Railroad Equipment Manufacturing

Railroad Equipment Manufacturing

Brief Excerpt from Industry Overview Chapter:

Companies in this industry manufacture locomotives, freight and passenger rail cars, and brakes and other parts and equipment used in railroad operations. Major companies include Greenbrier, Progress Rail, Trinity Rail (Trinity Industries Subsidiary), and Wabtec (all based in the US), along with Alstom (France), Bombardier (Canada), CRRC Corporation (China), Hitachi (Japan), and Siemens (Germany).

COMPETITIVE LANDSCAPE

Demand for freight rolling stock is driven by fuel prices, as high gas prices shift freight transport from trucks to rail. Demand for passenger rail rolling stock is driven by public investment in regional rail transportation. The profitability of individual companies depends on securing long-term sales contracts with railroad companies and leasing agencies. Large companies have advantages in manufacturing economies of scale. Small companies can compete effectively through consulting services and custom-building locomotive and passenger railcars. The US industry is highly concentrated: the 50 largest companies account for more than 95% of industry revenue.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major products include new and rebuilt diesel-electric locomotives and parts and accessories for railroads, which both account for about 35% of the industry revenue. Other products include trains and train cars as well as airbrakes and railway equipment.