1. Rail Outlook Study 2013–2022
Paradigm Shift Towards Intermodal Mobility Boosts Growth in All
Rail Segments
M957-13
May 2013

2. 2M957-13
Sarwant Singh
Partner and Business Leader
Automotive & Transportation
+44 207 730 3343
Sarwant.singh@frost.com
Research Team
Strategic Review Committee Leader
Franck Leveque
Vice President
Automotive & Transportation - EMEA
+49 (0) 69 770 33 21
franck.leveque@frost.com
Research Director
Shyam Raman
Research Analyst
Automotive & Transportation
+91-44-66814173
shyam.raman@frost.com
Lead Analyst
Special Thanks
Vivek Balakrishnan
Executive, Quality Assurance
Hasmita Sandeep
Assistant Editor
Jaya Selvi A
Production Editor

3. 3M957-13
Contents
Section Slide Numbers
Executive Summary: Global Rail Market Overview and Key Highlights 4
Research Scope, Objectives, Background, and Methodology 21
Definitions and Segmentation 28
Rail Trends in North America 30
Rail Trends in Europe 41
Rail Trends in China 56
Rail Trends in Turkey 65
Rail Trends in Eastern Europe 73
Rail Trends in Latin America 80
Rail Trends in Africa 86
Conclusion 92
Appendix 95

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Executive Summary

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Note: Assumptions based on forecasted global economic growth and the Euro crisis.
Top 5 Predictions and Trends for 2013–30
Key Predictions
• The Chinese high-speed rail network will span 25,631 km by 2030. China will have a track length
of 120,000 km by 2020, more than Russia.
• Class I railroads In North America will spend over €8.70 billion towards modernisation per year
until 2022. Signalling, track materials, locomotives and rail cars are of the highest priority in
modernisation.
• Demand for improved efficiency in the rail industry will drive the market for advanced asset and
fleet management tools, including remote diagnostics (or prognostics), passenger information and
asset planning.
• China Southern Rail and China Northern Rail are to be among the top three global rolling stock
manufacturers and suppliers.
• Automated people movers (APM) and personal rapid transit system (PRT) are expected to show
strong growth as ‘feeder’ routes for higher-density lines in highly urbanised and densely populated
areas.
• Rail automation will help increase efficiency without compromising on safety. The radio-based
communication-based train control (CBTC) network in Western Europe is expected to grow at a
compound annual growth rate (CAGR) of 22.8 per cent over the next 10 years.
Source: Frost & Sullivan
RailIndustryGlobalVision:2013–30

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Key Trends
• In Europe: About 10,298 locomotives and 1,860 railcars are likely to be replaced between 2015
and 2022.
• Rail automation will provide customers with real-time information, and information transfer and
sharing between different related businesses for better travel and planning.
• In North America: While light rail and commuter rail are the fastest growing markets in terms of
project rollout, metro rails are the largest market for replacements.
• Train operators are starting to use Internet protocol architecture for onboard Internet access,
operation and safety services. This also provides an opportunity for new-generation multimedia
applications developed in IP environments to build a common base in the future.
• Africa is the highest-growth region in the rail supply market globally. The market size is set to
double by 2022, as a relatively stable political environment is inviting international participants to
invest in African rail infrastructure.
Note: Assumptions based on forecasted global economic growth and the Euro crisis.
Top 5 Predictions and Trends for 2013–30 (continued)
RailIndustryGlobalVision:2013–30
Source: Frost & Sullivan

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• China crossed a milestone in high-speed rail (HSR), with services from Beijing to Guangzhou. The rail
covers 2,230 km in 8 hours, at an average speed of 300 km/h.
• Brazil invests over 1.48 billion in monorail systems for São Paulo and Manaus.
• Italy is spearheading mainstream deployment of driverless metro solutions, with the completion of four
lines in Milan and Rome. The market is expected to experience high growth post-2021.
• US Class I railroads invested more than €1.17 billion towards achieving 100 per cent positive train
control.
• The UK and the US have the highest number of rolling stock with Wi-Fi services in Europe and
North America, respectively.
• Over 12 projects have been approved in the Middle East, with an expected investment of over
€38.51 billion.
Highlights of 2012
Source: Frost & Sullivan

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Global Rail Supply Market is Expected to Earn €155.19 Billion in 2013
Rolling stock and services are the chief contributors. Rail control is the fastest-growing, followed by services.
Rail Market: Expected Breakdown of Rail Supply, Global, 2013
• Rail controls are witnessing extensive investment, as they are considered the first step to running a
profitable railway line.
• Orders for rolling stock in Asia, the Middle East and Latin America are driving the market.
• The rail supply market is expected to grow at an annual growth rate of 3.8 per cent in 2013.
• The need for mobility is driving demand in mass transportation, passenger rail and freight applications.
• Global mainline freight and passenger levels have recovered from the 2009 recession levels. European
rail traffic is constrained due to the ongoing sovereign debt crisis.
Rolling Stock Infrastructure Services Rail Control
Integrated
Projects
Total
Expected Investements 51,535.1 31,811.1 57,836.0 13,241.2 766.2 155,189.6
0.0
20,000.0
40,000.0
60,000.0
80,000.0
100,000.0
120,000.0
140,000.0
160,000.0
180,000.0Cost(€Million)
2.3%
2.1%
2.9%
3.0%
2.6%
3.8%
Note: All figures are rounded. The base year is 2012. Source: Frost & Sullivan

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Rail in Africa, the Middle East and Latin America to Double in Size by 2023
Infrastructure spending, rolling stock orders and greenfield and brownfield projects are factors for strong
growth. Political instability in Africa and the Middle East, and credit limits in Latin America keep growth in
check.
7.1%
Latin America
2.7%
North America
8.0%
The Middle East and
Africa
2.1%
Western Europe
2.1%
Eastern Europe
1.8%
Asia-Pacific
2.1%
Commonwealth of
Independent States
Rail Market: Expected Regional Growth Rates in Rail Supply, Global, 2013
• The Middle East, Africa and Latin America (LATAM) drive the rail market.
• Eastern Europe shows great promise, but lack of funding continues to dampen demand, driving growth
rates below 2.5 per cent.
• India and Malaysia are expected to
be the next centres of infrastructure
expansion.
• Brazil’s target to
finish urban rail
projects for the
2014 World Cup
driver LATAM
growth.
Detroit’s P3 commuter rail has been
approved with an initial grant of €207
million.
• The growth rate in Asia-Pacific
(APAC) declined due to slowing
rolling stock orders in China
(previous orders completed).
• Nigeria’s rail industry has
over 7 on-going
infrastructure projects.
Note: All figures are rounded. The base year is 2012. Source: Frost & Sullivan

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5,000.0
0.0
5,000.0
10,000.0
15,000.0
20,000.0
25,000.0
0 50 100 150 200 250 300 350
Population(perkmtrack)
Area per km track (km2)
Comparison of Top 20 Countries with Largest Rail Network Size
China and India have low network density and high passenger compression on their networks, unlike
markets such as Germany, where the population and the land area are lower.
• China and India are considering increasing the
effective network length to lower the load on the
railways due to population (thereby reducing the
population per km of track).
• In Argentina, Australia, Brazil, Canada, Russia and
the US, as the population density is low, private
freight operators own and operate most of the rail
network.
Rail Market: Comparison of Top Countries by Rail Network Size, Global, 2013
Note: Bubble size denotes length of network in km. Future trend
Zone of effective rail length for population load
Note: All figures are rounded. The base year is 2012. Source: Frost & Sullivan

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-500,000
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
-200,000 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000
FreightTraffic(TKMMillion)
Passenger Traffic (PKM Million)
Most Large Networks are Poor Utilizers of Rail Infrastructure
With the exception of China and Ukraine, most countries perform poorly in either freight or passenger
transport.
100,000.0
50,000.0
0.0
50,000.0
100,000.0
150,000.0
200,000.0
250,000.0
300,000.0
350,000.0
400,000.0
(25,000) (5,000) 15,000 35,000 55,000 75,000 95,000
FreightTraffic(TKMMillion)
Passenger Traffic (PKM Million)
Note: Bubble size denotes length of network in km.
• Low freight utilization, high
passenger utilization: poor modal
share of rail in freight transport
• High freight utilization, low
passenger utilization: poor modal
share of rail in passenger transport • China and Ukraine have balanced
utilization levels in freight and
passenger rail
Rail Market: Comparison of Utilisation of Top 20 Rail Networks by Size, Global, 2013
Note: All figures are rounded. The base year is 2012. Source: Frost & Sullivan
Key: PKM - Passenger Kilometre

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CSR and CNR are among the Top 3 Rolling Stock Manufacturers
Strong rail programme within China has CSR and CNR as a well-equipped competitor in the global market.
CSR and CNR have started competing for infrastructure projects as well through consortiums.
0 1,000 2,000 3,000 4,000 5,000 6,000
CSR
Bombardier
CNR
Alstom
Siemens
Transmashholding
CAF
Hyundai Rotem
Kawasaki
GE Transportation
Annual Revenue (€ Million)
RollingStockManufacturers
• CSR and CNR are expected to decline in size by 2016 as
Chinese orders are fulfilled.
• China is funding projects in developing markets, which
increases conversion rates for rolling stock bids and also allows
for earning potential throughout the product’s life cycle.
• Hyundai Rotem is strategically positioned in Turkey to compete
in Europe, Asia, North Africa and the Middle East.
Rail Market: Top 10 Rolling Stock Manufacturers, Global, 2012
Note: All figures are rounded. The base year is 2012. Source: Frost & Sullivan

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228
247
32
15
60
2022
14.0
13.7
9.5
6.6
7.5
15.6
93.6
13.0
1.7
52.5
198.3
11.6
28.2
8.6
5.3
7.1 0.9
18.8
12.0
3.0
18.8
41.3
Europe Asia-Pacific The Middle East
and Africa
Latin America North America
Europe and Asia Show Strongest Investments in HSR
China to invest €198.30 billion to extend the HSR network to 16,000km by 2020. Globally over €581.60
billion spending by 2022.
Turkey
Sweden
Spain
Russia
Poland
Italy
Germany
France
Portugal
Switzerland
2.0
54.0
36.9
2012
Saudi Arabia
Morocco
GCC
Brazil
Argentina
Mexico
US
Rail Market: Cumulative Investments on High-Speed Rail Infrastructure by Country,
Global, 2012–2022
€581.60 Billion
€92.9 Billion
Europe
Asia-
Pacific
Middle
East &
Africa
Latin
America
North
America
Europe
Asia-
Pacific
A
B
C
D
E
A. Projects in Poland and Portugal have been
cancelled due to the Euro-zone crisis. The
Portuguese project had legal disputes as well.
B. Indian railways have approved 7 HSR
corridors.
C. The GCC project will link several member
states by 2017.
D. Argentina’s HSR project has been put on hold
due to a crisis in funding.
E. The California High-Speed Rail is considered
the only surviving project left in the US.
Africa Morocco
China
India
Japan
South
Korea
Note: All figures are rounded. The base year is 2012. Source: Frost & Sullivan

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9,824
7,361
362
200
5,395
3,694
480
3,982
9,603
511
900
Africa APAC EU LATAM NA
Operational Length Under Construction Planned
High-Speed Rail to Connect Continents in Future
By 2025, the first steps to connect Asia and Europe by HSR services are expected to commence. A
tremendous modal shift is also likely from highways to rail.
2012 2022
Rail Market: Length of High-Speed Rail Infrastructure by Country, Global, 2012–2022
Total 42,312 km
Total 74,896 km
Global HSR Network Length
CAGR 4.5%
• Spain, France and Turkey
are expected to have the
largest HSR networks in
Europe by 2025.
• Although India has the
potential to be the second-
largest HSR network in
Asia after China, the rate
of HSR adoption in India is
still uncertain due to
concerns in project
management and funding.
17,547
9,289
15,476
42,312
15,858
16,726
Source: UIC, Frost & Sullivan

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Europe and North America Highest Spenders in Urban Rail
Latin American and Asian markets are expected to reach maturity post-2025. Africa is expected to be the
highest-growth region in the world for urban rail post-2025.
362.6 171.9 504.7
3,089.5
465.0
1,480.0
2,234.0
867.6
207.2
917.0
286.3
542.4
243.0
0.0
1,000.0
2,000.0
3,000.0
4,000.0
5,000.0
6,000.0
Africa Asia-Pacific Latin America North America Europe
Investment(€Million)
Light Rail Metro Commuter Rail Monorail
• Lima Metro is expected to award the contract for line 2 towards the end of 2013.
• At a total cost of €2.30 billion, the Lima Metro is expected to have Bombardiers CityFlo automation.
• The main impact of an investment of this scale would be the increased dependence on passenger rail,
which could translate to future intercity projects.
• The monorail is experiencing a resurgence in adoption, with orders over €1,071 million expected in
2013.
• The monorail competitive scenario is expected to change significantly, with more participants entering
the market.
• Light rail is the most popular rapid transit choice in Africa. However, future lines and expansion are
expected with the monorail.
Rail Market: Expected Financial Commitments in Urban and Commuter Rail, Global, 2013
Note: All figures are rounded. The base year is 2012. Source: Frost & Sullivan

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The Future of Mobility is Multi-Modal Commuting, Combining
Door-to-Door Solutions Using Dedicated Mobility Platforms
• Door-to-door integrated multi-mobility is likely to become a reality.
• Vehicle manufacturers plan to offer smart mobility solutions, ensuring first and last mile connectivity.
• The government plans to club public transport with bike / two wheeler/car rental schemes.
• The market will probably encounter new participants termed Mobility Integrators.
City
Suburbs
Intercity
TravelDistance
Travel DistanceDestination
Public
Transportation
Private Cars
Shared Mobility
Micro-mobility
Intercity Bus
Intercity
Train
ty
Shared Mobility
CAR
OWNERSHIP
Rail Market: Future of Multi-Modal Passenger Transport, Global, 2022
Source: Frost & Sullivan

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Schematic of a Multi-Modal Electronic Travel Card NS: Case NS Card
The electronic ticketing server is synchronised in real time with central control systems of various transport
modes to provide the most updated, accurate information to passengers.
Level 0
NS-Business Card
Level 1
Equipment on
Passenger Level
Level 2
Local Systems
Level 3
Central System of
the Public Transport
Company
Level 4
Central Processing System
• The OV-chip card is the basis of the
NS-Business Card and has a unique
code.
• RFID Card Readers are used to
read the NS-Business Card.
• Information on ‘Check-in’ and
‘Check-out’ timestamps transferred.
• Check-in and check-out information
from Level 1 equipment is stored in
local systems in stations, garages
and depots.
• Respective transport company
receives information from Level 2
Systems.
• Billing for each card based on
usage is calculated by respective
transport companies.
• Payment details for each
commuter are collated from
different public transport
companies to generate a single bill
for each customer.
• Unique code offers the possibility
of personalised bills (person-
oriented analysis).
• Information sent to the respective
companies and employees for
payment.
Source: Frost & Sullivan

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DB Bahn Touch and Travel System Technology Solution
VDV Kernapplikation‘ (KA) is the German eTicketing standard embedded on an NFC SIM card. The existing mobile
operator’s infrastructure is used to transmit data and is the key piece in the technology puzzle.
Sources: NFC Forum, DB Bahn, NXP and Frost & Sullivan
“eTicketing will become iTicketing. Traditional methods of fare collection are expected to become
obsolete by 2030. Ticketing systems in transport systems will become “Aware” of the passenger, and
collect charges without the physical action of paying the fare.” – OEM

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Transition Shift in ICT Strategies On-board Trains
Faster time-to-market solutions can be realised if rail operators also have the knowledge of IT systems, as
rail operators traditionally deal with mechanical issues. They buy IT solutions but do not manage them.
Complex IT Architecture Separate & Standardise
Link System
Audio
Telephony
Security Systems
Audio
Video
TelephonySecurity Systemsy y pppSystemsyyy
AudioRemote
Monitoring Video
Remote
Monitoring
A modular approach is used
Can incorporate new solutions with ease
Single point-based solutions are deployed
Difficulty in integrating new solutions
Shift of Information Technology Platforms in Trains
A d l h i d
Shift to 80% configuration & 20% customisation
Single point-based solutions are deployed
80% customisation & 20% configuration approach
Source: Frost & Sullivan

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IT has been Integrated Heavily in Every Aspect of Rolling Stock
The data communication system (DCS) provides synchronisation of varied information at high bandwidth and
low latency for high throughput. The DCS does not perform control functions.
Wayside data
communication network
Wayside radio
Platform doors
interface unit
Zone
controller
Train doors
Platform doors
Zone controller + internal
interlocking
Operations control centre
Cab HMI
Transponder
On-board passenger
information
Spot transmission
antenna
Train-borne
controller
Database storage unit
Maintenance
management unit
Form fit functional interface specification
Functional interface specification
External
interlocking
Wayside Passenger
Information
Wireless link
Human machine interface
System
Data Communication Subsystem
Spot Transmission Subsystem
Mobile radio
Sources: MODURBAN, Frost & Sullivan
Schematic Layout of the MODURBAN Communication System in Europe