Asia-Oceania Region to be a Favorable Market for Rolling Stocks in the Years to Come

Railways have become an indispensable part of the transport system and play a crucial role since all the industries are highly dependent on it for the transportation of a variety of goods, raw materials, and other basic commodities. Rolling stocks that mainly include locomotives, passenger coaches, and freight wagons are the most reliable and safest mode of transport as compared to other modes. Growing population and industrialization is calling for a high demand for rolling stocks in order to minimize the traffic congestion, especially in developing economies. Favorable government initiatives and increasing investments in rail infrastructure projects and their research & development across the world are expected to majorly drive the global market for rolling stocks.

Market overview

The global rolling stock market is projected to grow at a CAGR of 3.68% during the forecast period from 2016 to 2021, with the market value reaching USD 58.66 Billion by 2021 from USD 48.95 Billion in 2016.

Based on product type, the freight segment held the largest segment in 2016, and is also expected to witness the highest growth over the forecast period, owing to the government approvals and increased demand for dedicated freight corridors in Asia-Oceania and Rest of the World. The electric multiple unit segment is projected to witness the second-highest growth after the freight segment.

Among applications, the freight wagon segment accounted for the highest market share in 2016, owing to the increasing globalization and rapidly changing rolling stock manufacturing industry coupled with high demand for freight wagons in nations, such as the U.S., China, and Russia. Moreover, the increase in mining activities in emerging economies is anticipated to further boost the growth of the market for freight transportation, thereby propelling the growth of freight wagons and locomotives.

Which region is expected to lead in terms of market share and why?

Among regions, the market in Asia-Oceania region is expected to be the dominating market for rolling stock in 2016, with China being a key revenue generator among all the nations. The rising demand for passenger coaches and freight wagons for new and existing rail lines due to the growing urban population is primarily driving the growth of this market.

Europe, on the other hand, is projected to be the second-largest market for rolling stock in 2016 after Asia-Oceania. This growth can be contributed to the European Union that constitutes the largest market for rail products and services, in which the rolling stock takes up the majority of the share of this market.

What are the factors impacting the growth of this market?

The global rolling stock market is experiencing steady growth, mainly owing to the following factors:

  • Developments in infrastructure for urban and suburban rail networks
  • Growing demand for public transport to reduce traffic congestion
  • High demand for energy-efficient transport
  • Rising demand for comfort and safety in transportation
  • Approval of new rail line and upcoming high-speed rail projects

Apart from these, rising applications of Big Data in the rail industry and increasing industrial and mining activities are expected to further create an array of growth opportunities for this market.

However, the financial constraints in and rising number of refurbishment programs of rolling stock and its highly capital-intensive nature are the major factors that may restrain the growth of this market in the coming years. Moreover, high overhaul and maintenance costs remain major challenges to be tackled by the leading players operating in this market.

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Leading players and growth strategies implemented

The global market for rolling stocks includes manufacturers such as CSR Corporation Ltd. (China), Bombardier Inc. (Canada), and General Electric Company (U.S.) and research institutes such as the Japan Association of Rolling Stock Industries (JARI), International Railway Journal (IRJ), Union of Industries of Railway Equipment (UIRE), and Union of European Railway Industries (UNIFE). Among these, CSR Corporation Ltd. is the leading player in the rolling stock market, specializing in the R&D, design, manufacture, sale, refurbishment, and lease of transportation vehicles. These companies are actively adopting strategies like agreements, partnerships, contracts, and collaborations, expansions, new product launches, and mergers & acquisitions for gaining a stronger hold on the market as well as expand their global presence in the market. Among these, the strategy of agreements, partnerships, contracts, and collaborations was the key strategy adopted by the major companies in this market.

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