Our own study of the global light rail market, based on research carried out using IRJ Pro’s Fleet Monitor database, shows a massive 43% jump in LRV sales in 2016 to reach 1454 vehicles. Here the main source of demand was in Europe and North America where substantial orders were recorded.
Growth in the transit market is being driven by the construction of new lines and the need to replace life-expired vehicles. In developed countries, cities are increasingly turning to rail as a means of reducing worsening congestion and pollution. These factors are also driving growth in developing countries coupled with rapidly increasing urbanisation.
While the number of cities with a metro has grown from just 84 in 1990 to 159 last year, and the extent of metro networks worldwide has increased to 12,300km, SCI says there are still around 140 cities with a population exceeding 1 million which do not have a metro. Most of these cities are in Asia, the Middle East and Africa. China’s unprecedented investment in metro systems shows no sign of abating, and India is now building new networks. SCI expects these two countries to account for a large proportion of the 6600km of additional metro lines to be put into operation by 2022, followed by another 4400 km by 2026.
Riyadh has now reached the half-way point in the construction of its ambitious six-line metro project, and other Saudi Arabian cities are planning or building metro or light rail systems. Elsewhere in the Middle East, the Dubai metro is being expanded, while the Doha metro is rapidly taking shape, and a metro is planned in Kuwait City and a light rail network in Abu Dhabi.
This contrasts starkly with the situation in sub-Saharan Africa where there is great potential, providing funding can be found, as hardly any cities outside South Africa have any form of urban rail transport.
China’s CRRC Corporation is steadily expanding its global reach spurred on by contracting demand at home. In 2016, CRRC booked orders from abroad worth $US 8.1bn which it says was 40% more than in 2015. CRRC is already dominating the world market for metro vehicles with a 60% share according to SCI Verkehr, and leads the market in Asia, Africa/Middle East and Eastern Europe.
CRRC is starting to make inroads into other parts of the world. In the United States, CRRC has just won a contract to supply 64 cars for the Los Angeles metro with options for up 218 additional vehicles. This follows orders in March from Chicago Transit Authority for 490 metro cars with an option for another 356 vehicles, and Septa in Philadelphia for 45 double-deck commuter rail coaches.
The company also won an order last month in the small, but prestigious high-speed train market. CRRC will supply a fleet of 11 eight-car trains with a design speed of 350km/h to operate on the Jakarta - Bandung high-speed line.
Such developments no doubt lie behind discussions which are understood to be underway for a possible merger between the rail divisions of Siemens and Bombardier. Whether these talks come to anything remains to be seen, but the relentless march of CRRC is clearly a cause for concern among its competitors.
In the meantime, there is another factor which is having an impact on the rolling stock market: extremely low interest rates. This phenomenon is having a profound effect on customer behaviour by making it affordable to replace entire train fleets at once without regard to the age or condition of the trains they replace.
Abellio Greater Anglia is the first British franchise to opt for complete fleet replacement. A total of 1043 cars worth £1.4bn are being procured through two build-and-maintain contracts funded by two rolling stock leasing companies (Roscos). The new trains should improve reliability and help meet pent up passenger demand.
First Group and MTR won the seven-year South Western franchise in March and announced plans to ditch a fleet of Alstom EMUs which only recently were extensively refurbished and reformed to add an extra coach to each four-car set, and a fleet of 30 Desiro City EMUs currently being delivered by Siemens. In their place, First Group and MTR will acquire 750 new cars and refurbish and return to service 18 30-year-old former British Rail EMUs.
Clearly such decisions are driven by train leasing costs, but the consequence is that the Roscos will have to find new homes for a lot of trains. Failure to do so could force the Roscos to scrap perfectly-serviceable trains. This would reduce train life and could result in higher leasing charges in the future. Perhaps this will be a case of short-term gain for long-term pain.