Talgo has set up the company Motion Rail to break into the high-speed and long distance rail market when Spain’s rail transport sector is liberalised and opens up to competition in Europe. This is expected to happen end-2020. With this initiative, the train manufacturer will become a competitor for state-owned Renfe, from which it won the “macro contract” to supply new generation AVE trains in November last year. So Talgo is taking a further step to diversify its business, after it recently started to manufacture commuter and regional trains. It has joined the list of firms, which includes train manufacturer CAF, waiting for this market to open up.
The next step for Talgo’s new subsidiary will be to request the railway operator licence it needs from the Public Works Ministry. It will then become one of the companies waiting for the liberalisation of the rail transport market, which the previous government was already working on. But the current government has decided that it would be better to delay this until 2020, coinciding with the liberalisation throughout Europe. The afore-mentioned companies include construction firms (ACS, Ferrovial, Acciona and Comsa) and bus transport companies (Alsa and Avanza). Grupo Planeta was also interested at one point.
In opinion of Bankinter’s analysts when it gets the licence, Talgo will become one of the list of companies with approval from Adif to operate in the rail passenger and goods transport market.
The list is relatively long (CAF, Alsa, Avanza, Interbus, Acciona, Ferrovial, etc), so the competition with Renfe will be high. In any event, the sector’s liberalisation is an opportunity for Talgo and opens up a new business line, apart from the manufacturing and maintenance of trains (19% and 76% of 2015 sales respectively).
