Despite challenging European market conditions putting pressure on Stadler, an unprecedented flexibility sees the company take significant steps towards new markets and future success
Railway Strategies last featured Stadler Rail back in March 2015 celebrating the success of the company’s KISS and FLIRT models. Over the time since, the company has made significant progress in continuing the delivery of contracts, winning new orders and expanding its global footprint as it moves towards establishing new and exciting markets around the world.
Firstly, significant progress has been made on the international roll out of Stadler’s FLIRT trains. An important order from Dutch State Railways (NS) for 58 trains in April 2015 brings the total order number for the model up to over 1100. Amounting to around 280 million euros, the order exemplifies a key strength of Stadler to deliver to lead times that are unrivalled in the rail industry, as it aims to deliver all 58 trains to the customer by the end of 2016. Peter Jenelten, Executive VP for Marketing and Sales explains: “Significant funding became available for the development of infrastructure in countries joining the EU over recent years. Unfortunately, this funding was sometimes distributed too late, or was entirely exhausted and projects had to be concluded under extreme time pressures.”
In May, the company reached another milestone in its FLIRT programme with the first order for its bi-modal train. The 43 million euro order for five diesel-electric trains will be delivered to Italian, Region Valle d’Aosta in 2018. Stadler will also be delivering a further 21 FLIRT EMU (electric multiple unit) trains to MÁV-START Zrt in Hungary over the next year, which will bring that customer’s FLIRT fleet up to 133. Eastern Europe has been a strong emerging market for Stadler over the last few years with 54 trains currently operating in Poland alongside a 700-employee strong assembly plant, and other trains operating throughout the region. In Hungary, the company has set up a maintenance facility, staffed by 455 people to maintain not only its own, but also third-party supplier trains.
In addition to the FLIRT model, Stadler has also had a successful year with its innovative, double-decker KISS (comfortable, innovative, speedy suburban in German) train. In November 2015, the company reached a historic moment with the delivery of the 50th KISS unit to Swiss Federal Railways (SBB). The contract for the first 50 150-metre multiple-unit trains was signed at the end of August 2008 at a value of around CHF one billion. In an unprecedented time frame Stadler was able to fully develop, manufacture and commission the trains in less than two years with the first train going into operation in June 2010. A total of 5.5 million parts go into the production of the KISS, including 8250km of cable and 125 tonnes of paint.
The project for SBB has been hugely significant in Stadler forging a position in a new market segment and in the time since that first order the company has sold over 200 trains to customers in Germany, Austria, Luxembourg, Russia and Azerbaijan. In addition to this, the company is participating in a number of tenders across several continents.
Stadler Rail has also been awarded a major opportunity with SBB for 29 high-speed EC250 electric trains. “This project allows Stadler to break into the high-speed field,” explains Peter. “From 2019, our trains will link three countries, travelling through one of the world’s longest tunnels and there is significant potential in a range of European countries for trains capable of reaching speeds of up to 250 km/h. Entering new markets and segments is part of our new strategy and is a reaction to developments in Western Europe following the 2010 debt crisis and two subsequent currency shocks.”
As part of this market expansion, in November 2015 Stadler announced the acquisition of Spanish business, Rail Vehicles, from Vossloh. The company, which has an annual turnover in excess of 200 million euros, is a specialist in diesel-electric locomotives. “With this takeover, another excellent opportunity presented itself to us,” continues Peter. “It is the chance to break into the diesel-electric locomotives market segment and to gain a foothold in new, Spanish-speaking markets. We hope to benefit from the strong position of this new factory in Valencia in the areas of LRV and trams.”
Another market has also been opened up in the United States, where a $100 million order for eight FLIRT units from Fort Worth Transportation Authority in Texas will be the first FLIRT entry in the US and may require Stadler to open up a new factory in the country in accordance with the ‘Buy America Act’. The company has also opened a new office in Australia to take advantage of the Australian government’s ambitions for infrastructure investment, and to establish a footprint in the country as well as the Asia-Pacific region.
“Due to the company’s primary focus on continental European markets, Stadler Rail was greatly impacted by the European economic challenges. Half of the company’s 6000 employees are based in Switzerland, the export ratio is over 50 per cent and consolidation takes place in Swiss francs. All of these factors have resulted in a loss of turnover between CHF 200 million and 300 millions,” outlines Peter, explaining the company’s renewed expansion strategy. “This strategy has quickly proven to be successful with our entry into high-speed rail, underground markets – with a contract for the Berlin Metro – and our entry into the US, Australian and UK markets. Considering these activities the company has essentially achieved its strategic repositioning goals and will be focused on consolidating and continuing this as it moves forward.”