Mar 01, 2019

Benefits of Lightweight Vehicles on Low-density Routes Speed Up Demand for Low Rail Vehicles

by Team Fact.MR

With the increasing trend of urbanization, developments in the mobility sector have gained momentum in the past few years. Burgeoning mobility trends in developing as well as developed countries are creating needs for energy-efficient and economic transportation solutions. In contrary to heavy rail systems, low rail vehicles offer low-cost, more reliable, and environmentally friendly mode of transportation in urban areas. Recent developments in the transportation sector has caused an upsurge in the production of rail vehicles, which is expected to complement growth of the light rail vehicles market.

Autonomous light rail vehicles are likely to shape the future of the light rail vehicle market, as most manufacturers in the market are adopting advanced technologies to develop automatic light rail vehicles. Furthermore, introducing advanced driver assistant systems for light rail vehicles is likely to become a popular trend in the market in the upcoming years. Positive growth environment for autonomous light rail vehicles in the urban public transportation sector is bolstering the trend of introducing autonomous light rail vehicles is likely to gain popularity in the upcoming years.

However, the benefits of light rail vehicles are limited to low-density routes and the use of light rail vehicles for longer routes costs higher. This is one of the biggest challenges faced by market players in the light rail vehicle market. Furthermore, introduction to autonomous buses in the public transport sector in urban areas is creating a bigger competition for autonomous light rail vehicles, which may impact the market growth negatively in the coming future.

Rolling Stocks Witness High Demand Being a Highly Sustainable Mode of Transportation

A majority of governmental organizations across the world are aiming to develop a low-carbon railway transportation network by eliminating rail vehicles that run on traditional fuel from the mobility infrastructure. Increasing efforts towards reducing the environmental impact of public transport are driving policymakers to couple environmentally friendly modes of transportation with infrastructural developments. Thereby, such pro-environment policies are driving demand for rolling stocks across the world.

Governmental policies developed by the European Commission to promote de-carbonization of the transportation sector are enabling the government to take a step towards its goals to reduce greenhouse gas emissions. Recently, to be in-line with the initiative led by the government for removal of diesel trains from Britain’s railway by 2040, the Rail Safety and Standards Board (RSSB) – a British independent not-for-profit company – announced funding competitions, which is likely to augur well for growth of the rolling stock market in Europe.

Thereby, with leading countries taking substantial steps in adopting electric rail systems instead of traditional, diesel-based rail systems, the adoption of rolling stock is likely to witness a significant rise in the upcoming years.

Nearly Half the Rolling Stocks Sold Worldwide Find Applications in Freight Transportation Sector

The total volume share of the rolling stock market is equally divided into passenger transportation and freight transportation, which creates equally lucrative opportunities for market players in both the applications sectors. In 2018, nearly five in ten rolling stock sold across the world were used in freight transportation applications. With a majority of national governments adopting railway transportation as a mode of freight transportation, the applications of rolling stocks are likely to expand in the freight transportation sector.

Larger tender procurements by manufacturers is one of the important highlights of the global rail market, which signifies the burgeoning supply of new and efficient goods wagons. For example, Russia’s RM Rail entered an agreement with Machine Sazi Arak (MSA) – a large Iranian manufacturing company – for the supply of around 1000 freight wagons in June 2018. In January 2018, a US$ 260 million tender was passed by Ukrainian Railways for purchase of freight wagons and gondola wagons. In addition, a tender for 22,000 freight wagons was set out by Indian Railways in June 2018.

However, demand for rolling stocks in the passenger transportation applications is likely to increase rapidly in the upcoming years, surpassing rolling stock sales in the freight transportation sector.

Fact.MR recently published a report that tracks developments in the rolling stocks market through the period 2018-2027. According to the report, the rolling stocks market is envisaged to grow at a healthy 3.3% volume CAGR through 2027.