Hyundai Rotem: Korean High-speed Rail
HigH-speed Rail emeRges as gReen TRanspoRT
Railroads were once regarded as a reminder of a bygone era, before the advent of modern airplanes and widespread automobile ownership. Today, however, rising energy prices and environmental concerns have encouraged a railroad comeback around the world. Railway transport consumes 20 percent less energy than passenger and cargo ships and 60 percent less than automobiles, while emitting 70 percent less and 90 percent less carbon dioxide respectively.
Many countries are connecting cities with highspeed railways to promote balanced land development. According to the Union Internationale des Chemins de fer (UIC), an international rail transport industry body, 15,000km of new highspeed railway lines1 will be built worldwide between 2010 and 2015, for a market size of $390 billion ($65 billion on annual average). High-speed rail was first introduced in Europe and Japan and has spread to fast growing emerging-market economies in recent years. In 2010, China had a high-speed railway network
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Expected Progression of World High-speed Rail Networks
(km) 45000 40000 35000 30000 25000 20000 15000 10000 5000 0 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015 2018 2021 2024
Source: Union International des Chemins de fer (2010), High speed world network evolution.
covering 4,000km with plans to add 9,000km of tracks to the system by 2012. Brazil will build 510km of high-speed rail in preparation for the 2014 World Cup and 2016 Olympic Games. Even the US, the quintessential auto-addicted nation, may warm to the idea of high-speed railways. A 1,280km high-speed rail is being built in California worth $45 billion.
highly developed economies like Canada where Bombardier, the world’s largest train manufacturer, is headquartered. Hyundai Rotem operates within a small club dominated by four manufacturers who control 65 percent of the global rail transport market: Bombardier (22%), Alstom of France (19%) Siemens of Germany (15%), and GE of the US (9%).2 Alstom, which concentrates on highspeed rail, ranks first in the market with the TGV, followed by Kawasaki Heavy Industries of Japan with the Shinkansen, and Siemens with ICE, both with a 12 percent share.3 Manufacturers Hyundai Precision and Engineering, Daewoo Heavy Industries (now Doosan Infracore) and Hanjin Heavy Industries led Korea’s rail transport industry until the 1997 currency crisis forced consolidation of their rail transport businesses into a new entity, Korea Rolling Stock Corporation (KOROS), in 1999.
Hyundai RoTem pioneeRs KoRea’s Rail indusTRy
Although Korea’s successful high-speed railway service, Korea Train eXpress (KTX), has earned global recognition, even the millions of passengers who ride Korea’s trains daily may not realize that Korea has become a source of railway technology to the world. At the forefront of Korea’s burgeoning rail renaissance is Hyundai Rotem, which has sold rail cars to emerging market economies like Iran, and to
1 Defined as railways running at a speed of at least 250km per hour. 2 Bombardier (December 2009), Global Industries Conference 2009 Presentation. 3 Taurus Investment Securities (April 2010), Riding on the HSR.
April 2011 | SERI Quarterly | 93
Hyundai Rotem: Korean High-speed Rail
2 Hyundai Rotem’s Rail Transport Sales
(billion won) Domestic Sales Overseas Sales 949.1 819.1 769.4 772.6 782.1
436.7 419.8 272.2
145.8 2005 Source: Hyundai Rotem 2006 2007 2008 2009 2010
KOROS was acquired by Hyundai Motor Group in 2002 and renamed Rotem, which became Hyundai Rotem in 2007. Hyundai Rotem’s rail transport business grew |Table
rapidly in 2008 on the back of revitalization of private investment projects related to Seoul’s rail transport business and expansion of light rail...