March 19, 2015 12:00 am JST

Editorial: Japan's railway industry takes on the global market

Momentum is growing worldwide to recognize anew the value of railways. Southeast Asian countries, India and Middle Eastern nations have begun moving to build new commuter railway lines and high-speed interurban railway systems as a trump card for easing traffic congestion and accelerating economic growth.

     Even in the U.S., a famously car-oriented society, plans are afoot to build long-distance high-speed railway systems in many parts of the country amid mounting public concerns about global warming.

     These developments provide ideal opportunities for the Japanese railway industry -- railway operators and rolling stock manufacturers -- to accelerate the global expansion of their business activities based on their long-standing track record of successful operations built mainly at home through enhancing their know-how on railway safety technology and punctuality of rail services.

     Because expanding exports of infrastructure systems is an important challenge for Japan's growth strategy, we will be keeping a close eye on how far Japanese players can go in their sales drive.

     Particularly noteworthy about recent moves by the Japanese railway industry is that railway operators have begun to aggressively move into overseas business. These include East Japan Railway, also known as JR East, and Central Japan Railway, or JR Tokai, both of which have until now been focused on domestic operations.

     JR East is taking part in a project to build a new commuter train line in the northern part of Bangkok, and is also approaching India and other countries to introduce Japan's shinkansen bullet train technology. At JR Tokai, top executives are leading the company's marketing efforts to pitch its magnetically levitated bullet train technology to operators on the East Coast of the U.S.

     Japanese railway equipment makers, such as Hitachi and Kawasaki Heavy Industries, are not only supplying rolling stock. They are also broadening the range of products and services they offer to foreign customers to cover signaling systems for traffic control and maintenance services for railway vehicles as well. If railway operators and equipment suppliers join hands, it may become possible to transplant Japanese proprietary railway systems, which are renowned for their punctual and reliable operations, in their entirety overseas.

Track records

But the Japanese players are just standing at the starting line of a global race. They face competition from European companies with track records of success in many markets and the rise of new rivals, such as Chinese companies, which seek to explore Asian and South American markets.

     To successfully vie with these foreign rivals in global competition, Japan's private and government sectors need to make concerted efforts. For instance, the government could help to spread Japan's railway system technology by introducing it to countries that are planning to build railways. The financial functions of the Japan Bank for International Cooperation and Japanese trading companies can also perform an important role.

     The export of railway infrastructure, which helps to support people's lives and a country's economic activity, is the kind of challenge that tests Japan's overall strength, which covers not only the competitiveness of individual companies but also the country's capability in diplomacy and finance.

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