Upward traction: Large contracts have allowed the industry to record impressive recent growth

The industry relies heavily on long-term rolling stock replacement contracts. These contracts have long lead times and involve periodic payments throughout the manufacturing process, followed by a balloon payment when the project reaches completion. This creates revenue and profit volatility. Over the five years through 2018-19, industry revenue is expected to increase at a compound annual rate of 6.5% to reach £2.3 billion. The industry’s performance is heavily dependent on the performance of Bombardier and Hitachi, as in 2018-19, these two firms are estimated to account for 66.3% of industry revenue between them...read more.

Industry Statistics & Market Size
Annual Growth 14-19
Forecast Growth 19-24

Industry Threats & Opportunities

  • Revenue is inherently volatile, but big contracts have supported strong growth in recent years
  • Contracts for new stock or signals tend to come in bursts, which has limited industry performance
  • Competition for contracts from foreign firms, such as CAF, is expected to limit expansion, despite the weakness of the pound
  • Industry Report - Industry Investment Chapter

    The level of capital intensity is determined by comparing the human and capital equipment factors of production, using wages and depreciation costs as proxies. Comparatively high depreciation costs indicate substantial investment in depreciable assets such as buildings and equipment, resulting in high capital intensity. Conversely, comparatively high wage costs indicate high labour intensity.The Railway Equipment Manufacturing industry displays a high level of capital intensity, with approximately £2.71 spent on wages for every £1.00 spent on capital. Manufacturing is capital intensive as it has high capital costs because of the requisite machinery and factories. However, the level of capital intensity varies considerably between operations. For...purchase to read more.

    Additional Insights for the Railway Equipment Manufacturing Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Railway Equipment Manufacturing Industry are

  • Undertaking technical research and development
  • Economies of scale
  • Access to multiskilled and flexible workforce
  • IBISWorld analysts also discuss how external factors such as Demand from railway and underground railway construction and Passenger rail journeys in the Railway Equipment Manufacturing industry impact industry performance..

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    What's in this report

    What is the Railway Equipment Manufacturing Industry?

    Companies in this industry manufacture rail locomotives, carriages, train parts (such as wheels) and signalling equipment. Repair and maintenance of trains, train parts and tracks are not included in the industry.

    Industry Products
  • Locomotives
  • Train parts
  • Signalling equipment
  • Self-propelled carriages
  • Carriages and goods wagons
  • Industry Activities
  • Electric and diesel rail locomotive
  • Self-propelled railway coach
  • Service vehicle
  • Locomotive part
  • Signalling equipment
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Demand from railway and underground railway construction
  • Passenger rail journeys
  • Demand from freight rail transport
  • World price of steel
  • Real effective exchange rate

  • Current Performance
  • Order books grow
  • Convoluted operations
  • Margins improve
  • Chart: Revenue Growth

  • Industry Outlook
  • Contracts aid expansion
  • Potential influences
  • Table: Railway Equipment Manufacturing Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Railway Equipment Manufacturing Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Intercity Passenger Rail Transport
  • Freight Rail Transport
  • Urban Passenger Rail Operations
  • Bus & Tramway Operations

  • Key Selling Industries
  • Electric Motor, Generator & Transformer Manufacturing
  • Fastener & Screw Machine Product Manufacturing
  • Iron & Steel Manufacturing

  • Products & Services
  • Self-propelled carriages
  • Signalling equipment
  • Train parts
  • Carriages and goods wagons
  • Locomotives
  • Other
  • Chart: Railway Equipment Manufacturing Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Interurban passenger rail operators
  • Urban passenger rail operators
  • Freight rail operators
  • Chart: Major Market Segmentation for the Railway Equipment Manufacturing Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Railway Equipment Manufacturing

  • Basis of Competition
    Internal competitionExternal competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Railway Equipment Manufacturing Industry

  • Industry Globalization
    Hitachi Rail Europe Ltd, Bombardier Transportation UK Ltd, Siemens Alstom,
  • Table: Hitachi Rail Europe Ltd - financial performance
  • Table: Bombardier Transportation UK Ltd - financial performance
  • Table: Siemens Alstom - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Railway Equipment Manufacturing Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Railway Equipment Manufacturing Industry
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Exports (2010-2024)
  • Imports (2010-2024)
  • Wages (2010-2024)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
  • The chassis part of a locomotive to which wheels are attached.
  • Rolling Stock Operating Company (Rosco)
  • A company that owns and maintains railway engines and carriages that are leased to TOCs.
  • Train Operating Company (Toc)
  • A company that operates passenger franchises, where the government has licensed the company to provide services on a route.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Railway Equipment Manufacturing market research report is a comprehensive guide to market size and growth prospects. Our industry reports offer strategic industry analysis of the factors influencing companies, including new product developments, economic, lifestyle and demographic influences, distribution and supply chain factors and pricing issues. Full analysis accompanies our data forecasts to illustrate how the market responds to emerging industry trends.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Railway Equipment Manufacturing:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Railway Equipment Manufacturing market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Railway Equipment Manufacturing, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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