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Australia’s rolling stock manufacturing sector employs nearly 6,000 people and contributes millions to our economy. But it could be much bigger.
min read
Rail manufacturing involves making and assembling ‘rolling stock’ – locomotives, passenger cars, freight wagons, trams, light rail and their related components and systems. 
We used to manufacture a lot of rolling stock here in Australia. But over the past few decades we’ve relied heavily on imported products. Between 2013 and 2023 we exported about $50 million of rolling stock and components while importing around $1.1 billion worth (IBISWorld 2022). 
The charts below shows where the vehicles in Australia’s light and urban heavy rail fleets have been manufactured over time.
About this data:
Country of origin of Australia’s light rail fleet
Country of origin of Australia’s urban heavy rail fleet
This shift to offshore manufacturing is partly due to tariff reforms and trade liberalisation over the last 40 years, which has seen large multinational companies dominating the rail manufacturing sector (Engineers Australia 2022).
Another reason is ‘vertically separated’ rail operations, where the manager of a rail network sells track access to a private train operator, which sets its own standards. As a result, Australia has many small markets for rolling stock, each with different standards. That makes it hard for local manufacturers to be competitive when they have to meet so many different requirements. 
Despite our recent reliance on imports, we still have the capabilities to manufacture world-class rolling stock and components here in Australia. 
This graphic shows the manufacturing lifecycle of rolling stock, all the way from initial design to decommissioning and recycling. 
The graphic breaks down the 3 stages of the rolling stock manufacturing lifecycle into their parts.
Research and development occurs across every stage of the lifecycle.
Australia’s rail manufacturing industry focuses on 3 main capabilities:
Australia has a well-developed industry for making rolling stock components. We have many small companies manufacturing technically complex components and systems that meet Australia’s high safety standards. 
The components and systems we make in Australia are internationally proven. But in most cases, we need to modify them for Australian conditions and networks. That can make it hard for Australian manufacturers to sell their products to other countries. 
Assembly means putting components together to create rolling stock.
Our rail manufacturing sector is transitioning from a model where one manufacturer handles all aspects of rolling stock production from design to assembly. 
Under this model, specialised small manufacturers can remain viable in the sector by supplying complex components and services to large manufacturers. These larger companies then import less complex prefabricated rolling stock from overseas before assembling and fitting them out in Australia.
Transport networks need their rolling stock to be reliable, long-lasting, affordable to maintain, and fitted with the latest components and technology. 
Australia’s world-leading maintenance and repair sector helps them achieve this with innovative methods like:
Australia can grow these existing capabilities to manufacture more rolling stock and components in Australia, as well as export them to the world.
This will help meet Australia’s growing transport needs, particularly in freight rail. 58% of all freight in Australia in 2021–22 travelled by rail, compared to just 36% in 2000 (BITRE 2023). More businesses are choosing to transport their goods by rail because it is safer, cheaper and more environmentally friendly than road transport. We can take advantage of this boom by manufacturing more freight wagons here in Australia.
The National Rail Procurement and Manufacturing Strategy is the first step in taking our rail manufacturing capabilities to the next level. It outlines how the Australian Government will work with states, territories, industry, unions and other stakeholders to:
IBISWorld (2022), C2393 Railway Equipment Manufacturing and Repair in Australia Industry Report, March 2022, IBISWorld.
BITRE (2023), Trainline 10, May 2023.
Engineers Australia (2022), Future of Rail Transport, 2022.
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