Brussels, 02/04/2015 (Agence Europe) - In a report published on Wednesday 1 April 2015, rating agency Standard & Poor's (S&P) stated that, “after years of stability, the train manufacturing industry in Europe and beyond has entered a period of renewed merger and acquisition (M&A) activity”. According to S&P, this new trend is expected to continue over the next few years.
The rating agency explains that among the reasons for this new trend in mergers and acquisitions are increased standardisation in rolling stock and infrastructure in the EU and “competitive pressure” affecting all market players. With regard to the first point, S&P notes that the introduction of a European railway traffic management system creates, “rationalisation in the signalling market”.
With regard to the second, the report expects a number of issues, such as train comfort, operational costs and security questions, to become “important differentiating factors”. They also note that “we believe companies that invest more will be better able to differentiate themselves in terms of their products' quality over time”. The European railway network has effectively already been built to a large extent, particularly in Western Europe, where 80-100% of demand involves replacing materials and not the construction of new lines. With regard to high-speed trains, the study notes that these already exist between many capital cities.
The study also compares rail markets on the different continents and shows that the market in Europe is both the biggest (€40 billion, 35% of the world market) and the one that will experience the lowest rate of growth over the next few years (2.3%, compared to 7.2% in Latin America and 9% in the Middle East and Africa). (Jean Comte)