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21-23 March 2017   |  Lille Grand Palais Exhibition Centre, Lille, France

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The major challenges within a strong and strategic industry

Philippe Citroën, Director General, UNIFE

Philippe Citroën, Director General (UNIFE)

The European rail supply industry is a diverse and geographically widespread industry – from thousands of SMEs to major industrial champions; from rail supplies in rolling stock to signalling systems (in particular ERTMS) and infrastructure. In total the European rail supply industry employs no less than 400 000 people all over Europe. With absolute sales of €47 billion, the European rail supply industry still accounts today for 46% of the market for rail products in the whole world. In this era of digitalization, the world leadership of this export-oriented industry is attributed primarily to its capacity to innovate, and the role played by SMEs is in this area, fundamental.

The good news for the European rail manufacturing industry is that demand for our products will continue to increase across all continents. According to the latest edition of the World Rail Market Study (published in September 2016), the market volume is set to increase by 2.6% a year and reach about €185 billion in 2021. These growth forecasts can be explained by an increased need for rail mobility brought about by the challenges of urbanisation, climate change or the scarcity of energy sources. 

With the often indispensable support of policy makers, it is up to European companies to do their utmost to conquer these markets on a global scale. The challenge is considerable because our companies are faced with increasingly limited access to certain key external markets, while competition from Asia, especially China, is increasingly fierce in the so-called accessible market. 

This worrisome situation was perfectly summed up in the European Parliament’s Resolution on the Competitiveness of the European Rail Supply Industry, adopted 9 June 2016. MEP’s noted specifically that “while the EU is largely open to competitors from third countries, third countries have several barriers in place that discriminate against the European RSI” and that “third-country competitors, especially from China, are expanding rapidly and aggressively into Europe and other world regions, often with strong political and financial support from their country of origin.”

As such, the European Parliament called for “a fair and level playing field in global competition and for reciprocal market access in order to avert the risk of job losses and to safeguard industrial know-how in Europe.” We are now looking forward to working with the European Commission, the European Parliament, Member States such as France, and industry stakeholders to ensure that the relevant recommendations from the European Parliament are put into place as soon as possible.

UNIFE

The rail revolution is in motion

Jean-Pierre Audoux, General Delegate, French Railway Industry Association (FIF)

The 10th edition of SIFER, the only international railway trade fair organised in France, is the perfect opportunity to review some of the major developments in the sector, and to tackle some of the industry’s challenges for the future.

Jean Pierre Audoux1999 - 2017: the railway sector has been subjected to major geo-economic changes

Four major trends have emerged at the beginning of the 21st century. The first one is that the rail market has grown more consistently than the world’s GDP. This important fact demonstrates continuous dynamism in this sector. Second trend: the global railway market has changed in size within the last 20 years. The latest study conducted by Roland Berger estimates a turnover of 159.3 billion Euros in the market, against 35 billion in 1994, according to a Mercer study. Our third observation is that the market has become global, this being closely connected to the fast-pace emergence of Asia. Many investments have been made by China, which has turned the railway industry into one of its strategic axes of development. Previously considered by European integrators as an Eldorado, this idea has now been overturned. It is now China’s turn to develop its market abroad. Finally, our fourth observation confirms our previous statement: giants in the rail industry at the time, such as Alstom, ADTranz, or Siemens, lost some of their market shares and saw their margins decline due to the pressure caused by their new European competitors, as well as Asian competitors.

What is France's place in this globalised economy?

France has been lucky enough to have acquired expertise in almost all railway segments: automated metros, high speed, signalling... In China, opportunities continue to arise for French companies, especially when it comes to tramways and signalling. Our companies have a strong international presence that enables them to push back the Asian emergence and new European players. We also need to keep in mind how attractive our territory really is: numerous mergers and acquisitions have been made in France from abroad. This is real proof of our savoir-faire, but also a source of concern. On the domestic side, many projects will highlight our French savoir-faire on a global scale. These include the completion of four new high-speed routes as well as intercity lines (including Normandy, which will be the first region to become AOT (responsible authority) for the TET regional intercity services). The urban and peri-urban markets are in full expansion, as illustrated by the Grand Paris project and the renewal of rolling stock in Ile-de-France. Despite the financial crisis, investments in the network’s renewal have tripled between 2005 and 2015. Today, it is not only a matter of renewal, but modernisation. However, this positive outlook should not distract from more sensitive matters, such as freight. Additionally, the big debate is still about opening up the market to competition for passengers. There are, in fact, many things at stake for the railway industry.

How about 20 years from now? Rail operators will become operators of mobility!

There again challenges are numerous, and one question remains in terms of evolution. Great innovations were born in the past: the TGV (high speed train) of course, but also tramways (which uses power supply from the ground) or even hybrid trains. The latest great technological and societal revolution the rail industry has experienced is high speed. Innovation now focuses more on how to optimise maintenance and passenger information... Railway operators strive to become operators of mobility! The sector is facing a growth in urbanisation, which make the construction of lines in cities much more expensive. At the same time, rail tracks are less connected than roads. A revolution is needed, starting with the digitalisation of railways. Would the solution be a collaboration with other sectors specialising in alternative modes of transport or other mobility services? Why not…? The main trends of tomorrow will be linked to intermodality, mobility and the importance of our cultural heritage.

FIF

To remain competitive in the world, companies in the French railway sector must enter their digital coming of age

Yves Ramette, President, i-Trans and IRT Railenium

Yves Ramette

With a turnover of 4.2 billion euros, 30% of which is earned abroad, the French railway sector is ranked amongst the world's top three, behind China and Germany. The expertise of our industrial ecosystem is world renowned and some of our innovations have become emblems of our savoir-faire: high-speed, tramways, metro automation. And yet... The railway sector is at a pivotal period, torn between the desire to export its assets to large developing countries such as India, and the ambition to spark off a new technological era, which could generate breakthrough innovations such as the autonomous train.

In order to maintain its competitiveness and thus continue to generate economic value in its territory, the railway sector must invest more in research, development and innovation, and rely on the digital revolution. To achieve this, the railway industry must accept cross-fertilization with other industrial sectors. Car pooling, uberisation, low-cost airlines, satellite geolocalisation... when you consider how innovative these competing methods of transport are, both from a technological and economical point of view, the rail industry seems sidetracked by its competitors. Companies in the railway industry must give themselves the means to regain their position as technological and economic leaders.

The collaboration of all its participants is one of the keys to our future success... How? By creating partnerships with the FrenchTech ecosystem, by building major RDI programmes dealing with major future technological challenges, by keeping Fer de France’s project ongoing, in the hope of implementing a national training scheme adapted to the market’s demand, which will attract new talent and improve their learning tools.

I-Trans and Railenium, modern financial and innovation tools, are not yet sufficiently called upon by the major stakeholders in the field.

These tools can allow the implementation of a global strategy of bringing to the market the newest railway innovations and services led by the main stakeholders in the industry, such as transport operators, network managers, engineering schools, innovative start-ups, SMEs / SMIs, and research experts within many industry sectors... This would aim at introducing new high-performance technical and economical systems to the market, optimising testing procedures, and developing digital pre-qualification tools and models. We would unhesitatingly  enter the Europe’s – or even the world’s – playground, and compete with the very best, in the best of conditions.

Five priority objectives are regularly discussed within the entire industry: cost reduction, operational performance / safety, development cycle efficiency, ecological footprint, and improvement of the passenger’s travel experience. Meeting the challenge is within our reach, we must now seize the opportunity and take action.

i-Trans Railenium

Railway companies in the Hauts-de-France must unite and turn to the international market

Héric Manusset, Managing Director, Association of Railway Industries of Hauts-de-France (AIF)

 

Heric ManussetThe 10th edition of SIFER (21-23 March 2017), the only international railway trade fair organised in France, is the perfect opportunity to review some of the major developments in the sector, and to tackle some of the industry’s challenges for the future.

A market now turning to international opportunities

With 14,000 jobs and more than 200 companies, the Hauts-de-France now accounts for 40% of French railway production. However, since 2012, the market has changed a lot and has become globalised. 10 years ago, an international focus was still in its infancy, today it has become a priority. The opportunities are enormous for businesses in the region.

For example, out of the world’s 500 cities with a population of 1 million +, 330 do not have urban transport, with 300 of them located outside Europe. Faced with this internationalisation, suppliers must be able to innovate, but most of all, to work hand in hand in order to come up with complete solutions. This is a major challenge for SMEs and SMIs in the region, who are used to offering quality solutions, but not yet sufficiently comprehensive. In order to conquer new markets, particularly those in the Maghreb and the UK (where the infrastructure market is promising), and to allow subcontractors to gain more influence, one solution would be to collaborate by setting up business groups.

The first of these was launched at the end of 2015. Axelium brings together about a hundred graduates, engineers and technicians able to provide skilled expertise in the railway industry as well as in the aeronautics, defence, automotive and environment sectors.

Diversification: the key to success

Another challenge for regional railways is the shift towards diversification. Within the last 20 years many innovations have emerged, especially in high-speed, but tomorrow’s challenge is to build infrastructures that are more eco-friendly (with the careful dismantling of train components), more comfortable (more WiFi, less noise) and especially more passenger capacity. The use of new technologies and ever-lighter and more efficient materials will become paramount. Modes of construction are evolving and will continue to evolve.

Processes and materials can be used in the railway industry as well as in the naval or logistics sectors. Therefore a company using welding techniques should be able to work in the railway sector but also in the marine sector, building naval barges for example. Diversification is a necessity, especially with the arrival of the Seine-Nord canal.

Maintenance: a sector for the future

The last major turning point for the railway industry: that of maintenance. This sector was previously the exclusive preserve of the SNCF, but tomorrow, the regions (owners of the fleets) will be able to maintain their trains. As a railway fleet has an average life of 8-10 years, it will be necessary for trains to reach higher speeds, hence the need for a diversity of skills.  A promising market, where our local companies will be able to position themselves.

aif