Rail Components Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)
The Rail Components Market was valued at USD 78 billion in 2020 and is expected to reach USD 95 billion by 2026 registering a CAGR of more than 3% during the forecast period (2021 - 2026).
The Outbreak of the Coronavirus disease (COVID-19) acted as a massive restraint on the rail components market in 2020 as supply chains were disrupted due to trade restrictions and consumption declined due to lockdowns imposed by governments globally.
However, market is expected to regain its growth post lockdown as governments are going to introduce many new projects to maintain social distancing as people will be more concerned about the safety & security as well as clean air in the bogies in wake of pandemic. These measures likely to boost production of new bogies and necessary rail components during the forecast period.
Increase in developments of Metro projects and expansion of electrified network rail route will further create opportunities for OEMs to expand their revenue stream and increase geographical presence. Moreover, Factors such as increase investment in rail infrastructure and expansion of rail network in densely populated regions would enable growth of rail components market.
Asia-Pacific region expected to witness significant growth during the forecast period owing to the high demand of rail transportation from countries like China, Japan, South Korea and India. Meanwhile in European and North American region market is anticipated to grow due to rising demand for passenger and freight transportation.
Bogie Segment To Witness Fastest Growth During Forecast Period
The bogie segment in rail components market is expected to hold largest market share during the forecast period owing to growing adoption of powered bogie design across the world. Thus, many locomotives, multiple units, such as high-speed trains, as well as mass transit vehicles (such as suburban trains, metro cars, light rail vehicles and tramways), are equipped with powered bogies.
Rail bogies have had seen investment in research and development in recent years. Companies have been focusing on creating safe and efficient bogie designs for locomotives with embedding digital devices which work on the principle of the Internet of Things (IoT).
The Global Railway Engineering Pty Limited showcased its Scheffel Self Steering innovation in the Rail Tech Innovation Awards. It is a three-part self-steering bogie that is suitable for all rail systems which work with a three-part bogie. According to the manufacturer, their innovation offers fuel saving and there are fewer chances of derailment in the component.
OEM like Siemens have introduced innovations in their products like elastic wheel fitting on their lxege LRV bogies which are developed to improve the squealing noise performance by up to 90 percent. Also, the company has been developing variable height bogie which can operate on 1000mm and 1435 mm tracks.
Companies like Alstom and Magma Structures have formed consortiums with institutes like the University of Birmingham to work on various projects concerning Train Bogies. One of the projects is CaFiBo - Carbon Fibre Bogie Project. The project aim is to reduce the mass of the bogie and reduce track damage and vehicle maintenance costs by employing a lightweight composite bogie frame. Such innovations through collaborations are creating opportunities for more improvements in the global bogie rail component segment.
Asia-Pacific Region Likely To Dominate The Market
Asia-Pacific region is expected to witness the fastest growth rate during the forecast period. In the Asia-Pacific region, India is one of the largest and fastest growing market for railway components after China. India is making investments in rolling stock to upgrade its rail transportation system. Owing to the growth in population, intercity trade and commuting, upcoming metro projects (13 operational, 6 under construction, 7 in planning stage and 8 in proposed stage) and extension of existing lines, the Indian rolling stock market is witnessing a steady growth.
The government's Make in India initiative laid special emphasis on promoting manufacturing activities within the country. This, in turn, is expected to drive the market for rail components in India. China is one of the key contributors in development of regional growth in rail component market due to large scale rapid urban transit development. Chinese major market player CRRC is the leading manufacturer of rolling stocks and related rail components, occupying 39% of the market share.
For instance, In January 2020, CRRC received an overseas supply contract worth USD 55.5 from Portugal to supply 18 new light rails with a maintenance period of five years. Japan is the technology leader in the rolling stock market which is majorly used for passenger transportation. The country is continuously investing in the development of innovative technologies in rolling stock.
The Rail Components market is a consolidated one due to presence of major players in the market such as Siemens AG, Bombardier Inc, CRRC Corporation limited, Alstom, Hitachi and many more. The market has witnessed various growth strategies such as acquisitions, mergers, and collaboration which are being adopted by market players over the past few years. Major players in the market are focusing on expanding their product portfolio to augment their revenue share. For instance,