High-Speed and Intercity Transport Global Market Trends

SCISCI/VERKEHR Verkehr, Cologne Cologne 2016 2016

Between 2000 and 2002, growth slowed down considerably in the German economy.

HIGH-SPEED AND INTERCITY TRANSPORT GLOBAL MARKET TRENDS

Market Volume in OEM Business and After Sales Service as well as Prospects for Market Developments of Infrastructure, Rolling Stock, Products and Manufacturers

Extract from the study

HIGH-SPEED TRANSPORT AND INTERCITY TRANSPORT – GLOBAL MARKET TRENDS Market Volumes for OEM Business and After Sales Service as well as Prospects for Market Developments of Infrastructure, Rolling Stock, Products and Manufacturers This study entitled “High-speed and Intercity Transport – Global Market Trends” provides a comprehensive overview into the structure, installed bases, procurements, manufacturers, and development trends in the rail vehicle segment analysed. Based on current developments in rail transport, this study delivers an analysis and sound estimate of the market for High-speed and Intercity trains. Based on the successful preceding study from 2013 and experience 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. In addition, SCI Verkehr has performed an improved product segmentation for valua- tion of installed bases and age structures. In concrete terms, this market study “High-Speed and Intercity Transport – Global Mar- ket Trends” includes: – A regionally differentiated and country-specific look at the worldwide market for high- speed and intercity transport – A comprehensive analysis of the current fleet stocks concerning the speed segment, quantities and age structures as well as future procurement potential – An overview of the most important drivers behind the procurement and refurbishment – Analysis of market shares of manufacturers as well as a forecast of the vehicle demand – Overview of the manufacturers of high-speed trains and intercity multiple units including a brief description of the current range of products and services – Excursus on alternative high-speed concepts and implications on the high-speed market – A condensed presentation (diagrams) of important fleet-specific features by regions and countries – A list of all rolling stock fleets and the current procurements of high-speed trains and intercity multiple units in the annex to the study

All in all, the study provides a well-founded analysis of the worldwide market for high-speed trains and intercity multiple units. The study therefore provides both companies established in the railway industry as well as operators with important information 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 base and projects forms the basis for in-depth studies on the various segments of the railway industry and the most important regional focus markets. Within the scope of the continuous creation of the Multi Client Series, SCI Verkehr systematically analyses more than 100 core countries for railway technology. The study is available in English from August 2016.

Contact: Ann Kathrin Arntz Ahmed Yasin E-Mail: [email protected] [email protected] Phone: +49 (221) 93178-0 +49 (221) 93178-0 Fax: +49 (221) 93178-78 +49 (221) 93178-78

CONTENT

1 Executive Summary: The Worldwide Market for High-speed and Intercity Trains ...... 18

2 Market Definition and Methodology of the Study ...... 26 2.1 Objective of the Market Analysis ...... 26 2.2 Delimitation of the Railway Technology Market ...... 27 2.3 Market Analysis Methodology ...... 34

3 Manufacturers of High-Speed Trains ...... 39 3.1 Alstom ...... 39 3.2 Bombardier Transportation...... 41 3.3 Construcciones y Auxiliar de Ferrocarriles (CAF) ...... 43 3.4 China Railway Rolling Stock Corp Ltd (CRRC) ...... 46 3.5 Hitachi Rail Systems ...... 48 3.6 Hyundai Rotem ...... 50 3.7 Kawasaki Rolling Stock ...... 53 3.8 Kinki Sharyo ...... 54 3.9 Nippon Sharyo ...... 56 3.10 Patentes Talgo ...... 58 3.11 Siemens Mobility...... 60 3.12 Stadler Rail Group ...... 61

4 The Market for High-Speed Trains in Western Europe ...... 65 4.1 Total Market ...... 65 4.2 Germany ...... 71 4.3 France ...... 76 4.4 United Kingdom ...... 81 4.5 The Netherlands ...... 85 4.6 Belgium ...... 87 4.7 Spain ...... 89 4.8 Italy ...... 94 4.9 Austria ...... 99 4.10 Switzerland ...... 100 4.11 Portugal...... 102 4.12 Norway ...... 104 4.13 Sweden ...... 106

4.14 Denmark ...... 109 4.15 Finland ...... 110

5 The Market for High-Speed Trains in Eastern Europe ...... 112 5.1 Total Market ...... 112 5.2 Poland ...... 118 5.3 Turkey ...... 119 5.4 Czech Republic ...... 121 5.5 Slovenia ...... 122 5.6 Other markets ...... 123

6 The Market for High-Speed Trains in Asia ...... 126 6.1 Total Market ...... 126 6.2 Japan ...... 131 6.3 China ...... 135 6.4 South Korea ...... 145 6.5 Taiwan ...... 148 6.6 Indonesia ...... 149 6.7 Malaysia/Singapore ...... 150 6.8 India ...... 151 6.9 Thailand ...... 153 6.10 Vietnam ...... 155 6.11 Other markets ...... 156

7 The Market for High-Speed Trains in North America ...... 158 7.1 Total Market ...... 158 7.2 USA ...... 162 7.3 Canada ...... 166 7.4 Mexico ...... 168

8 The Market for High-Speed Trains in South and Central America ...... 169 8.1 Total Market ...... 169 8.2 Brazil ...... 171 8.3 Argentina ...... 172

9 The Market for High-Speed Trains in the CIS ...... 174 9.1 Total Market ...... 174 9.2 Russia ...... 178 9.3 Kazakhstan ...... 181

9.4 Uzbekistan ...... 181 9.5 Ukraine ...... 182 9.6 Other Markets ...... 183

10 The Market for High-Speed Trains in Africa/Middle East ...... 184 10.1 Total Market ...... 184 10.2 Morocco ...... 189 10.3 Saudi Arabia ...... 190 10.4 Qatar ...... 192 10.5 South Africa ...... 193 10.6 Iran ...... 194 10.7 Libya ...... 195 10.8 Egypt ...... 196 10.9 Other Markets ...... 197

11 The Market for High-Speed Trains in Australia/the Pacific Region ...... 199

12 Alternative High-Speed Train Systems ...... 201

ANNEX

Annex A: Fleet Structures ...... 205

1 Western Europe ...... 205

2 Eastern Europe ...... 212

3 Asia ...... 218

4 North America ...... 224

5 CIS ...... 226

6 Africa/Middle East ...... 230

Annex B: Stock of the Railway Operators ...... 234

Extract from the text, example region

Market Overview

Eastern Europe Trend

Units 2015 60

Average development 2015-2020 (p.a.) 14.3% 

base Installed Installed Average age 2015 (in years) 3

Average volume 2014-2016 (million EUR p.a.) 240

Average development 2015-2020 (p.a.) -8.7%  Market for Market

new vehicles new Volatility market volume 2015-2020 (SD) 25.7%

Average volume 2014-2016 (million EUR p.a.) 30

Average development 2015-2020 (p.a.) 23.9% 

Market for Market after sales after Volatility market volume 2015-2020 (SD) 28.9% Figure 1: Market overview high-speed  Boom/strong growth  small growth  stagnation  small decrease  clear decline trains in Eastern Europe

The market for high-speed transport in Eastern Europe is very heterogeneous and only par- tially of interest with regard to the high-speed train market. Most countries work on their con- ventional rail neetwork, the aim mostly being a combination of rail freight and regular passenger transport. Only few countries have a high-speed […]

[…]

Market Environment/Transport Market

The overall economic conditions in Eastern Europe and therefore the potential for high-speed transport vary considerably from country to country. […]

The strongly outdated railway infrastructure needs to be renewed and has meanwhile bene- fited from the partly regained economic development and the intensive funding by the Euro- pean Union. […]

All infrastructure projects in Eastern Europe under construction or planned concern a maximum speed between 200 km/h and 300 km/h. SCI Verkehr expects that the high-speed rail network in this region will increase from xxx km at the end of 2015 to around xxx km at the end of the decade. […]

Installed base and development of high-speed rail infrastructure [route-km] 3 000

2 500

2 000

1 500

1 000

500

Figure 2: 0 High-speed infrastructure until 1980 until 1990 until 2000 until 2005 until 2010 until 2015 until 2020 development in Eastern Europe by maximum 200 to 249 km/h 250 to 300 km/h above 300 km/h © SCI Verkehr GmbH speed by 2020

Installed base/age structure

There are currently xxx single-deck HSTs in operation in xxx countries in Eastern Europe.

Installed Base / Country [Number of Units]

Poland

Turkey

Czech Republic

Slovenia

Figure 3: Fleet overview high- 0 10 20 30 40 50 speed trains Eastern Europe 2015 by country IHST HST VHST (number of units) © SCI Verkehr GmbH

The largest part of the fleet was delivered in xxx. Accordingly, the average age sank to around xxx years. […]

Installed Base / Age Structure [Number of Units]

50 N IHST 40 HST

VHST 30

0 up to 1976- 1981- 1986- 1991- 1996- 2001- 2006- 2011- Figure 4: Age structure high-speed 1975 1980 1985 1990 1995 2000 2005 2010 2015 trains Eastern Europe 2015 © SCI Verkehr GmbH (number of units)

Manufacturers/Products/Market Shares

Around xxx high-speed trains have been delivered to Eastern Europe in the last five years […]. In the next few years, xxx will receive xxx additional eight-car units of type xxx from xxx. No additional orders are to be expected in xxx after the upgrade projects have been com- pleted […]

Delivery 2011-2015 / Market Shares [Number of Units]

Alstom

Stadler

49% 49% Siemens

Figure 5: In total: ~ 40 Units Market shares high-speed train manufacturers in Eastern Europe © SCI Verkehr GmbH in the period 2011 to 2015 (number of units

Up to now, the Eastern European high-speed rail market has been shaped by three products to be complemented by a fourth:

The Pendolinos in operation in the Czech Republic were produced by Alstom (formerly consortium CKD/Fiat/Siemens) in the seven-part series 680. Alstom also supplied the three-car units based on the Pendolino to the Slovenian state railway SZ. In addition, PKP received 20 seven-car Pendolino Poland (ETR 610) by 2015. […]

Market volume and market development

The current market volume for new vehicles is around EUR xxx million per year and for after- sales services around EUR xxx million per year.

Driver of further Brief description Relevance 5-year development trend

Investment funds The investment resources of most railways […] 

Infrastructure The upgrading of high-speed lines will lead to […] 

Generally stagnant demand in long-distance transport on the Demand for mobility one hand, large increase in demand for quick and attractive  connections between the cities on the other hand […]

Fleet structure […] 

Competition There are several private operators […] 

[…] the OEM market is expected to […]. In the end, Eastern Europe is a small market with singular projects in the high-speed segment. This of course also means that a single large order can boost the market significantly. This condition does not apply for after-sales services […]

Market Volume [EUR million]

450 i Marktvolumen Neufahrzeuge und After- 400

350

300

250

200

150

Figure 6: 100 Analysis and forecast of market volume for new 50 vehicles and after-sales service for high-speed 0 trains in Eastern Europe in 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 the period 2012 to 2021 (in New vehicles (OEM) After sales services EUR million) © SCI Verkehr GmbH

Extract from the text, example country markets

Infrastructure development/transport market

[…] However, the current eight stops will be extended by three more stations in the middle section of the line around Taichung City by late 2015 and a new end station at the edge of Taipeh (Nangang) with a new line section of less than 10 km by mid-2016. Because of sub- sidence, high investments of an estimated EUR xxx billion in the high-speed network were necessary to keep up operation.

High-speed rail infrastructure projects currently known

Route section Length [km] Current status Speed [km/h] Completition Kaohsiung - Taipei 345 Ready 300 2006 Taipei - Nangang 9.2 Ready 300 2016

Vehicle fleet, age structure and market shares

The original fleet of xxx 12-car high-speed trains of the xxx type was delivered by a Japanese consortium of Kawasaki Heavy Industries, Nippon Sharyo, Toshiba and Hitachi between 2004 and 2005. They are based on the Shinkansen series 700 and are somewhat faster with a maximum speed of 300 km/h. In 2012, another contract was awarded to the Japanese consortium as part of the first option from the existing contract for another four 12-car units. They are to meet the constantly increasing demand and the three new stations which were put into operation in 2015.

Important Current and Planned Procurement Projects

As part of the option pulled in 2012, THSRC has two further options. Following the clearance of the financial issues and a reduction in fares, a further (although smaller) fleet increase is possible.

Vehicle Units/cars Level Delivery Comment type per unit 700T 8/12 SD xxx Two options within the follow-up order from 2012.

Market volume and market development

The development of the Taiwanese high-speed train market will largely be limited to renewal and maintenance as no further lines are planned. Fleet renewal will not be necessary in the near future as the fleet is still very young. Smaller fleet extensions also as part of existing options are possible due to the increasing passenger figures.

Extract from the text, example manufacturers of high-speed trains

Kawasaki Rolling Stock

Overview

Head Office: 1-14-5, Kaigan, Minato-ku, Tokyo 105-8315, Japan Website: www.khi.co.jp Shareholders: Mizuho Financial Group, Inc. (3.54%), Nippon Life Insurance Co. (3.44%), JFE Hold- ings, Inc. (3.36%) Management: Makoto Ogawara (President of Rolling Stock Company) Employees (2013): ~4 500 Turnover (2015/2016): EUR 1.1 billion (JPY 148 billion) Profit (2015/2016): EUR 70 million (JPY 9.3 billion, operating income) Kawasaki Rolling Stock is the rolling stock division of Kawasaki Heavy Industries, Ltd. (KHI), which incorporates the operating units Kawasaki Rail Car Inc. based in Yonkers (New York, USA) for serving the North American market and Rolling Stock Company (headquartered in Hyogo-Ku). The company is positioned as a leading Japanese manufacturer and focuses on the production of metros, EMUs and high-speed trains. Kawasaki’s main sales regions are the domestic market of Japan, other Asian countries and North America. Major overseas orders outside Asia included new metro models for the Washington Metro- politan Area Transit Authority and New York City Transit. Kawasaki’s goal is to further strengthen its position in the US market and in high-speed rail projects in particular. Revenue has been fluctuating between JPY 120 and 190 billion over the last ten years. In 2015 Kawasaki Rolling Stock company reached a turnover of JPY 147 billion, approximately the same level as in 2013 and 2009 and a clear improvement compared to other years. The increase is reasoned to stem from relatively large metro orders from Singapore and Taiwan. From 2016 on, revenues could slightly decrease again in the short term. Profitability increased compared to the two previous years. Kawasaki has been able to increase profitability since 2012, recovering it to the same level as in 2010. Revenues from rolling stock have been around EUR 1 billion in the past years. Sites of final assembly

Kawasaki Rolling Stock has three production sites. The largest, Hyogo Works (Kobe, Japan), has existed since 1906 and supplies rolling stock across the whole world. From Hyogo Works, Kawasaki supplies rolling stock domestically and internationally. High-speed trains are manufactured at the main site in Kobe, Japan. Country Site Products Remarks HST, E-loco, D- Hyogo Employees: Approx. 3 200 loco, EMU, PC, Japan Works (Ko- metro, LRV, FW, Production capacity: 960 cars and 96 locomotives p.a. be) 2 engineering Area: 223 000 m Market shares Important products Market positioning / main contracts (2011–2015) 18% (AS) 14% (WW) As part of Japanese consortia, Kawasaki has participated Shinkansen (various) (both market in various Shinkansen HST series deliveries. It supplied, shares within for example, four series H5 trains to JR East in Japanese consor- partnership with Hitachi. tia)

ANNEX A: EXAMPLE

Taiwan

Installed Base / Types Delivery 2011-2015 / Types

Installed Base / Types [Number of Units] Delivery 2011 - 2015 / Types [Number of Units]

Shinkansen Shinkansen

In total: In total: ~ 35 Units ~ 5 Units

Installed Base / Age Structure [Number of Units] Delivery 2011 - 2015 / Market Shares [Number of Units]

50 N

30 Shinkansen

In total: 0 ~ 5 Units up to 1976- 1981- 1986- 1991- 1996- 2001- 2006- 2011- 1975 1980 1985 1990 1995 2000 2005 2010 2015 100% © SCI Verkehr GmbH © SCI Verkehr GmbH Installed Base / Top Speed Delivery 2011-2015 / Top Speed

Installed Base / Top Speed [Number of Units] Delivery 2011 - 2015 / Top Speed [Number of Units]

50 50 N N

40 40

30 30

20 20

10 10

0 0 190 - 249 km/h 250 - 300 km/h >300 km/h 190 - 249 km/h 250 - 300 km/h >300 km/h

ANNEX C: EXAMPLE

Units/ Top speed Power Country Operator Type Delivery* Main supplier Cars (in km/h) (in kW) Siemens / Bom- Germany DB AG ICE 1 | Serie: 401 4/13 1990 - 1993 280 9 600 bardier / Alstom Siemens / Bom- Germany DB AG ICE 1 | Serie: 401 13/14 1990 - 1993 280 9 600 bardier / Alstom Siemens / Bom- Germany DB AG ICE 1 | Serie: 401 42/14 1990 - 1993 280 9 600 bardier / Alstom Germany DB AG ICE-S | Serie: 410.1 1/3 1996 - 1996 Siemens / Adtranz 400 13 600 Siemens / Bom- Germany DB AG ICE 2 | Serie: 402 44/8 1996 - 1998 280 4 800 bardier Siemens / Bom- Germany DB AG ICE T | Serie: 415 11/5 1998 - 2000 230 3 000 bardier / Alstom Siemens / Bom- Germany DB AG ICE T | Serie: 411.1 31/7 1998 - 2000 230 4 000 bardier / Alstom Germany DB AG ICE TD | Serie: 605 19/4 1999 - 2000 Siemens 200 2 240 Siemens / Bom- Germany DB AG ICE 3 | Serie: 406.1 13/8 1999 - 2001 330 8 000 bardier Siemens / Bom- Germany DB AG ICE 3 | Serie: 403.1 37/8 1999 - 2001 330 8 000 bardier Siemens / Bom- Germany DB AG ICE 3 | Serie: 403.2 13/8 2004 - 2005 330 8 000 bardier Siemens / Bom- Germany DB AG ICE T | Serie: 411.2 17/7 2004 - 2005 230 4 000 bardier / Alstom Siemens / Bom- Germany DB AG ICE T | Serie: 411.2 8/7 2006 - 2007 230 4 000 bardier / Alstom ICE 3 MF | Serie: 407 Germany DB AG 16/8 2013 - 2015 Siemens 320 8 000 Mehrsystem (Velaro D) Germany DB AG IC x - preserial trains 2/8 2014 - 2015 Siemens 249 n.a ICE 3 MF | Serie: 407 Germany DB AG 1/8 2015 - 2015 Siemens 320 8 000 Mehrsystem (Velaro D) Germany DB AG IC x - Version K3s 85/12 2017 - 2021 Siemens 250 9 900 Germany DB AG IC x - Version K1n 45/7 2020 - 2022 Siemens 230 4 950 *Future delivery dates are based on manufacturer information or estimated by SCI Verkehr.

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