Jean-Pierre AUDOUX, French Railway Industry Association (FIF)
Release Date: 2009-12-08
Jean-Pierre Audoux, General Manager of the French Railway Industry Association, was interviewed by GreenTechFocus to talk about the ambitions and the achievements of the French public transport and, namely, of the railway industry, as well as about its active position in working for a greener world and readiness to develop cooperation with the Chinese market.What is the importance of the current massive Chinese rail development for the French railway industry?
China is considered as a very crucial market for the future of the railway industry based in France. It is very clear that if, in some market segments the Chinese products represent a very major share of the output and the need for foreign suppliers is not very high in some other segments, there is the need of joint ventures or imports. As most of the French, German or European managers in railway companies witness, success stories depend on a case-by-case analysis of the segment of the market.
According to assessment of the Minister of Foreign Affairs of the People Republic of China, the priority, in the context of the economic recovery plan, was to favor Chinese production and - where there is no possibility to produce goods in the country by Chinese companies – they would have to purchase foreign products. This is an official statement, and I think that it has to be taken into account as globally, according to estimations, 25 to 33% of the Chinese market is open, making it the biggest in the world. It means that before the recovery plan, the Chinese market for railway products was 8 bln Euros out of 30-32 bln Euros which is a lot. So, it is difficult to have precise assessment of the open market share for foreign companies in the context of the present recovery plan for 2009-2010.
What are the ambitions of the French companies? Which subsectors are going to take advantage?
In reality, in FIF’s board, the majority of the members are subsidiaries of European companies. The main shareholder is not necessarily based in France. For that reason, I would rather speak about European companies based in France and exporting French technologies rather than French railway companies.
The open market for such companies for the moment is, first of all urban and regional transport. Secondly, there are signaling systems and, thirdly, high speed “systems”. We expect to have a dramatic increase for orders of metros as there are many cities with over 1 million inhabitants in China with huge needs for efficient mass-transit systems..
How would you define the level of competitiveness in the Chinese market of the French based railway companies?
There is fierce competition on most of the markets where French-based companies have skills and capacity to be successful. As the Chinese market is the most important market in rail products in the world, all global companies are competing with each other to win contracts, so in many fields the high technological level is not sufficient to win the contracts. Moreover, China has specific requirements for production of local content (70%) and a limited share of foreign companies (49%). Nevertheless, many French-based companies are already doing a lot of business in China and represent success stories in China in signal systems, in rail infrastructure products, etc.
What is your view on the fact that if China is indeed looking for French technology in the development of its railway systems, the very same technology transfer risks to undermine the leadership of the French-based companies?
The most international contracts in China in the railway sector are based on the condition of technology transfer. The question is whether or not technology transfer is the right strategy for us. It is a case-by-case approach among our members. What matters is to keep the technological advantage. If you have special accurate skills in a given technology and your customer from Europe or China or from any other area wants to work with you and wants the technology, you’re not obliged to agree just because he’s a customer or a potential customer: If you want to keep on being the leader, you must make sure to preserve your leadership for innovation and to keep this advantage on a mid-term basis.
Of course, there is no global statement in France against technology transfer to China. I know companies that transfer technologies to China and others that do business without transferring technology. So you have to make case-by-case assessments and calculations of the costs, benefits and the risks of transferring technology.
France was the first country in the world to calculate the global carbon trail of a new railway line. Is that a sign that in the future environmental criteria will be taken into account in the development of new railway lines?
In France, RFF and SNCF decided to integrate those calculations in the assessment of the future projects. It means that it will be the criterion to decide on ROI of our projects. It’s a very important shift in the right direction – integrating the environmental aspects and factors in the criteria for investment on a given project. It’s a very positive and a lasting implementing process. So, I’m quite certain that these criteria would be involved in the next contracts and tenders.
I think that ten years from now those environmental criteria will be taken into account in the contracts in most world markets. In Germany and UK those aspects, apart from CO2 and greenhouse gas and emissions and energy consumption, will be increasingly taken into account. It’s a heavy trend and I can’t imagine that only France – five or ten years from now - would be the only country to do that.
Railways are acknowledged today as the most ecological mean of transport. What is the incentive for the suppliers to actually go even greener?
Simply that if you do not improve yourself and your business just because you’re the best, you’ll lose. Every day you have to think about your competitors and check what they’re doing. Today, and more than ever, the biggest competitor is the automotive industry which is every day becoming greener and greener, which is witnessed by overadvertising in all newspapers about reducing consumption, electric motors, and car manufacturers saying they will follow the same path and will compete to show they’re even greener than green. If we give for granted that naturally railways are much greener and not take into account what is happening, railways will be dead tomorrow.
What would be your personal message to your potential partners in China?
My message is that the French-based companies are fully aware of the crucial importance of the railway market in China and really committed to be on this market and make the best offers to their Chinese customers. Globally, all of them are committed to China’s future but they will, logically, need to make case-by-case assessment of the advantages and risks for each project. That’s fair for companies in the whole world and not only for the French companies.
| Company: | French Railway Industry Association (FIF) |
| Position: | General Manager |
| Country: | France |