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Japan rail firms pushing shinkansen as global standard

20131219_train_article_main_imageFour major Japanese railroad companies are teaming up to make the country’s high-speed system the global standard, as they face fierce competition from Canadian and European rivals.

   As soon as April, they will form an association to promote Japanese high-speed rail and magnetic-levitation technology and standards abroad, with an eye on scoring plum contracts in such countries as the U.S., Malaysia and Singapore.

   The global market for railway infrastructure, including trains and parts, is growing at more than 2% annually and is expected to reach about 22 trillion yen ($209 billion), up 20% from today, by 2020.

   Japanese companies, however, hold a roughly 10% sliver of a market dominated by Canada’s Bombardier, France’s Alstom and Germany’s Siemens. The Western trio has a head start in offering integrated products and services, including maintenance and train operating systems, whereas Japanese firms only sell cars and equipment.

   The fate of the rivalry hinges in part on global acceptance of two different standards. Bombardier, Alstom and Siemens are pushing for high-speed rail networks that can also accommodate conventional railways and freight trains. Japanese companies, meanwhile, are backing a standard under which high-speed trains run on dedicated tracks — similar to the famed bullet train linking Osaka and Tokyo — arguing that such a system offers greater safety.

   Central Japan Rail, East Japan Rail, West Japan Railway and Kyushu Railway will form the new international high-speed rail association to better coordinate their promotion of the Japanese standard, though each will continue to individually pursue orders.

   The partners expect foreign rail companies and government agencies to climb aboard in such markets as the U.S., the U.K., Australia, Taiwan, Singapore, Malaysia and Vietnam. Hitachi, Kawasaki Heavy Industries and other firms may also get involved.

   The association aims to stock its advisory committee with heavyweights from target markets, such as Tom Schieffer, former U.S. ambassador to Japan.


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