Industry, research and innovation

Society, environnement and industryIndustry, research and innovation

Summary: According to Unife, the European rail industry supplies almost half of the world’s demand for rail products and employs over 400,000 people in the EU. Research and innovation (R&I) is not only essential to overcome the industry’s competitive challenges, but also to ensure that the rail sector remains attractive to passengers and end-users and is able to increase its modal share in the face of increasingly innovative road and air modes. The European rail equipment supply industry invests around 3.6% of its annual turnover in R&D, and this includes a significant contribution from the small and medium-sized enterprise (SME) segment of the rail equipment supply industry.

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National standards
Although an international organisation – the UIC – was set up very early on to promote the passage of wagons from one border to another, its initial objective was clearly not Europe, at a time when geopolitics were very troubled by the bloody first half of the 20th century. The UIC did try to standardise what could be standardised, but this was limited to wagon gauges, track gauges and a few electrical and mechanical details, such as brakes, the height of buffers and the maximum length of passenger carriages. The automatic coupling system was not standardised for freight wagons, but it was for railcars! And the crème de la crème of railways, traction, remained locked up in strictly national spheres until current conversion within a locomotive, benefiting from the best technologies, could be used on both sides of borders, thanks to a few tricks that have become classics today.

Expanding the market: on the road to standardisation
It has often been said that the interests of the industry do not always coincide with the agendas of politicians, governments and the railway networks themselves. The rail industry – like all industries – demands consistency and cannot comply with the ‘stop and go’ imposed by government budgetary constraints. In line with the movement to open up national markets that began in the 1980s, the rail industry was quick to support the Single Market that was taking shape in the 1990s. The aim was to sell trains, trams and metros to everyone, not just at national level.

This option came at just the right time, because most of the national railways :
• operated trains using technology from the 1970s, which inevitably needed to be renewed;
• did not have the resources to carry out long-term rail research on their own;
• were trying to procure less labour-intensive equipment, particularly for maintenance.

Role reversal
At the same time, another movement was taking shape: the gradual standardisation of the world. This led to the application by governments of various technical standards, sometimes worldwide (ISO), which now also applied to the rail sector, which was required to comply with them and stop going it alone. Think of the electrical standards, for example, requiring that cables be purchased on the market and no longer made by specialist manufacturers. This is how the industry turned things around: from being a subcontractor, it became an equipment manufacturer, designing and producing locomotives and signalling systems itself, and offering a complete range of made-to-measure equipment and new track maintenance methods, for example. This came at just the right time: the railways had in the meantime been transformed for the most part into public limited companies, becoming more responsible, autonomous enterprises, with the role of purchaser and service provider. All they had to do was draw up invitations to tender, without having to describe the chemical composition of each bolt. With the roles reversed, the entire industrial sector underwent profound changes in the space of around twenty years. It went from a myriad of national companies to a few large European or global groups.

Today
This transformed landscape now presents us with a handful of major groups. The key word is the specialised platform: a single factory (or two) produces a single type of equipment, but made to measure. Each group produces one type of tram on a single platform, but can modify secondary parameters such as body width and interior fittings. The essentials – such as the powertrain and engine – are standardised, which reduces production costs and, above all, means that common components can be used. A tram from Berlin or Milan will therefore have identical components, but with customised parameters.

The small railway world is made up of the following major groups: 
• Integrators (supplying trains, trams and metros): Alstom, CAF, CRRC, Hitachi, Siemens, Skoda, Stadler, Talgo…
• Specialists (in one or other niche: wagons, railcars, railcars, service cars, etc.): Astra Rail Industries, Greenbrier, Kockums Industrier, Lohr Industries, Newag, Plasser & Theurer, Vossloh, Windhoff…
• Equipment manufacturers: Compin, Faiveley, Knorr-Bremse, Robel, SKF, Voith, Wabtec, WBN Waggonbau Niesky…

Recent merger
In 2014, Siemens bought signalling specialist Invensys for 2.2 billion. In the summer of 2016, China’s CSR and CNR merged to create CRRC, a behemoth that weighs as much as Bombardier, Alstom and Siemens combined. Japan’s Hitachi has completing its takeover of Italian signalling specialist Ansaldo STS and the manufacturer AnsaldoBreda, in a deal worth an estimated €1.9 billion. At the end of 2016, it was Wabtec Corporation that bought the equipment manufacturer Faiveley for around €1.7 billion. After the failure of the Siemens/Alstom merger, Alstom has buy Bombardier. 🟧


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