Last month on the 27th, at Sydney Central Station in New South Wales, Australia, a two-story electric train marked ‘Mariyung’ slid into the platform. Manufactured by Hyundai Rotem and launched in December of last year, the NIF (New Intercity Fleet) two-story electric train received final acceptance (FA) from the state government on the 3rd of last month and began full-scale operation. Upon entering the interior, a large wheelchair seating indicator for disabled passengers immediately caught the eye. The seats were arranged in groups of three per row instead of four, and the number of pillars inside the train was minimized, allowing for easy movement even with wheelchairs or bicycles. Greg Killean, 63, a member of the Spinal Cord Disability Association who visited Central Station in a wheelchair, said, “Older electric trains tend to have many pillars inside, but this train has almost none, making movement convenient.” The design stood out for its consideration of mobility-challenged individuals, including low-height interior stairs and dedicated restrooms for disabled passengers.
◇‘Paper Train’ Revised 2,800 Times in Design
The NIF two-story electric train symbolizes Hyundai Rotem’s first foray into the Australian market and its strengthened push for overseas expansion. In June 2016, the company secured a contract for 610 cars worth 1.5 trillion Korean won, completing delivery of all units by June of this year. The train is nicknamed the ‘paper train’ in Australia. A full-scale mock-up was created and presented to 215 meetings with groups including the train drivers’ union, disability associations, guide dog associations, and bicycle associations over 13 months. During this process, thousands of paper documents were generated, with a total of 2,871 design and feedback items incorporated. A Hyundai Rotem official stated, “Following Australia’s local culture, which includes anti-discrimination laws for disabled individuals, the government requested special designs for various stakeholders, including transportation-vulnerable groups, from the bidding stage. This involved exchanging several times more documents compared to other projects.”
Hyundai Rotem’s focus on the demanding Australian market stems from its high profitability. Combined with the 1.2 trillion Korean won QTMP (Queensland Train Manufacturing Program) electric train contract signed with the Queensland Department of Transport and Main Roads in 2023, the company has secured contracts worth 2.7 trillion Korean won in Australia alone—the largest single-country order in its history. The Australian government is expanding railway infrastructure ahead of the 2032 Brisbane Olympics and announced last year a budget plan to invest approximately 28 trillion Korean won in railway infrastructure over the next decade.
◇Technologies Unseen in Low-Cost Domestic Bidding
Hyundai Rotem has ceded market share to smaller domestic companies due to the lowest-bid system in South Korea, leading to a significant decline in profitability in its railway sector. Domestic railway bidding adopts a two-stage process: meeting minimum evaluation criteria in the first stage and selecting the lowest bid in the second stage, even if technical capabilities or on-time delivery guarantees are low. A source from the railway industry said, “The unit price of trains exported to Australia is more than double that of domestic units,” adding, “Vehicles in South Korea must be priced low, making it difficult to apply advanced technologies even if they are developed.”
The trains Hyundai Rotem supplies to Australia incorporate future technologies not found domestically. The QTMP electric trains, scheduled for initial delivery in 2027 after local assembly, will feature an ‘Electric Leveling Control (ELC)’ system, which Hyundai Rotem is applying to electric trains for the first time. The technology allows trains to adjust their height automatically using suspension systems based on information received from each station. A ‘train-platform gap correction device’ will also be installed to automatically fill the space between the train and platform. A Hyundai Rotem official explained, “Australia has aging infrastructure, with varying platform heights and wide gaps between platforms and trains at different stations, so this was implemented for safety.”
◇Transforming the ‘Sore Spot’ of Railway Business
Hyundai Rotem’s two core businesses are railways, focusing on high-speed trains and electric trains, and defense, centered on the K2 tank. Founded in 1977 to manufacture freight trains, it is currently the only company in South Korea capable of producing high-speed trains. While its defense business has been thriving recently, the railway sector has struggled, earning the label of a ‘sore spot.’ In 2023, railway sales were approximately 1.5 trillion Korean won, lagging behind the defense sector (approximately 2.4 trillion Korean won) by around 900 billion Korean won. In the 2010s, railway sales exceeded double those of defense, but this reversed starting in 2023. Operating profit margins have also remained at 1–2% since the 2020s.
However, recent overseas orders, particularly from Australia, have helped improve performance. From the first to third quarters of this year, operating profit increased by 16% compared to the same period last year, reaching 17.7 billion Korean won. The 2016 Australian project has become a ‘model case’ for overseas orders, leading to further contracts. In February, the company set a record for South Korea’s largest-ever overseas railway order (approximately 2.2 trillion Korean won) in Morocco. In 2024, it secured contracts in Los Angeles (approximately 870 billion Korean won), Boston (570 billion Korean won), and Uzbekistan (270 billion Korean won). By the third quarter of this year, Hyundai Rotem’s railway order backlog reached 18.02 trillion Korean won, a 34% increase from the same period last year (13.6563 trillion Korean won).
The company’s ability to surpass global leader China in markets like Australia is attributed to its established trust. Among global railway companies, CRRC Corporation Limited of China ranks first with a 23.4% market share, followed by European and Japanese firms. Hyundai Rotem, South Korea’s largest railway company, is 13th. Kim Jeong-hoon, head of Hyundai Rotem’s Railway Business Division (executive managing director), said, “Chinese companies often submit low initial bids but face delays in delivery and slow resolution of quality issues during project execution,” adding, “Queensland selected us based on trust in on-time delivery, as the project is for the 2032 Summer Olympics.”
