FIF Delegate-General Jean-Pierre Audoux confirms that the sector is effectively searching for a second wind as it eyes a comeback to the golden age experienced by French railway manufacturing sector during the second half of the last decade. With this in mind, the Association advocates deployment of dynamic measures  aimed at helping the industry firm-up its third position in the world ranking by 2020.

France ranks third worldwide as a railway industrial power. What are its strong and weak points?

As things now stand, in the context of a world railway manufacturing market worth some € 130 billion and posting an average growth rate of 5% annually, France ranks third on the world stage behind China and Germany, with a € 5.1 billion turnover including 25% generated through exports. Our country plays host to the leading European players in the field, and over the years it has also successfully expanded its product portfolio in most market segments including tramways and driverless metro systems. These in particular are the very sectors where it has demonstrated its ability to innovate by developing for example a ground power-supply system for tramways.  Equally important of course is the continued strong political backing accorded the sector for the past several years. With a  21 000-strong workforce, it ranks alongside the aerospace and automotive sectors as an industry with growth potential. Yet despite achieving a status never enjoyed previously, the  French railway industrial sector nevertheless continues to be hamstrung by the size of its equipment manufacturing companies. Unlike Germany where companies of all sizes band together to "hunt in packs", we suffer from a chronic dearth of intermediate-size enterprises (ETI) and equipment manufacturers robust enough to compete internationally, penalised as they are by a lack of sufficient capital. We also lag behind when it comes to accessing information sharable in real-time between the different companies concerned - from manufacturer to sub-contractor - during project implementation phase. Lastly we simply must do better in terms of delivery-time compliance whilst at the same time ensuring full equipment reliability before commissioning into revenue service.

Is the French railway industrial sector not over-reliant on its domestic market?

Yes, this industry has become increasingly reliant on home orders over the past few years, and  indeed its share of the international market has shrunk 10 points since 2000. The reasons for this state of affairs are varied : in particular, we  have had to cope with massive deliveries of regional and urban trainsets to domestic customers. That said, SNCF and the Regions - between mid-2009 and 2010 - slowed-down the pace of their rolling-stock renewal programmes and this had a massive and immediate impact on "grade 3 and 4" equipment manufacturers challenged by the sudden fallout from this investment decision and by growing competitive pressures applied by "emerging" countries led by China. Manufacturers have also had to cave-in to the insistence  of emerging countries - already with their own railway industrial sector -  on equipment ordered by them being produced locally.

What are the short and medium-term prospects and are we heading for a 2012-type stagnation?

For the first time in many years the French railway industrial sector will report lower turnover results for 2013. This decline, explained largely by troughs in rolling-stock deliveries, looks like being quite steep even if it potentially remains single-digit percentage-wise.  France is unquestionably searching for a second wind on the home market. New orders are yet to materialise while internationally we have lost market share to rivals like China who were not even present on the export scene a mere decade ago.  Just for the record China today exports  € 6 billion worth of railway equipment as against € 1.5 billion by France. That said, deliveries will pick-up once more in 2014 and 2016 before tapering-off again the following year if options taken on TER and Transilien trainsets are not exercised. On top of this, more years will have elapsed before we can expect orders being placed for trainsets to operate on the future Greater Paris network. These sets, deliverable as from 2019/2010, will strongly impact on the workload of the railway industrial sector, and should actually translate into some 6000 jobs for anything up to ten years.

Do track-sector industries have cause for optimism?

Observed short-term trends differ quite appreciably as between HSL projects and those concerned with rehabilitation of the conventional rail network. On the one hand, the four ongoing HSL projects will all have been completed by 2016/2017. On the other, the conventional network rehabilitation programme will continue, actually gathering momentum over time . The sector should profit by the decisions made in this respect, with SNCF and RFF raising their network-rehabilitation investments from € 1.9 billion to € 2.5 billion during the 2013-2020 period.  On the down side, margins have reduced over the past few years due to increasing competition from Spanish, Italian and Austrian operators bidding for track upgrading contracts. The policy of competitive tendering is thus proving to be  a daunting challenge for French companies.

What will the French railway industrial  sector resemble in 2020?

In April 2012 we submitted to the Industry Minister a  draft final report compiled by the "Ambition 2020" Committee. This document lists twenty-four project proposals for securing the future of our sector, the aim being to prepare the ground for France to consolidate its third rank worldwide behind China and Germany but ahead of Russia. By that date, sector exports from France - amounting to €  3 billion - will match its home market turnover, so enabling the rail industry to improve the country's foreign trade balance by some € 1.5 billion.

Aside from the extra 2 to 3000 jobs generated by that date, this plan ultimately  aims to facilitate sector consolidation through the launch of a new top-performing Intermediate-Size Enterprise (ISE)  on world markets in addition to the development of five or six pertinent clusters (skills pools) with clear remits supplemented by a string of super-efficient SMEs.

interviewer: Olivier Constant