RAIL COMPONENTS MARKET ANALYSIS

The global rail components market size was valued at USD 83.6 million in 2022 and is anticipated to witness a compound annual growth rate (CAGR) of 4.55% from 2023 to 2030.  The growth of the market is due to the increasing population, rising investment in infrastructure, and increased use of trains as a mode of transport. The major driver of the rail components market is the increasing demand for railways as a means of transportation, especially in Asia Pacific. Moreover, the growing use of trains as a form of transportation in North America is projected to boost the global rail components market.

Global Rail Components Market: Regional Insights

North America is expected to gain a major share in the global rail components market during the forecast period. This can be due to increasing rate of transportation in the countries across the region. For instance, according to Coherent Market Insights, in 2017, nearly 10 billion trips on public transportation by people in the U.S. were registered, out of which five billion trips were on vanpool, demand response service, and bus; 78 million trips were on passenger ferry, while 4.9 billion trips were on rail transit. Thus, the region is likely to witness strong growth in the global rail components market over the forecast period.

Moreover, Asia Pacific is also expected to show robust growth in the global rail components market during the forecast period owing to presence of largest market for rail components in countries such as China, in the region. The country has leading manufacturer such as CRRC of rolling stocks and other rail components. Moreover, the railway system of China plays a crucial role in the economic development of the country, as it has large geographic area, mixed terrain, and weather conditions that make the railway network most reliable transportation medium for passengers and goods. Furthermore, the increasing ridership in India is also driving growth of the market across the region. The country is witnessing new metro projects, and extension of existing lines. Thus, such developments in the region are expected to support growth of the global rail components market over the forecast future.

Figure 1: Global Rail Components Market Share (%), By Region, 2022

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Global Rail Components Market Drivers:

Rising demand for rapid transit to boost the market growth

Rapid transit is also called as metro, heavy rail, tube, subway, u-bahn, or underground transit. This is a high-capacity public transport found generally in urban regions. Rapid transit systems can be electric railways operating on an exclusive right-of-way. This cannot be accessed by pedestrians or any other vehicles. It is often grade separated in tunnels or on elevated railways. Modern services on these rapid transit systems come with designated lines between stations, and they typically use electric multiple units on railway tracks. With increasing urbanization, the demand for rapid transit is growing around the world, which is expected to fuel growth of the global rail component market during the forecast period.

Rise in use of Internet of Things (IoT) in railways is to augment the market growth

Deployment of IoT in railways enhances safety and reliability of the train infrastructure. The IoT sensors generate data which further allows to analyze and interpret conditions that may not be done earlier. The use of IoT technology can help use a lot of data for optimizing train schedules and maintain equipment, which are two major challenges for railway efficiency. Internet of Things can also help streamline railway operations when it is combined with analytics for better efficiency. Thus, due to such benefits of deployment of IoT in railways, its demand is increasing. This in turn is expected to drive growth of the global rail components market during the forecast period.

Global Rail Components Market Opportunities:

Increasing focus toward domestic production in emerging nations is expected to create growth opportunities in the global rail components market during the forecast period. The rail industry is one of the major components in any industrial economy due to which, the logistics chain is important for an economy. In most of the emerging nations, rail components are imported from locomotive production site of manufacturer, due to which the cost of components increases. Thus, several emerging countries such as Brazil, South Africa, and India have begun domestic productions for these components. This in turn is expected to offer several lucrative opportunities in the global rail components market during the forecast period.

Emergence of autonomous train is expected to create multiple opportunities in the global rail components market over the forecast period. Autonomous and semi-autonomous technologies are increasingly evolving with major technological developments. Autonomous train drive without human driver, and require minimum to no human assistance. The entire transportation industry is witnessing a growing development of driverless vehicles. The adoption of autonomous trains on large scale is likely to take a long time, however, many railway operators will adopt semi-autonomous trains in the coming future. Thus, this in turn is expected to offer several growth opportunities in the market.

Global Rail Components Market Trends:

Bogie segment is gaining traction in the market

The bogie segment among component types is likely to gain a major share in the market over the forecast period, due to rise in adoption of powered bogie designs all over the world. Therefore, several locomotives, multiple units, such as high-speed trains, and mass transit vehicles such as metro cars, suburban trains, tramways, and light rail vehicles come with powered bogies. Rail bogies are increasing witnessing R&D in recent times. Many companies are involved in development of efficient and safe bogie designs for locomotives with embedding digital devices that work on the IoT principle. Thus, increasing growth of this segment is likely to drive growth of the market in the coming future.

Growing initiatives by governments for rail industry is a growing trend

Governments of countries around the world are taking initiatives for advancements in rail industry. Several governments are also increasingly investing on railway infrastructure of the country. In India, the flagship of government such as ‘Make in India’ initiative is encouraging several multinational organizations to invest as well as manufacture in India. Due to this, the rate of business collaboration is increasing among global and domestic players in the country. Moreover, the government of India is also focused on investment in railway infrastructure through investor-friendly policies. Thus, thus such initiatives are expected to support growth of the global rail components market during the forecast period.

Global Rail Components Market Restraints:

Increasing demand for other modes of transportation to hinder the market pace

The demand for other modes of transportation is increasing such as bus rapid transit (BRT). This system is a bus-based public transport system that is designated for improving capacity and reliability, as compared to traditional bus system. This system includes roadways dedicated for buses. It prioritizes buses at intersections, where they can interact with other traffic. A BRT system also offers advanced design features for reducing delays that occur due to passengers boarding or purchasing fares, or leaving buses. Thus, demand for such other transportation modes is increasing, which is likely to hinder growth of the global rail components market during the forecast period.

Lack of technology infrastructure to hamper the market pace

The developing nations have poorly developed telecommunication infrastructure and restricted availability of access to smart devices, which in turn creates barriers in the connected rail market. Moreover, the high cost of internet access is also a barrier in adoption smart railways. These factors are expected to hinder growth of the global rail components market during the forecast period. Several organizations in these countries are focusing on adoption of IoT technologies to pursue ambient computing technology, and offer different IoT solutions, standardization in data standards, wireless protocols. This is becoming more divergent for reducing costs and complexities technologies.

Figure 2: Global Rail Components Market Share (%), By Component, 2022

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Global Rail Components Market Segmentation:

The global rail components market report is segmented into Component.

Based on Component, the market is segmented into Bogie, Engine, and Other Components. Out of which, Bogie is expected to dominate the global market over the forecast period and this is attributed to the growing demand for bogie component in railways around the world. Bogie is a structure underneath the body of a railway vehicle. The axles and wheels are connected to the bogie through bearings.  In recent years, the adoption of powered bogie design has increased around the world, due to which the segment is expected to witness strong growth in the near future.

Engine segment is also expected to witness significant growth in the near future and this is owing to the growing demand from new orders compared to couplers and bogie, as their demand is generated from replacement market as well.

Global Rail Components Market: Key Developments

In January 2019, CRRC Corporation Ltd, announced that it has received an order for development and production of 22 trains having sand and wind resistant designs for an urban rail transit system in Egypt. As per the corporation, the train will have 132 train cars for the rail transit system.

In March 2019, CRRC Corporation Ltd. secured a wagon deal from Switzerland in which, the company will produce 50 container flat wagons for HUPAC, an international logistics company in Switzerland.

Global Rail Components Market: Key Companies Insights

The global rail components market is highly competitive. This is attributed to continuous launch of new technologies due to ongoing R &D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on regional as well as global basis.

Some of the key players in the global rail components market are Kawasaki Heavy Industries Ltd, CRRC Corporation Limited, Nippon Sharyo Ltd., Siemens AG, Progress Rail (Caterpillar Company), Bombardier Inc., Hitachi Ltd., Alstom SA, Escorts Group, Wabtec Corp. (previously GE Transportation), Construcciones Y Auxiliar De Ferrocarriles sa, Hyundai Rotem, Trinity Industries Inc., Stadler Rail AG, and The Greenbrier Companies.

*Definition: Rail Components are a collection of parts that work together to create a structure for trains to travel on safely. These components include rails, railway ties (also called sleepers), fasteners, ballast, subgrade, and switch.