SCI/VERKEHR 2016

PASSENGER COACHES – GLOBAL MARKET TRENDS

Forecasts, Installed Bases, Suppliers, Procurement Projects

Passenger Coaches – Global Market Trends

Passenger Coaches – Gobal Market Trendsf Forecasts, Installed Bases, Suppliers, Proucurement Projects

This study entitled “Passenger Coaches – Global Market Trends” provides a compre- hensive overview into the structure, installed bases, procurements, manufacturers and development trends in the rail vehicle segment analysed. Based on current developments in passenger , this study, entitled “Passenger Coaches – Global Market Trends”, delivers an analysis and sound estimate of the market for passenger coaches. Based on the successful preceding study from 2013 and experience gained from more than 2 000 projects in the field of railway technology, in the past few years SCI Verkehr has verified the central input data and optimised its forecasting methodology. We have reviewed and updated all chapters of the preceding study.

The market study “Passenger Coaches – Global Market Trends” provides in particular: – Regionally differentiated glance at the worldwide market for passenger coaches including an in-depth analysis of the most important individual country markets, especially in Eu- rope – Comprehensive analysis of the current installed bases concerning quantities, age struc- tures, operational purposes as well as future procurement potentials – Overview of the most important drivers behind the procurement and refurbishment of pas- senger coaches – Analysis of the current market shares of important passenger coach manufacturers – Overview of passenger coach manufacturers including a brief descriptionh of their current range of products and services – Overview of the most important current and planned new procurement and refurbishment projects in the world market regions – Condensed presentation of the most important fleet-specific features of passenger coach- es in the form of diagrams – Llist of operators‘ rolling stock and the current passenger coach procurements in the an- nex to the study

All in all, the study provides a well-founded and comprehensive analysis of the worldwide market for passenger coaches. The study therefore provides both companies established in the railway industry as well as active and potential operators of passenger rail transport ser- vices with important indicators for operational and strategic planning. SCI Verkehr analyses markets from the bottom up: based upon systematic observation of the railway markets, a detailed worldwide database of the installed bases and projects forms the basis for in-depth studies on the various segments of the railway industry and the most im- portant regional focus markets. Within the scope of the continuous creation of the Multi Client Series, SCI Verkehr systematically analyses more than 100 core countries.

The study is available in English from June 2016.

Your contact: Ahmed Yasin Marketing and Sales Phone: +49-221-93178-20 Fax: +49-221-93178-78 E-Mail [email protected]

© SCI Verkehr GmbH • www.sci.de • Dieseltriebwagen/Elektrotriebwagen – weltweite Marktentwicklungen• 2 Passenger Coaches – Global Market Trends

Contents

1 Executive Summary: Passenger Coaches – Global Market Trends ...... 19

2 Market Delimitation and Methodology of the Study...... 37 2.1 Objective of the Market Analysis ...... 37 2.2 Delimitation of the Railway Technology Market ...... 38 2.3 Market Analysis Methodology ...... 46 2.4 Analysis of Drivers in the Railway Industries Market ...... 50 3 The Market for Passenger Coaches in Western Europe ...... 51 3.1 Total Market ...... 51 3.2 Benelux States ...... 61 3.3 Germany ...... 63 3.4 France ...... 70 3.5 Italy ...... 74 3.6 Austria ...... 79 3.7 Switzerland ...... 82 3.8 Spain ...... 85 4 The Market for Passenger Coaches in Eastern Europe ...... 89 4.1 Total Market ...... 89 4.2 ...... 96 4.3 Romania ...... 100 4.4 Czech Republic ...... 102 5 The Market for Passenger Coaches in Asia ...... 105 5.1 Total Market ...... 105 5.2 China ...... 112 5.3 ...... 115 6 The Market for Passenger Coaches in North America ...... 121 7 The Market for Passenger Coaches in the CIS ...... 131 8 The Market for Passenger Coaches in South America ...... 141 9 The Market for Passenger Coaches in Africa/the Middle East ...... 149 10 The Market for Passenger Coaches in Australia/Pacific ...... 159 Annex A: Fact Sheets Manufacturers ...... 164 Annex B: Fleet Overview by Region ...... 195 Annex C: Installed Bases of the Operators: List of all Passenger Coach Fleets ...... 225

© SCI Verkehr GmbH • www.sci.de • Reisezugwagen – weltweite Marktentwicklungen• 3 Passenger Coaches – Global Market Trends

4 © SCI Verkehr GmbH • www.sci.de Passenger Coaches – Global Market Trends• Passenger Coaches – Global Market Trends

Extract from the text:

Market Overview

Eastern Europe SD Trend DD Trend

Units 2015 11.000 550  

Average development 2015-2020 (p.a.) -2,2% 0,8% Stock Average age 2015 (in years) 31  28 

Average volume 2014-2016 (EUR million p.a.) XX 15

Average development 2015-2020 ( p.a.) X.X%  -4,8%  Market Market for

new new vehicles Volatility market volume 2015-2020 (SD) X.X% n/a

Average volume 2014-2016 (EUR million p.a.) XX 20

Average development 2015-2020 ( p.a.) X.X%  3,7% 

Figure 1:

Market Market for after-sales Volatility market volume 2015-2020 (SD) X.X% 2,1% Market overview passen- ger coaches Eastern  Boom/strong growth  small growth  stagnation  small decrease  clear decline Europe

The market for new passenger coaches in Eastern Europe currently has a volume of just under EUR XXX million, less than a quarter of the Western European value. In addition, the volume is considerably below the figure for multiple units which presents by far the most important vehicle segment in the market for new vehicles in Eastern Europe. Because of the comparatively high number of passenger coaches in the Eastern European fleets, the market is still of importance despite strongly decreasing market volumes in the medium term. The after-sales volume will slightly increase despite declining fleet sizes because of the higher quality level of the vehicles and further refurbishment programs to keep existing vehicles in a poor technological standard in service.

Market Environment/Transport Market

Transport performance in Eastern Europe has declined considerably since the millennium, except of a slight recovery between 2005 and 2007, between 2008 and 2010 alone the value dropped by nearly 10%. This slump was particularly driven by the uninterrupted trend to- wards motorisation in important countries such as Poland and the Czech Republic. Further- more, structural and financial problems of the Eastern European railway companies partly led to reduced transport services. As an example, major parts of passenger rail transport ser- vices in Greece were cancelled due to the debts crisis. Unprofitable transport services (par- ticularly on secondary lines) in other Eastern European countries have also been cancelled as a result of the economic pressure. This trend has continued in the same form until today. In the next few years, SCI Verkehr expects a slight increase in transport performance, mainly based on increasing funds by the for procurements of modern railway vehi- cles as well as a growing competitive pressure due to expanding activities of private opera- tors.

[…]

Installed base/age structure

The installed base of passenger coaches currently in operation in Eastern Europe comprises around 11 500 vehicles. Due to comparatively large numbers of outdated passenger coach- es combined with a lack of funds of the state railways, some of them are being refitted or

© SCI Verkehr GmbH • www.sci.de • Reisezugwagen – weltweite Marktentwicklungen• 5 Passenger Coaches – Global Market Trends

upgraded for operation. Within the next years, the total passenger coach fleet in Eastern Eu- rope will decrease further, mainly driven by the replacement of -hauled passenger coach compositions by multiple units and the often overdimensioned fleets (heavily increas- ing motorisation after the fall of the iron curtain). The largest installed bases can be found in the Czech Rebublic, Poland, Hungary and Romania. These four countries accommodate the only passenger coach fleets with more than X XXX units in Eastern Europe.

Double-deck coaches in Eastern Europe are operated by railway companies in the Czech Republic, Romania, Poland and Slovakia. The share of double-deck coaches in the total fleet amounts to below 5% and is thus fairly small.

In July 2016, the Bosnian state railway ZFBH will inaugurate the long-delayed fleet of 9 comprising 81 passenger coaches manufactured by Talgo and delivered in 2010/2011. The 5 day and 4 overnight trains have been in storage for five years and could not start operation due to the poor condition of the railway infrastructure.

The average age of the passenger coach fleet in Eastern Europe has remained at an almost constant level with a slightly decreasing tendency and is still above 30 years. Main drivers are ongoing withdrawals within the larger fleets as well as a small number of new procurements based on the difficult financial situation of most countries since the 1990s.

[…]

Installed base [units] Eastern Europe

Czech Republic

Poland

HungaryXXXX

RomaniaXXXX

SlovakiaXXXX

TurkeyXXXX

BulgariaXXXX

SerbiaXXXX

CroatiaXXXX

GreeceXXXX Single Deck Double Deck otherXXXX Figure 37: Installed base overview: - 500XXXX 1.000XXXX 1.500XXXX 2.000XXXX 2.500XXXX passenger coaches in Eastern Europe in 2015 © SCI Verkehr GmbH (by country)

6 © SCI Verkehr GmbH • www.sci.de Passenger Coaches – Global Market Trends• Passenger Coaches – Global Market Trends

Manufacturers/Products/Market Shares

The Romanian manufacturer Astra Vagoane Calatori located in Arad has had the highest market share in Eastern Europe with constant delivery numbers for the Romanian state rail- way CFR Calatori until 2013. In the following years, no new passenger coaches were ordered in Romania, instead the company received orders from the Czech Republic (RegioJet), Egypt (ENR) and Brazil (Vale).

With the delivery of seven Railjet trainsets (7 driving trailers as well as 42 intermediate coach- es) to the Czech state railway Ceske Drahy (CD), Siemens followed in the time period 2011- 2015 in second place. The trainsets were originallay a contract option between Austrian in- cumbent ÖBB and Siemens, which was taken over by CD, as ÖBB cancelled the option due to financial reasons. The first trainset was delivered in 2014 and operates on cross-border connections between the Czech Republic and Austria.

[…]

The vehicles delivered are mainly modern Intercity coaches which are partly adapted to the UIC design. The only double-deck coach delivery in the relevant time period comprised the 30 vehicles manufactured by Skoda mentioned above. Intercity coaches will continue to make up the majority of procurements in the future; in regional transport, older coaches are still often substituted with multiple units.

Market shares manufacturers 2011-2015 [units] Eastern Europe 2% Astra Vagoane Calatori 6% Siemens

8% XXX

XXX

39% XXX 8% XXX

XXX

other

10%

Total: ~ XXX units

Figure 2: 13% Market shares of passen- 14% ger coach manufacturers in Eastern Europe 2011- © SCI Verkehr GmbH 2015

© SCI Verkehr GmbH • www.sci.de • Reisezugwagen – weltweite Marktentwicklungen• 7 Passenger Coaches – Global Market Trends

Market volume and market development

The current market volume for new vehicles amounts to almost EUR XXX million per year; the after-sales market has a volume of around EUR XXX million per year.

The following drivers will have an effect on the future demand trend for passenger coaches

Drivers of pro- Trend curements for pas- Brief description Relevance (5 years) senger coaches

The financial situation of the public budgets is still difficult, pro- curement projects are often going to be postponed, the same Investment funds  applies to already published tenders. Some investments are supported by funding programmes of the EU. Large fleet of old vehicles makes new procurements necessary. Fleet structure Because of the non-operational condition of many vehicles,  considerable parts of the fleet have been taken out of operation. […] […] […] […] Relevance for procurements: = very high, = high, = medium, = low, = none 5-year trend::  = strongly increasing,  = increasing,  = constant,  = decreasing  =strongly decreasing

Following lower volumes of new procurements in 2011 and 2012, the market volume reached the level of EUR XXX million again in 2013, remaining on a generally high level up to 2016. The most influential project for the recovery of the market volume was the delivery of XX new Railjet coaches to Czech state railway CD in 2014/2015, the delivery of 30 double-deck coaches manufactured by Skoda for Slovak state railway ZSSK in 2013, as well as the takeo- ver of XX new intercity coaches by PKP Intercity from H. Cegielski in 2014/2015.

[…]

Market volume [million EUR] Eastern Europe

400XXX XXX400

350XXX XXX350

300XXX XXX300

250XXX XXX250

200XXX XXX200

150XXX XXX150

100XXX XXX100 Figure 40: Analysis and forecast XXX50 XXX50 market volumes new vehicles and after-sales 0 0 services passenger 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 coaches in Eastern Europe in the period 2010–2020 SD New vehicles DD New vehicles After-Sales © SCI Verkehr GmbH (in EUR millions)

8 © SCI Verkehr GmbH • www.sci.de Passenger Coaches – Global Market Trends• Passenger Coaches – Global Market Trends

4.2 Poland

Market Environment/Transport Market

Poland is the largest passenger rail transport market in Eastern Europe, accounting for appr. 33% of the total transport performance in Eastern Europe in 2015. Between 2011 and 2015, the transport performance decreased by around 3.5%, predominantly caused by the poor state of the rail infrastructure and a shrinking population. Until 2020, SCI Verkehr expects a trend reverse towards an annual growth of 3.1%, predominantly driven by improvements of the service quality in passenger rail transport resulting from the restructured regional rail op- erators as well as the long-term urbanisation process.

[…]

In consequence, the regional operators are not directly competing with each other. Until to- day, Arriva RP, active since 2007, is the only private standard-gauge operator in commuter and regional rail . The private Czech operator Leo Express applied for market entry in 2013 but was refused by the infrastructure manager PKP PLK.

[…]

Installed base/age structure

The passenger coach fleet in Poland currently comprises almost X 000 vehicles, most of which are owned by PKP Intercity. Because a comprehensive part of the fleet was taken out of service or scrapped, it has shrunk continuously in the last few years. In January 2016, PKP Intercity announced the modernisation of XXX passenger coaches to re-enter regular long- distance services.

PKP Intercity operates around 80% of the passenger coach fleet in Poland, almost 20% are owned by Przewozy Regionalne. The third-largest operator, Koleje Mazoviecki, operates be- sides more than 200 multiple units a small passenger coach fleet of 37 double-deck coaches. The fleet of Przewozy Regionalne mentioned above has another 130 double-deck coaches.

[…]

Important Current and Planned Procurement Projects

Level (type) Units Time period Description

Mazowieckie voivodship regional passenger operator Koleje Ma- zowieckie (KM) has selected Pesa to supply two 3 KV DC electric , 20 double-deck intermediate coaches and two double- deck driving trailers. These are the first double-deck cars to be pro- duced in Poland, and will supplement the fleet of 11 locomotives, 26 DD 22 2015 double-deck intermediate coaches and 11 double-deck driving trailers supplied to KM by Bombardier. Pesa's bid of EUR 61.7 million beat the bid of Newag which was EUR 24.3 million higher. The difference is accounted for by Newag offering Bombardier Traxx locomotives with a coach based on Bombardier double-deck design. […] […] […] […]

© SCI Verkehr GmbH • www.sci.de • Reisezugwagen – weltweite Marktentwicklungen• 9 Passenger Coaches – Global Market Trends

Market volume and market development

The market for new passenger coaches in Poland currently has a volume of EUR XX million per year as a result of the procurement of XX single-deck passenger coaches from H. Cegielski1 as well as the procurement of 22 double-deck coaches of double-deck coach- es by from Pesa.

Nonetheless, the refurbishment of the fleet and the procurement of high-speed trains and multiple units is still a priority, especially in long-distance transport. In June 2013, the first of 20 high-speed trains of the type (manufacturer: ) were presented through a loan by the European Investment Bank amounting to EUR 224 million. In 2015, PKP Intercity awarded a contract covering the supply of 20 8-car high-speed electric multiple units to the Stadler/Newag consortium. In consequence, the importance of passenger coaches in main- line/intercity transport also decreases.

[…]

Important current and planned refurbishment projects

Level (ty- Time peri- Country Units Description pe) od In January 2016, PKP Intercity has contracted its subsidiary ZUT Remtrak for the modernisation and periodic repair of more than 400 coaches. The coaches will be upgraded for PL SD 410 2016-2018 speeds of up to 160 or 200 km/h and equipped with new seats, air conditioning, power sockets and electronic passen- ger information system.

1 Some of them were already manufactured in 2011 but delivered in 2015.

10 © SCI Verkehr GmbH • www.sci.de Passenger Coaches – Global Market Trends• Passenger Coaches – Global Market Trends

ANNEX A: EXAMPLE

Transtech Oy

Overview Head Office: Oulu (Finland) Shareholders: Škoda Transportation (majority shareholder), Pritech Oy (minority shareholder) Management: Matti Haapakangas (Managing Director) Employees (2015): 530 Turnover (2014): EUR 95 million Profits (2014): undeclared Established in 1985, Transtech is a Finnish company manufacturing trams and double-deck railway vehicles with the main products being Intercity coaches and sleeping cars. In addition, the company is a contract manufacturer of engineering products, such as medium weight welded metal structures. Its main customer is the Finnish state railways. Trams are also exported to the Baltic states. Turnover of Transtech in 2014 rose to EUR 95 million. Important orders came from Finnish railways VR for new passenger coaches and from the city of Helsinki for new trams In August 2015, Škoda Tranportation Group became the new majority shareholder in Transtech Ltd. The member- ship in the big international group strengthened significantly Transtech's position the export rolling stock market. Transtech produces double deck passenger coaches, including restaurant and sleeping cars. – In 2014, the first of 26 double deck restaurant coaches were delivered to VR, worth EUR 68 million. – In 2015, the company won a tender for the delivery of 27 passenger coaches for VR, worth EUR 90 million. Production sites

Transtech produces its passenger coaches and tram cars at its production site in Otanmäki, Finland.

Country Site Vehicles Comment Employees: Around 400 Finland Otanmäki PC, LRV Production capacity: 40 cars p.a. (SCI est.)

World market Comment Product share information (2011–2015) Transtech produces high standard double-deck coaches exclusive- Double Deck <1% ly for the domestic market. It even offers double-deck car carriers for vehicle transport.

© SCI Verkehr GmbH • www.sci.de • Reisezugwagen – weltweite Marktentwicklungen• 11 Passenger Coaches – Global Market Trends

ANNEX B: EXAMPLE

North America

Installed Base / Country shares Installed Base / Operator

Installed base [units] Installed base [units] North America North America

USA USA

Canada Canada

Single Deck Single Deck

Mexico Double Deck Mexico Double Deck historic and tourist coaches historic and tourist coaches

- 1,000X.XXX 2,000X.XXX 3,000X.XXX 4,000X.XXX 5,000X.XXX 6,000X.XXX X.XXX7,000 - 1,000X,XXX 2,000X,XXX 3,000X,XXX 4,000X,XXX 5,000X,XXX 6,000X,XXX X,XXX7,000 © SCI Verkehr GmbH © SCI Verkehr GmbH

Installed Base / Age distribution Installed base / Gauge

Age distribution fleet* [units] Installed base by gauge [units] North America North America

1600X,XXX 2% >0% Single Deck 1,435 mm 1400X,XXX Double Deck 914 mm 1200X,XXX 381 mm

1000X,XXX

X,XXX800

X,XXX600

X,XXX400 Total: ~ X XXX units X,XXX200

0 before 1976 1976-1985 1986-1995 1996-2005 2006-2015 98%

© SCI Verkehr GmbH * partly estimated by SCI Verkehr, without historical and tourist coaches © SCI Verkehr GmbH

Installed Base / Level Installed Base / Allocation

Installed base by level [units] Installed base by allocation [units] North America North America

12% 12% Single Deck Regional Services Double Deck

historic and tourist Mainline Services 38% Museum and Tourist Services

26%

62% Total: Total: ~ X XXX units ~ X XXX units

50%

© SCI Verkehr GmbH © SCI Verkehr GmbH

12 © SCI Verkehr GmbH • www.sci.de Passenger Coaches – Global Market Trends• Passenger Coaches – Global Market Trends

North America

Overview

Delivery / Country (2011-2015) Delivery / Operator (2011-2015)

Deliveries 2011 - 2015 [units] North America Delivery by operator 2011 - 2015 [units] North America

X.XXX

USA Metrolinx

X.XXX

Metrolink

X.XXX

Canada X.XXX

Single Deck Single Deck AMT Double Deck Double Deck

- X.XXX 50 X.XXX 100 X.XXX150 X.XXX 200 X.XXX250 - X.XXX 100 X.XXX 200 X.XXX 300 X.XXX 400 X.XXX 500 X.XXX 600 X.XXX 700 © SCI Verkehr GmbH © SCI Verkehr GmbH

Delivery / Manufacturer (2011-2015) Delivery / Type (2011-2015)

Market shares manufacturers 2011-2015 [units] North America Delivery 2011 - 2015 by type [units] North America 2% 5% X.XXX 14% 7% Hyundai Rotem Coach CAF Driving Trailer X.XXX

13% X.XXX X.XXX 50%

Total: Total: ~ X XXX units ~ X XXX

23% 86%

© SCI Verkehr GmbH © SCI Verkehr GmbH

Delivery / Level (2011-2015) Delivery / Allocation (2011-2015)

Delivery 2011 - 2015 by level [units] North America Delivery 2011 - 2015 by allocation [units] North America

Single Deck 23% Regional Services Double Deck 26%

Mainline Services

Total: Total: ~ X XXX units ~ X XXX units 74% 77%

© SCI Verkehr GmbH © SCI Verkehr GmbH

© SCI Verkehr GmbH • www.sci.de • Reisezugwagen – weltweite Marktentwicklungen• 13 Passenger Coaches – Global Market Trends

ANNEX C: EXAMPLE

Num- Delivery Region Country Operator ber of Gauge Main supplier Period units

AF Raja Passenger Trains Co 129 1960 - 2004 1435 exposed Tehran Urban & Suburban China CNR Corporation AF Iran 48 1998 - 1998 1435 Railway Company Limited Tehran Urban & Suburban China CNR Corporation AF Iran 160 2009 - 2011 1435 Railway Company Limited AF 156 1970 - 1990 1435 AF Iraq Iraqi Republic Railways 30 1980 - 1980 1435 Astra Vagoane Calatori SA AF Israel Israel Railways 32 2002 - 2002 1435 ALSTOM Transport SA Bombardier Transportation AF Israel Israel Railways 12 2003 - 2003 1435 GmbH Siemens AG, Mobility AF Israel Israel Railways 79 2008 - 2009 1435 Division AF Israel Israel Railways 5 2002 - 2002 1435 ALSTOM Transport SA Bombardier Transportation AF Israel Israel Railways 47 2005 - 2006 1435 GmbH Bombardier Transportation AF Israel Israel Railways 7 2005 - 2006 1435 GmbH Bombardier Transportation AF Israel Israel Railways 18 2004 - 2004 1435 GmbH Bombardier Transportation AF Israel Israel Railways 15 2001 - 2002 1435 GmbH Bombardier Transportation AF Israel Israel Railways 42 2001 - 2002 1435 GmbH Bombardier Transportation AF Israel Israel Railways 6 2004 - 2004 1435 GmbH Siemens AG, Mobility AF Israel Israel Railways 8 2008 - 2009 1435 Division Siemens AG, Mobility AF Israel Israel Railways 31 2011 - 2011 1435 Division Bombardier Transportation AF Israel Israel Railways 78 2010 - 2011 1435 GmbH Bombardier Transportation AF Israel Israel Railways 72 2014 - 2015 1435 GmbH Bombardier Transportation AF Israel Israel Railways 72 2011 - 2013 1435 GmbH Société internationale de AF Ivory Coast 24 1970 - 1990 1000 transport africain par rail AF Jordan Hedjaz Jordan Railway 9 - 1050 AF Kenya Kenya Railways Corporation 175 1930 - 1950 1000 Société d'État Réseau AF Madagascar National des Chemins de Fer 29 - 1000 Malagasy Société d'État Réseau AF Madagascar National des Chemins de Fer 40 2008 - 2008 1000 CSR Corporation Limited Malagasy AF Malawi Malawi Railways Ltd 14 1980 - 1985 1067 Dakar-Bamako-Ferroviaire AF Mali 3 2007 - 2007 1000 Rail Coach Factory (Mali) Dakar-Bamako-Ferroviaire AF Mali 12 2007 - 2007 1000 Rail Coach Factory (Mali) Mauritanian National Rail- AF Mauritania 16 1980 - 1995 1435 ways AF Morocco Morocco Railways 71 1980 - 1985 1435 ALSTOM Transport SA AF Morocco Morocco Railways 305 1980 - 1985 1435 AF Morocco Morocco Railways 15 1980 - 1985 1435 ALSTOM Transport SA Mozambique Ports & Rail- AF Mozambique 170 1970 - 1990 1067 ways Mozambique Ports & Rail- AF Mozambique 60 1978 - 1979 1067 Astra Vagoane Calatori SA ways

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