AI is Redefining the Light Rail Market, Revenue to Grow by USD 3.74 Billion from 2024-2028 Due to Urban Expansion - Technavio Report

NEW YORK, Sept. 13, 2024 /PRNewswire/ -- Report with market evolution powered by AI- The global light rail market  size is estimated to grow by USD 3.74 billion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of  4.1%  during the forecast period.  Rapid growth of urban areas is driving market growth, with a trend towards high investment by governments in light rail. However, volatility in prices of raw materials  poses a challenge. Key market players include ALSTOM SA, CRRC Corp. Ltd., General Electric Co., Hitachi Ltd., Hyundai Heavy Industries Group, Kawasaki Heavy Industries Ltd., Kintetsu Group Holdings Co. Ltd., Knorr Bremse AG, Mitsubishi Heavy Industries Ltd., Mott MacDonald, Parsons Corp., Pesa Group, Samvardhana Motherson International Ltd., Schunk GmbH, Siemens AG, Stadler Rail Ag, SYSTRA SA, Thales Group, WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORP., and WSP Global Inc..

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Key Market Trends Fueling Growth

The light rail market is experiencing significant growth due to increased government investment in this sustainable and efficient public transit solution. With urban populations growing and cities facing congestion and environmental concerns, governments are turning to light rail as an answer. In May 2023, the Biden-Harris administration allocated over USD700 million in grants to modernize six US transit systems' passenger railcars. This funding not only expands existing networks but also initiates new light rail projects in cities previously relying on buses or personal vehicles. The influx of public funds stimulates demand for rail infrastructure, rolling stock, and related technologies, creating a positive ripple effect. Additionally, these projects are often part of broader urban renewal initiatives, fostering economic development along rail corridors. The commitment to light rail also aligns with global efforts to decrease carbon emissions and enhance urban air quality. As a result, the light rail market is thriving, with manufacturers, construction firms, and technology providers all benefiting from this trend. Government investment is predicted to continue fueling market expansion throughout the forecast period. 

The Light Rail Market is experiencing significant growth due to increasing demand for energy-efficient, sustainable transportation in urban areas. Public transport is becoming a priority as traffic congestion continues to be a challenge. Refurbishment of existing rolling stock, including axles, wheelsets, traction motors, pantographs, and passenger information systems, is driving industrial activity. Mining and freight industries also utilize light rail for transportation. Shared mobility solutions are trending, with higher capacity, low-floor vehicles offering a better passenger experience. Sustainable mobility initiatives, such as electrification and carbon emissions reduction, are key factors. Smart technologies like mobile ticketing, real-time information, IoT sensors, automatic collision avoidance, and video surveillance enhance the passenger experience. Light rail vehicles serve both passenger and freight transportation on dedicated tracks, making them a viable alternative to heavy rail systems and metro systems. 

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Market Challenges

• The global light rail market faces challenges due to the volatility in raw material prices, particularly for essential components like steel, aluminum, and cast iron. This price instability can negatively impact market growth as it increases production costs, which may be passed on to consumers. Raw material prices fluctuate based on market demand and supply, currency fluctuations, and geopolitical tensions. For instance, the price of iron ore, a key component, has risen due to high demand and supply shortages, reaching approximately USD120 per dry metric ton unit (dmtu) in May 2024, up from approximately USD104 per dmtu in May 2023. The ongoing conflict between Russia and Ukraine has caused aluminum prices to grow, adding to the market uncertainty. These price fluctuations directly impact the cost of light rails and affect the profit margins of stakeholders in the value chain. Import and export tariffs also vary by region, complicating the pricing structure of raw materials and posing challenges to the growth of the global light rail market.
• The Light Rail Market is experiencing significant growth in urban transportation, particularly for passenger services. Challenges include supplying both lower and higher capacity vehicles for different demand levels. Dedicated tracks are essential for efficient operation, but infrastructure costs can be high. Sustainable transportation is a priority, with electrification and carbon emissions reduction key considerations. Rapid transit via light rail vehicles offers a more sustainable alternative to heavy rail systems and freight transportation. Urban areas benefit from improved public transportation, with a focus on passenger experience. Mobile ticketing, real-time information, and smart technologies enhance the user experience. IoT sensors, automatic collision avoidance, and video surveillance contribute to safety and reliability. Light rail vehicles come in various configurations, including low-floor and high-floor designs, for easy access and interconnecting cities. The market faces competition from other transportation services, including metro systems and long-distance routes. The market requires continuous innovation, including advancements in passenger capacity, electrification, and smart technologies to meet the evolving needs of urban transportation. Rail supply must adapt to these demands while maintaining cost-effectiveness.

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Segment Overview 

This light rail market report extensively covers market segmentation by

1. Type 
• 1.1 High capacity light rail
• 1.2 Low capacity light rail
2. Application 
• 2.1 Intra-city transport
• 2.2 Inter-city transport
3. Geography 
• 3.1 Europe
• 3.2 APAC
• 3.3 North America
• 3.4 Middle East and Africa
• 3.5 South America

1.1 High capacity light rail-  The light rail market is a significant segment of the public transportation industry. It offers an efficient, cost-effective, and eco-friendly alternative to traditional bus and car commuting. Light rail systems connect urban areas, reducing traffic congestion and promoting sustainable urban development. These systems are reliable, frequent, and convenient, making them a popular choice for commuters. The market is expected to grow due to increasing urbanization and government investments in public transportation infrastructure. Companies like Bombardier, Siemens, and Alstom dominate the market with their innovative solutions and strong customer base.

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Research Analysis

The light rail market is experiencing significant growth as public transport becomes an increasingly important solution to traffic congestion in urban areas. Light rail systems offer energy-efficient transport options, reducing carbon emissions and contributing to sustainable urban transportation. Industrial activity and mining sectors are major consumers of light rail transportation services due to the need for heavy cargo movement. Refurbishment of existing rolling stock is a key trend in the market, extending the life of existing assets and reducing the need for new purchases. Light rail vehicles come in various capacities, including lower and higher floor models, catering to inner city and interconnecting cities' transportation needs. Components such as pantographs, axles, wheelsets, traction motors, passenger information systems, and air conditioning systems are essential for the efficient operation of light rail vehicles. Dedicated tracks distinguish light rail from other transportation modes, providing a smoother and faster ride. Metro systems and heavy rail systems are different from light rail, with the latter offering more flexibility in route design and lower infrastructure costs. Shared mobility solutions are also integrating with light rail systems, enhancing urban transportation options and promoting sustainable transportation.

Market Research Overview

The Light Rail Market is experiencing significant growth due to the increasing demand for energy-efficient and sustainable transportation solutions in urban areas. Traffic congestion is a major challenge in many cities, making public transport an attractive alternative. Light rail systems, also known as trams or streetcars, offer a viable solution with their dedicated tracks and ability to carry both passengers and freight. Refurbishment of existing rolling stock is a key industrial activity in the light rail market. Components such as pantographs, axles, wheelsets, traction motors, passenger information systems, and air conditioning systems are regularly upgraded to improve efficiency and passenger experience. The light rail market caters to both passenger and freight transportation needs. Rapid transit systems, metro systems, and heavy rail systems are all part of this market. Sustainable transportation is a major focus, with a reduction in carbon emissions being a key goal. Smart technologies such as mobile ticketing, real-time information, IoT sensors, automatic collision avoidance, and video surveillance are increasingly being integrated into light rail vehicles to enhance the passenger experience. The market also offers both lower and higher capacity vehicles, as well as low-floor and high-floor options, to cater to different transportation demands. The light rail market serves both inner city and interconnecting cities, making it an essential part of urban transportation infrastructure. The market is expected to continue growing as the demand for transportation services increases and the need for sustainable mobility solutions becomes more pressing. Rail supply companies are investing heavily in research and development to meet the evolving needs of the market.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Type
• High Capacity Light Rail
• Low Capacity Light Rail
• Application
• Intra-city Transport
• Inter-city Transport
• Geography
• Europe
• APAC
• North America
• Middle East And Africa
• South America

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

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SOURCE Technavio