According to the consulting firm SCI Verkehr, worldwide operations and capital budgets for passenger and freight rail were a combined $590 billion in 2008. Another study by Roland Berger consultants finds that the global market for rail goods and related services (not including operations) was $169 billion in 2007, up from $129 billion in 2006. But how do these numbers break down regionally and nationally, and what does this portend for the future?
The United States—and more broadly, the Americas—retains a big market share in freight rail but lags far behind in passenger rail compared to many countries, especially in Europe and Asia. In 2002, North and South America together accounted for 31 percent of the world’s diesel locomotives and a third of the world’s freight wagons, but for only 1.5 percent of the world’s passenger rail cars and less than 1 percent of electric locomotives.
For transit rail cars, the United States accounts for about 5 percent of the global fleet and for a correspondingly small portion of global demand for new cars. Canada and Mexico add another 2 percent, bringing the North American total to 7 percent. By comparison, Japan is home to 11 percent of the global fleet, and Europe 35 percent. Annual U.S. orders for transit cars are erratic, swinging from a range of some 200–400 cars in most years to isolated peak years of about 1,200 in the early 1980s and early 2000s.
This is where change is critical: It is not enough to have one or two years with large orders for rail vehicles. What is needed is a sustained investment program in the United States. Only then will a rail manufacturing industry re-emerge.
The vast majority of the world rail market is infrastructure-related. Rail vehicles account for close to a third of the market volume. Western Europe currently dominates the market, followed by Asia and the Pacific, although other regions lead in specific industry segments, such as services. (See Table 1.) About two-thirds of the market volume is considered “accessible,” meaning that orders are open to bids from international suppliers.