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Railway industry with high turnover in 2016

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In 2016 the German railway industry achieved a high turnover level again amounting to 11.8 billion euros. The export, in particular, proved to be very strong-selling with about six billion euros, which is a plus of 5.2 percent. This resulted in an export rate of 52 percent for the German railway industry in 2016. The sector was not satisfied with the present incoming orders from abroad. The decline in 2016 can be explained as part of the volatile business cycles, however, the globally increasing tendency of the market foreclosure might be reflected here as well. The number of employees remained high with 50,500 in 2016. The German Railway Industry Association (VDB) requests the politicians to undertake a railway research programme for a fast digitalisation of the rail transport directly after the parliamentary elections. In addition to that the politicians have to step up their efforts considerably for more free trade and fair competition as seen from the perspective of the highly export-oriented sector. To strengthen public acceptance of the rail freight transport it would be significant to use very low-noise trains at last and understand the noise protection in its entirety.

"The business with environmentally-friendly and climate-friendly mobility 'made in Germany' remained very successfully in 2016 – despite little fluctuations", said VDB President Volker Schenk on the annual press conference in Berlin today. "We are glad about this development. And it shows: The railway industry is one of the flagship industries of our country."

A major contributor to this success is the export business with its 6.1 billion euros. It has even increased slightly by about five percent compared to the very high level in 2015. The domestic business was a bit weaker with 5.7 billion euros. It dropped by almost twelve percent. About 74 percent were orders for rail vehicles and their components. The turnover in this field reached 8.7 billion euros. The domestic rail vehicle business was on the decrease after two very good business years. It dropped by 17 per cent to 3.9 billion euros. The foreign business was much stronger. The vehicle business reached 4.8 billion euros, a plus of about seven percent. The rail infrastructure equipment business remained disillusioning. The turnover of digital control and safety technology, tracks, switches, rail electrification, signal boxes and railway crossings stagnated on the level of the previous year at 3.1 billion euros.

"In 2016 the orders received by the German railway industry amounted to a total of 11.5 billion euros", said Schenk. "This is about 23 percent less than the peak value of 2015. To say it more clearly: We are not satisfied with that. – The demand within Germany amounted to seven billion euros in 2016. That is about ten percent less than in 2015, but a reasonable value. The demand from abroad only reached 4.5 billion euros and therefore went down considerably by 38 percent."

Schenk believes that the decline in the demand can be partly reduced to statistical reasons: "A high volatility is common practice in our long-term project business. A large order can provide for a peak as was the case in 2015." Schenk pointed out with concern that the global frame conditions deteriorated in 2016: "There is an advance to protectionism that is increasing worldwide: commitment to localisation, restrictive joint ventures, untransparent procurement procedures, generous export financing by the state, market foreclosure. What will be the consequences? – The German and European economic policy has to increase its support for free trade, open access to the market and fair competitive conditions. An important chance for this is the free trade agreement with Japan."

 

"The rail transport needs a sustainable political commitment for research and development."

 

"The German railway industry is in a consolidation phase", said Schenk. "Overstaffing will be reduced and the companies are positioning themselves anew. Notwithstanding this our sector was able to ensure a high level of employment again in 2016. The number of direct employees amounted to 50,500. A good number, however a slight minus of 2.9 percent compared to 2015. We would have wished for the opposite sign."

For the first time ahead of parliamentary elections the entire railway sector has agreed upon three focal demands. A total of eight associations have become involved in the initiative which is supported by industrial enterprises, railway operators, environmental associations and trade unions. The representatives of the sector demand decisions for the ecologically and economically efficient rail transport from the politicians. The rail transport needs fair framework conditions in the competition with other carriers, a sufficient funding of the railway system and a sustainable political commitment for research and development. "A railway research programme is a must on the agenda of the next federal government", said Schenk, "because the innovations in the railway industry are good – for railway operators, passengers, residents living nearby railroads, the climate protection and for the whole society." The digital rail transport of the future should be 'made in Germany'.

Ben Möbius, Chief Executive Officer of the VDB, emphasised the great importance of a low-noise rail freight transport to strengthen public acceptance. Therefore the announcement made by the Federal Ministry of Transport to introduce an innovation subsidy for very low-noise freight wagons is an important political step in that direction. The subsidy is intended to provide incentives for investments into new freight wagons that are quieter than European noise protection standards. "Noise protection must be implemented in its entirety, i.e. both for the rails and the vehicles. Here too, digital technologies may be effective such as automated anticipatory driving of trains or axially precise noise monitoring. Low-noise rail freight transport that is rightly expected by the people does not have to be an utopian dream", stated Möbius.

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