Siemens AG sees the rail market bouncing back from a coronavirus slump, aided by an international push to slash carbon-dioxide emissions from transport. The global market for trains and related infrastructure will expand by a quarter over the next three years to exceed pre-coronavirus levels, Michael Peter, who heads the German engineering giant’s mobility unit, said in a phone interview.
Rising government spending to cut transport emissions is expected to drive the gains after a difficult year for the sector, Peter said. The European Union, one of the world’s biggest train markets, on Thursday announced it will intensify efforts to cut greenhouse gas emissions by 2030, a move that’s expected to favor rail-equipment manufacturers.
“Lots of countries are bringing forward their climate targets,” Peter said. “Rail must be the backbone of an emissions-free transport system.”
A rail recovery would be a boon to Siemens, which expects global sector sales to drop 9% this year after the pandemic slashed travel demand, slowing purchasing and reducing the need for maintenance. In Europe, the distance passengers traveled by train fell 70% in the third quarter, according to the latest data from Eurostat. Siemens expects vaccinations to help push the number of trips to pre-crisis levels next year, Peter said.
Europe is expected to be a bright spot after nations including France and Germany said they’d increase rail-related spending to reduce flying and driving. Siemens expects rising investments in new high-speed trains and the digitization of rail networks, Peter said.
“All European countries have train networks that often have been neglected,” the executive said. “That’s a huge opportunity.”