Hitachi, Ltd. is working to strengthen its railway business. Through mergers and acquisitions, the company is expanding railway-related sales as it increases its focus on railway signaling, including railway service management systems.

Hitachi plans to double its railway business sales to ¥2 trillion by fiscal 2030.

Hitachi’s railway business sales for the year ending March expanded to ¥1.194 trillion, an about seven-fold increase from ¥167.4 billion a decade ago.

Giuseppe Marino, CEO of Hitachi’s Railway Systems Business Unit, said the company operates railway business in more than 50 countries and boasts strong performance. Marino said the mobility business is a growing field, and the company will continue to drive innovation.

Growth in Hitachi’s railway business performance is being driven by the strengthening of its railway signal business, including railway operation management systems, as well as control systems to prevent train derailments and collisions.

In May 2024, the company acquired the railway signal business of Thales S.A., a French railway company, for €1.66 billion (about ¥280 billion). This acquisition has strengthened Hitachi’s railway control system business in regions such as North America and Germany, contributing to more than ¥1 trillion in sales.

Hitachi’s railway signal business sales account for 57% of all railway-related sales, exceeding the 43% from its rolling stock business.

The railway signal business also has a higher profit margin than a rolling stock manufacture. Hitachi plans to increase railway-related sales from the railway signal business to 63% by fiscal 2027.

The European Rail Supply Industry Association estimates the global railway market will expand from ¥9.8 trillion in 2023 to ¥12.6 trillion by 2030. Driven by global population growth and the trend toward decarbonization, Hitachi expects this sector to significantly grow.

In September 2024, Hitachi announced that it will deploy a new system in collaboration with U.S. semiconductor giant Nvidia Corp. to realize efficient railway maintenance work. Under the system, sensors and cameras installed on train cars collect large amounts of data, including on vibrations, temperature and track images, which is then analyzed by artificial intelligence to rapidly detect abnormalities. The system has been installed on 8,000 train cars worldwide, including those manufactured by other companies.

Hitachi President Toshiaki Tokunaga said, “We can offer services based on the analysis of data collected from other companies’ train cars,” highlighting the company’s high expectations. Hitachi plans to strengthen the sales of AI-powered train-related maintenance services, too.