by Locomotives form the backbone of freight and passenger transportation through railways. Locomotives are capital-intensive assets that require significant investments for procurement. Additionally, the operational and maintenance costs of owning locomotives can be substantial. Locomotive leasing provides rail operators with operational flexibility through pay-per-use operational models without requiring large capital investments. Leasing locomotives helps businesses optimize their cash flows. Given the high procurement and operational costs associated with locomotives, leasing them proves beneficial for many rail operators. The global locomotive leasing market allows businesses to leverage the latest technology and offload ownership risks.
The global Locomotive leasing Market is estimated to be valued at US$ 10.07 Bn in 2023 and is expected to exhibit a CAGR of 8.0% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
One of the key trends in the locomotive leasing market has been the increasing preference of rail operators for renting or leasing locomotives rather than purchasing them. Leasing offers several advantages such as lower upfront capital commitment, flexibility to choose from the latest models, and tax benefits for the lessee. It also allows rail operators to avoid risks associated with technological obsolescence and disposal of older locomotives. Furthermore, leasing models provide rail operators pay-per-use operational costs, thereby improving their cash flows. This rising adoption of operational leasing over ownership models is expected to drive the growth of the locomotive leasing market over the forecast period.
Porter’s Analysis
Threat of new entrants: The threat of new entrants in the locomotive leasing market is moderate. Significant investment and regulatory hurdles exist for new companies seeking to enter the market.
Bargaining power of buyers: The bargaining power of buyers is moderate-to-high. Large railway operators have considerable negotiating power with locomotive lessors.
Bargaining power of suppliers: The bargaining power of suppliers is moderate. Locomotive manufacturers operate in an oligopolistic market structure with a few large global players controlling majority of the market.
Threat of new substitutes: The threat of new substitutes is low. Locomotive leasing is an irreplaceable solution for rail operators seeking flexibility with equipment procurement and deployment.
Competitive rivalry: The competitive rivalry in the market is high given presence of numerous global and regional lessors competing for contracts from railway operators.
Key Takeaways
The global Locomotive Leasing Market Growth is expected to witness high growth over the forecast period. Asia Pacific region currently dominates the market with majority share. China holds the largest fleet of leased locomotives globally on account of rapid expansion of rail freight operations in the country.
Regional analysis:
Asia Pacific is expected to remain the fastest growing as well as largest market for locomotive leasing during the forecast period. Countries such as China and India are witnessing significant investments toward expansion and upgrading of existing rail infrastructure which is driving the demand for leased locomotives. Rapid growth of freight transportation via rail is positively impacting the market.
Key players:
Key players operating in the locomotive leasing market are GATX Corporation, Progress Rail (A Caterpillar Company), TrinityRail, Mitsui Rail Capital LLC, Angel Trains, Beacon Rail Leasing, Railpool, Eversholt Rail Group, Macquarie Group, SMBC Rail Services, VTG Rail Leasing, Mitsui & Co., Ltd., Touax Rail Ltd., CIT Group Inc., The Andersons Rail Group
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
