Analysis of China's Railway Equipment Industry 2008

Analysis of China's Railway Equipment Industry 2008

Railway equipment includes EMUs, locomotive and railway freight car, etc., in terms of the Chinese railway planning, that large railway freight car and bullet train is the direction of .development of China’s railway equipment manufacturing industry. The gap of locomotive manufacturing industry between China and developed countries is relatively large, especially in high-power electric locomotive and EMUs. After technology acquisition, China has acquired high-power electric locomotives, diesel locomotives and 200 km / h EMUs. Presently, the localization rate of parts and components of electric locomotive and EMUs reaches 70 per cent and 75 per cent respectively, and China has developed 300 km/h EMUs based on digesting and absorbing overseas’ new technologies.

In terms of the international railway equipment market that global railway equipment industry is on a more monopoly competitive circumstance. The merger of locomotives and railway car plants has restructured global railway equipment market that global railway equipment giant dominated more market share. Presently, there are three global giant of global locomotive and railway car plants-- Germany's Siemens, France’s Alstom and Canada’s Bombardier, they hold 55 per cent of total global market share (each 14%, 18% and 23%) and advanced technology and higher market concentration. Bombardier holds the largest market share of global railway equipment technology and sales market and Alstom remains advantage on EMUs and ordinary single-decker and double-decker electric locomotive market.

Although the number of China's railway equipment manufacturers is quite large and products is relatively various, but the weakness is that they produce the speed of below 200 km/h general train’s low-end products and the production capacity is surplus and price competition is in chaos; and the lack of design and production capacity of advanced technology of railway equipments which can not meet the demands of high-end products. In order to adapt to the demand of current railway development, the Chinese government took a measure to pay huge amounts of money through international cooperation with international leading manufacturers to introduce high-end products, digesting and absorbing advanced manufacturing technology to upgrading Chinese railway equipment’s technology level.


The high-speed railway equipment manufacturing industry is the priority fields that supporting by governmental policy. In terms of the current circumstance of China’s railway equipment manufacturing industry, is in a low level of technology, therefore, government policies are encouraging localization and the introduction of advanced technology then digestion and absorption, the Chinese government spent 10 billion yuan to buy advanced international technology for state-owned enterprises to upgrade their technology capability and offered huge amounts of orders.

The total railway fixed assets investment of China's 11th Five-Year Planning period is 1.5 trillion yuan, of which the purchase of rolling stock and the investment of technological transformation is 250 billion yuan. It is estimated that by 2010, the amount of China’s locomotives will reach around 19,000 units, EMUs will reach around 1000, railway carriages about 45,000 units and railway freight car will reach 700,000 units.

The great development of the Chinese railway equipment manufacturing industry has benefited by the growth of railway investment, which has promoted railway equipment enterprises’ competitive advantage, such as those manufacturers who have the technology of high-end products will be the main beneficiaries, in addition, due to the higher standard of high-speed railway technology, therefore, however expecting that the Chinese railway equipment parts suppliers still need a certain period of time to enter the high-speed railway equipment market.

Contents
1 Overview of international railway equipment market

2 Overview of China's railway equipment market

3 Chinese railway equipment industry characteristics
3.1 Domestic demand is the main factor
3.2 Strict regulation and less market freedom
3.3 Policy priority to support large-scale state-owned enterprises
3.4 Comprehensive technical upgrading
3.5 The scale of industry

4 The circumstance of China’s railway equipment industry
4.1 Railway carriage and EMUs
4.2 Locomotive
4.3 Railway freight car
4.4 Parts
4.5 Localization

5 Performance and profitability of railway equipment industry
5.1 Performance 2007
5.1.1 Analysis of operation 2007
5.1.2 Parts and EMUs
5.2 Performance Jan-May 2008
5.2.1 The growth of revenue
5.2.2 The rising gross profit
5.2.3 The increasing proportion of high-end products
5.2.4 The increasing of rate of capacity utilization
5.2.5 Expense ratio

6 The development of railway equipment industry
6.1 Railway investment
6.1.1 High-speed railway
6.1.2 Urban transit railway
6.2 Railway investment in fixed assets
6.3 Impact on railway industry development
6.3.1 Impact of rising steel prices
6.3.2 Impact of the appreciation of RMB
6.3.3 Growth of overseas demand
6.3.4 Rolling stock and EMUs(including railway freight car)

7 Conclusion



Figure Index
The world market share of railway rolling stock
The market share of the world bearing
The annual sales of bearing manufacturing industry
The sales growth of railway transportation equipment industry
The total fixed assets investment of China’s railway
The growth trend of sub-sector of locomotive
The income growth of railway equipment industry and its main sub-sectors
The rising price of steel
The gross profit of railway equipment industry
The gross profit of railway equipment industry and its major sub-sectors
The proportion of costs of total income
Administration expense
Liability/asset ratio
China’s railway operation mileage
Comparison of infrastructure investments between railway and highway
The proportion of railway line for passenger traffic’s investment
Impact of the demands of railway equipment industry
The relationship between railway fixed assets investment and railway equipment industry
Steel prices
The rising industry gross profit
The growth of demand from Asia-Pacific and other emerging markets
The service life of railway freight car of North American
The growth of locomotive and EMUs
The growth of locomotive and EMUs Jan-Feb 2007/2008
The monthly output of railway freight car


Table Index
The demand of railway equipment of the Chinese 11th Five-Year Planning
Global railway rolling stock manufacturing technology
The cooperation of bullet train between China and overseas
The cooperation of locomotive between China and overseas
The output of Jan-May 2008
China's railway network construction data and future planning
The urban transit railway planning mileage of some cities in China in 2010
The railway investment incomes of The Chinese enterprises during China’s 11th Five-Year Planning
Comparison of the energy consumption and transport cost between different transports
The growth of China’s railway freight car export Jan-Apr 2008