Market evolution: Railway parts (CN 8607) — 2015–2025

Introduction

This report examines the trade dynamics of EU trade in Parts of railway or tramway locomotives or rolling stock, n.e.s. (CN 8607) over the 2015–2025 period. The heading encompasses a wide range of components — from driving bogies and air brakes to axles, wheels, and coupling devices — that underpin the operation of railway and tramway rolling stock across Europe. Despite a substantial domestic production base that grew from €3.34 billion to €9.17 billion over the decade, the EU's external trade in these parts underwent a striking transformation: exports expanded modestly while imports more than doubled, progressively eroding a historically comfortable trade surplus. The following sections unpack the key forces behind this evolution.

1. Diverging Trajectories: A Robust Export Base Confronts an Import Surge

1.1 EU exports grew in value but stagnated in volume

Over the 2015–2025 period, EU extra-EU exports of CN 8607 parts rose from €2.21 billion to €2.42 billion, an increase of 9.5%. However, export volumes remained essentially flat — 253,242 tonnes in 2015 versus 253,187 tonnes in 2025 — indicating that the entire value increase was driven by price appreciation. The average export unit value climbed from €8,723/t to €9,551/t over the period.

This pattern suggests that the EU railway-parts industry was unable to expand its physical footprint in global markets, relying instead on pricing power — a dynamic that may reflect a shift toward higher-value, more specialised components in the export basket.

1.2 Imports more than doubled, driven by both volume and price

In sharp contrast, extra-EU imports of CN 8607 surged from €635 million to €1.40 billion (+119.8%) between 2015 and 2025. Import volumes nearly doubled from 107,839 tonnes to 195,321 tonnes (+81.1%), while import unit values rose from €5,890/t to €7,148/t (+21.4%). The combination of volume expansion and price increases signals a structural increase in demand for imported parts, not merely a cost effect.

1.3 The trade surplus narrowed substantially

As a result of these diverging paths, the EU's trade balance in railway parts contracted from €1.57 billion in 2015 to €1.02 billion in 2025, a decline of 35.1%. The surplus hit its lowest point around 2020–2021 at approximately €865 million, before partially recovering. The net import reliance metric, which was at −28.5% in 2015 (signifying a strong net-exporter position), moved to −9.8% by 2025 — a 65.8% reduction in the EU's net-export advantage. The EU remains a net exporter, but the margin has thinned considerably.

2. Shifting Geographies: New Supplier Dynamics and a Changing Partner Landscape

2.1 China emerged as the dominant import source — and a declining export market

The most consequential partner-level shift occurred in EU–China trade. EU imports from China skyrocketed by 305.2%, rising from €116 million to €471 million — making China by far the EU's largest single supplier of railway parts by 2025, accounting for roughly one-third of all imports. Simultaneously, EU exports to China fell by 49.1%, from €717 million to €365 million. China thus shifted from being the EU's top export destination to becoming its largest import source, a dramatic reversal that reflects both China's rapid build-out of domestic railway-parts manufacturing capacity and the maturation of its own high-speed rail ecosystem.

2.2 Türkiye, Serbia, and Ukraine became rapidly growing import suppliers

Beyond China, several other partner countries saw extraordinary import growth:

Türkiye and Serbia stand out: both grew more than fivefold. This likely reflects their integration into European rail supply chains, aided by geographic proximity, lower labour costs, and — in Serbia's case — an EU candidacy status that facilitates trade alignment. Switzerland remained the third-largest supplier but was essentially flat in value terms, while imports from the United Kingdom edged down slightly, possibly reflecting post-Brexit friction. Notably, imports from the Russian Federation collapsed by 80.9% (from €22.1 million to €4.2 million), consistent with the imposition of trade sanctions following the 2022 invasion of Ukraine.

2.3 EU export destinations diversified, with strong growth in Western markets

On the export side, the EU's top destination shifted from China to a more diversified portfolio. The United Kingdom grew by 61.9% (€244M → €395M), Switzerland by 61.4% (€239M → €385M), and the United States by 58.9% (€145M → €230M). Serbia also surged as an export market (+622.3%, from €12M to €85M), suggesting a two-way deepening of the EU–Serbia rail supply chain relationship. India grew more modestly (+18.8%), while South Africa was largely stable.

2.4 Within the EU, Germany remained dominant but Spain and Poland gained ground

Looking at EU member states, Germany was the leading exporter (€670M in 2025) and importer (€424M), though its exports declined by 24.5% while imports rose by 34.1%. Spain emerged as a major exporter, growing 156.2% to €508 million — making it the second-largest EU exporter by 2025. On the import side, Poland (+666.5%, reaching €131M), Spain (+332.9%, €127M), and Austria (+248.8%, €87M) all saw dramatic increases, reflecting the expansion of rail manufacturing and assembly activity in Central and Southern Europe.

3. Structural Shifts: Specialisation, Production Growth, and Evolving Vulnerabilities

3.1 EU railway-parts production expanded massively

Over the period, the value of EU domestic production of CN 8607 grew from €3.34 billion to €9.17 billion — a 174.4% increase. This is a striking figure, indicating that the EU railway-parts industry has been buoyed by sustained investment in rail infrastructure, fleet renewal, and the green-mobility transition across the continent. Yet the simultaneous surge in imports implies that this production growth was not sufficient to satisfy all domestic demand, and that the EU increasingly relied on external suppliers to fill the gap.

3.2 Trade concentration declined, signalling market diversification

The Herfindahl-Hirschman Index (HHI) for imports by value fell from 2,115 to 1,813 (−14.3%), while the export HHI dropped more sharply from 1,426 to 946 (−33.6%). Both the import and export sides thus became less concentrated, meaning that the EU diversified its supplier base and its customer base over the decade. For imports, this diversification partly reflects the emergence of Türkiye and Serbia alongside China; for exports, it reflects the reduced share of China and the growing importance of the UK, Switzerland, and the US.

3.3 Central and Eastern European countries displayed the strongest export specialisation

The revealed comparative advantage analysis for 2025 highlights a clear Central European specialisation cluster:

Austria, Czechia, and Poland together accounted for nearly 45% of EU extra-EU exports in this product category. These countries have deep historical roots in railway manufacturing and have benefited from integration into European rolling-stock supply chains. By contrast, large economies like the Netherlands (RSCA −0.88) and Belgium (RSCA −0.93) showed no specialisation in this product, consistent with their economies being oriented toward other sectors.

3.4 Export concentration and supply shocks revealed geopolitical vulnerabilities

The volatility analysis flagged several noteworthy shocks. On the import side, Türkiye exhibited a price shock in 2019 with a 50.9% unit-value increase (abnormality score: 37.7), which may reflect a shift in the product mix or a quality upgrading in Turkish exports. On the export side, EU exports to India experienced a price shock in 2020 (+47.2%), potentially linked to pandemic-related supply disruptions and cost increases. Most dramatically, EU exports to the Russian Federation collapsed in 2025, falling by 96.8% — a supply shock almost certainly tied to escalating sanctions. The Russian market, once worth €22 million in imports and a non-trivial export destination, has been largely severed from EU trade flows.

3.5 The EU's export propensity declined, suggesting a more domestically oriented industry

The export propensity — exports as a share of domestic production — fell from 31.9% to 23.1% (−27.6%), even as trade intensity (total trade as a share of production plus imports) declined from 37.9% to 32.7% (−13.9%). This indicates that the massive expansion of domestic production — driven by Europe's rail investment cycle — absorbed a growing share of output internally, leaving a smaller fraction available for export. The EU's railway-parts industry is becoming more domestically oriented, even as it simultaneously becomes more dependent on imported components to meet its needs.

Conclusion

The EU's trade in railway parts (CN 8607) between 2015 and 2025 tells a story of an industry in transformation. Exports remained resilient in value terms but failed to grow in volume, relying on price increases to maintain their position. Meanwhile, imports surged — more than doubling in value — propelled by the rise of China as a dominant supplier and the rapid emergence of Türkiye and Serbia as new sources. The EU's trade surplus, while still positive, shrank by over a third. Against this backdrop, EU domestic production nearly tripled, reflecting massive investment in rail infrastructure and rolling stock. However, this production boom has not been sufficient to offset import demand, pointing to structural capacity gaps or cost-driven outsourcing in certain component categories.

Looking ahead, the key risks lie in concentration: China alone accounts for roughly a third of EU imports, and geopolitical developments — as demonstrated by the collapse of EU–Russia trade — can rapidly reshape supply chains. At the same time, the EU's export base has diversified geographically, and Central European economies have cemented their role as the bloc's railway-parts export engine. The challenge for EU policymakers and industry will be to sustain production growth while managing growing import dependence and navigating an increasingly complex geopolitical landscape.