[199 Pages Report] The global railway system market was valued at USD 25.1 billion in 2022 and is expected to reach USD 30.9 billion by 2027, at a CAGR of 4.2% during the forecast period 2022 to 2027. Inadequate infrastructure and degradation of air quality are some of the key concerns of major metropolitan cities. High gasoline prices, traffic congestion, and GHG emissions are some of the other challenges for city dwellers. In such a scenario, public transportation offers several benefits over private conveyance. Urban transit systems help reduce traffic congestion and are more energy-efficient than other modes of transport. The increasing urbanization is expected to drive the growth of rapid transit systems such as metro, light rail, electric multiple units, and diesel multiple units. In addition, many countries are increasingly investing in metros to reduce traffic on the roads. India, China, Egypt, and Brazil are aggressively investing in the development of metro infrastructure. These metros are equipped with advanced systems such as train information systems, train safety systems, and HVAC systems. Thus, the increasing number of metro projects will fuel the market for railway systems.
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In the past few years, rising income levels have increased the demand for personal mobility and led to a rise in road traffic in major cities across the globe. However, road congestion and travel time in urban areas increased due to the insufficient road network infrastructure. Thus, urban planners and local governments are merging rapid transit networks and tramways with the existing city infrastructure. Commuters are also seeking eco-friendly, reliable, and cost-effective means of transportation. Developed nations such as Germany, France, and the UK are actively promoting the use of rapid transit systems to reduce traffic congestion. Moreover, countries such as India, China, Egypt, Brazil, and the UAE have increased investments in the development of metros. For example, in 2021, 823.5 km metro rail in India was under construction in more than 15 cities. In 2020, China planned an investment of USD 4.8 billion for 16 metro lines for a total length of 304.6 km and five railway projects for 132.1 km. Apart from this, in 2021, the Chinese government announced to invest USD 154.88 billion in expanding its railway network by 22,000 km by 2025. Also, other developed countries plan to increase their rail network, which would drive the railway system market.
Restraint
: Capital-intensive and high development complexitiesRolling stock and supporting infrastructure are highly capital-intensive and necessitate huge financial support from local and country-level governments. As metropolitan regions witness traffic congestion and increased demand for public transport, government bodies plan to invest heavily in developing support infrastructure and improving existing infrastructure. These investments would result in new orders for rolling stock. However, the high cost of new rail vehicles could discourage investments and act as a restraint. For instance, the construction of Klang Valley Mass Rapid Transit Line 3 has been cancelled as a large investment was made for the development of MRT Line 1 and Line 2.
Also, the Return on Investment (ROI) period is long, which could hinder the growth of capital-intensive projects or technologies. For instance, the commercial adoption of Maglev is restricted because of the cost of related infrastructure, which can go up to USD 50 million to 200 million per mile, making it financially unviable for many.
Opportunity:
Government support for alternative fuel-powered railway operationsThe increasing focus of government bodies across the globe on the adoption of emission-free public transport modes, including railway operations of passenger and freight transport, might create an opportunity for OEMs to develop more hybrid trains that are compliant with emission standards. Although railways are not the biggest source of air pollution as far as public and freight transport mediums are considered, opting for hybrid trains will significantly reduce the emission levels caused by conventional diesel trains. Also, hybrid trains are low on operating costs, which will save money for governments as well. Many governments have recognized the need for it and thus, are acting toward achieving the same. For instance, in 2018, the Indian government approved the proposal of 100% electrification of trains in the country by 2022, which will save the Indian Railways around 2.9 billion litres of diesel annually. The government also claimed savings of around INR 13,510 crore (~USD 1.9 billion) annually by 100% electrification. The UK government will be phasing out trains that run solely on diesel fuel by 2040. As of 2018-19, around 29% of total trains in the UK are operated only on diesel; thus, the decision to phase these out will create a significant opportunity for the railway system market in the future.
Challenge:
High overhaul and maintenance costsThe performance of railway system maintenance has a great influence on passenger safety and comfort on board. Leading companies have developed advanced comfort and safety systems for vehicles. For instance, Hitachi has developed active suspensions for Shinkansen bullet trains (Japan). However, continuous advancements in comfort and safety functions have made the railway system complicated. As a result, the railway system needs periodic maintenance to ensure its reliability. Regular maintenance and repair of the railway system are expensive. Hence, the additional recurring expense of overhauls and maintenance could hinder the growth of the railway system market.
The US has the largest rail network in the world, covering over 250,000 km. Many decision-makers in the US support higher public transport investments to achieve more sustainable development and increased urban mobility. The US government has been involved in the redevelopment, expansion, and modernization of the existing transportation modes over the past few years. To promote rail passenger transportation, the US railways are being updated with new safety systems and new fundings made to complete pending projects. The train system will be redesigned with the help of USD 80 billion in federal funding as part of the US President’s USD 2.3 trillion infrastructure modernization plan. The "race" to potentially secure USD 80 billion in funding for Amtrak and other rail initiatives has begun. Amtrak outlines its 15-year plan in a document called Connect US.
Brazil is one of the fastest-growing markets for rolling stock and related railway systems in the RoW region. The availability of cheap labor has encouraged several key players to penetrate the manufacturing sector in Brazil. The railways in the country operate on broad, meter, standard, and dual gauges with a network length of 4,932 km, 23,773 km, 202.4 km, and 396 km, respectively. According to the Brazilian Association of the Railway Industry (ABIFER) September 2021 "Rail Month" report, investments in the rail industry in the country stood at more than USD 16.56 billion (BRL 91.972 billion). The federal government made a concerted effort during the month to attract private investments in the extension of the railway network and promote train travel from north to south through the Ministry of Infrastructure (MINFRA).
OEMs based in the US have focused on manufacturing locomotives for all kinds of trains, including light rail, tramways, and metros and conventional trains, due to an increase in customer demand for comfort and safety. Many emerging players are offering advanced railway systems in the region. Thermo King, a US-based railway system manufacturer, provides HVAC for driver cabins that can clean the air from all viruses.
Diesel locomotives are mostly used in the US and Canada as the area of these countries is huge, and the distance travelled for goods and passenger transportation is large. This would significantly increase the cost of infrastructure in the case of electric locomotives. In the US, rolling stock is mostly used for freight transportation, and passenger transportation is primarily undertaken through airlines.
OEMs such as Alstom SA (France) and Montreal Locomotive Works (Canada) are also planning to establish new production facilities in Mexico and Canada to cater to the rising demand, which is expected to drive the market in this region
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Report Metric
Details
Market Revenue in 2022
USD 25.1 billion
Estimated Value by 2027
USD 30.9 billion
Growth Rate
Poised to grow at a CAGR of 4.2%
Market Segmentation
Application, System Type, Transit Type, and Region
Market Driver
Increasing preference for rail public transport to reduce traffic congestion
Market Opportunity
Government support for alternative fuel-powered railway operations
Geographies covered
Asia Pacific, Europe, North America, and RoW
This research report categorizes the railway system market on the basis of application, transit type, system type, and region.
The global railway system market is estimated to be USD 25.1 billion in 2022 and projected to reach USD 30.9 million by 2027, at a CAGR of 4.2%
The report includes European countries such as:
Yes, the report covers the railway system market for different system types at regional level.
Yes, the report covers the market size of different transit type at a global level .
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