of USD 100 billion. The main objective of this plan is to prepare a competitive railway network with an emphasis on green transportation. This plan covers 44 projects with a length of 1,448 kilometers, and this network will be expanded by 125%.
A High Degree of Competition is Evident in Industry Landscape
CRRC Corporation Limited, Alstom, Hyundai Rotem Company, Siemens Mobility, GE Transportation, Wabtec Corporation, Hitachi Railway Systems, CISC Transmashholding, Stadler Rail, and Kawasaki Railcar Manufacturing Co., Ltd. are key players in the rolling stock industry. These players adopt various strategies such as product differentiation & development, strategic partnerships & collaborations, and expansion of distribution network to gain a strong foothold in the market. In July 2022, CRRC tied with Titagrah Wagons to supply 216 coaches for Bangalore’s Metro Phase 2. In January 2023, Siemens Mobility was awarded USD 3.31 billion in projects from Indian Railways. Siemens Mobility will deliver 1,200 locomotives with 9,000 horsepower (HP). The deliveries will be provided over eleven years, and the company will offer 35 years of full-service maintenance.
In January 2021, Alstom completed the acquisition of Bombardier Transportation for USD 6.06 Billion. This acquisition will solidify Alstom’s leadership in the sustainable mobility industry. The newly formed entity will have a combined pro forma revenue of around USD 17.29 billion and USD 78.32 billion combined backlog. In March 2023, the Ministry of Transportation of Egypt was awarded a contract worth USD 474 million to CJSC Transmashholding for providing maintenance services for 12 years. Such initiatives will help the company to gain a competitive advantage and increase profitability.
An Infographic Representation of Rolling Stock Market
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The global rolling stock market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading product applications. Besides, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors contributing to the industry's growth in recent years.
CAGR of 2.5% from 2023-2030
Value (USD Billion)
Fortune Business Insights says that the market size was USD 50.03 billion in 2022 and is projected to register USD 60.35 billion in 2030.
The market is expected to register a CAGR of 2.5% during the forecast period 2023-2030.
A positive outlook on passenger traffic will augment the market growth.
Asia Pacific led the market in 2022.
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