For those of you who thought InnoTrans couldn't get any bigger, think again. The 10th edition will for the first time fill 40 halls at the vast Messe Berlin exhibition centre, and the number of exhibitors has increased by 7.4% since 2012 to 2700. With exhibitors from 51 countries, international participation at InnoTrans has grown by 3% to reach almost 60%.
While European companies still dominate the show, firms from outside Europe are continuing to make inroads and this year will account for 17% of exhibitors. There has been a strong increase in the number of exhibitors from North and South America, China, and India, while Turkish companies will occupy 50% more floor space than in 2012 so that Turkey is now among the top 10 countries exhibiting at InnoTrans. These increases reflect the changing face of the global rail industry and the growing importance of South America - particularly Brazil - as well as the Middle East, and Asia.
SCI Verkehr's study of the world market for railway technology, published this month, shows steady overall growth during the last four years from a total value of €131bn in 2010 to €162bn currently, despite the global financial crisis and recession which continues to affect much of Europe. The forecast is for continued growth, with the market expected to be €190bn by 2018.
What is more, the rail market has outperformed SCI Verkehr's previous predictions. In 2010, SCI Verkehr expected the market to expand to €160bn by 2015, but the latest study shows that it has already exceeded that figure.
Obviously, the rates of growth vary by region. The previous studies show that despite the economic downturn, the North American and European market remained static between 2010 and 2012, but have grown since then, with North America growing from €19.9bn in 2012 to €25bn this year, while Western Europe has expanded from €39.7bn to €41.6bn.
Conversely Asia has enjoyed continuous growth since 2010, increasing from €36.5bn to €46bn in 2014. As a result, Asia has powered ahead of Western Europe and is now the world's the largest rail market. Asia is expected to move ahead even more with a predicted annual growth of 4% compared with annual growth rates of 3.2% for Western Europe and 3.3% for North America.
New line construction in the Middle East and huge orders for locomotives and rolling stock in South Africa are the main growth drivers in the Africa/Middle East region. With more construction planned, particularly in Saudi Arabia and the Gulf states, this region has the highest annual growth rate at 10.6%.
While not as glamorous as the €18.5bn high-speed market, or as dynamic as the €20.5bn urban rail market with annual growth of 7%, the huge €120.7bn conventional rail market is where manufacturers will continue to generate most of their sales. But even here there are fluctuations with the acquisition of freight wagons expected to be affected by lower worldwide demand for raw materials.
Major projects can affect the fortunes of particular markets due to their very size. While annual growth of just 1.3% is forecast for the high-speed market at present, the outlook could change if a number of large schemes are approved such as HS2 in Britain, the bulk of the Californian scheme, and Singapore - Kuala Lumpur. Turkey continues to expand its high-speed network, and while the rate of expansion in China will slow after 2015, the programme of new line construction is still impressive.
The ranking of the major rolling stock suppliers according to new vehicle revenue has produced some surprises since 2012. The big two Chinese manufacturers, CNR and CSR, still occupy the two top positions largely due to the strength and size of their home market. Having said that, they are having increasing success with exports, mainly to countries where China is investing heavily. Although the two companies have the technology needed to penetrate more established markets they need to improve the quality of their products in order to become more successful globally, although judging by recent technical progress in China this may not take long.
Transmashholding, which has a joint venture with Alstom, jumped from sixth to fourth place, again largely due to strong demand from its home market, Russia, and the wider CIS area. Strong sales have propelled Stadler and Trinity Industries into the top 10 for the first time, pushing Hyundai Rotem and Kawasaki out.
Looking ahead, the recent deal between GE and Alstom should strengthen Alstom's position, while the pending sale by Finmeccanica of AnsaldoBreda and Ansaldo STS could result in a shakeup. According to Reuters, Hitachi and Bombardier, with a joint venture with AnsaldoBreda for the ETR 400 high-speed train fleet for Trenitalia, are in the front running to bid for the Italian companies, with bids also expected from CAF, CNR with Insigma Technology, and Thales.
A win for Hitachi would considerably strengthen its position in Europe and its ambition to become a major world player in the rail market. A Bombardier bid could face complications with the competition authorities. A successful bid for CNR/ Insigma would give CNR a foothold in Europe, while wins for CAF or Thales would strengthen their position.
Whatever the outcome, the rail market will continue to be dynamic and has shown its ability to weather economic and political storms. What a great industry to be involved in.
