Leading Companies that Adopted new Product Launches and Expansion as Growth Strategies in Automated Fare Collection Market

With government initiative in AFC deployment and services, MarketsandMarkets expects the global AFC market size to grow from USD 6.42 Billion in 2016 to USD 11.95 Billion by 2021, at a Compound Annual Growth Rate (CAGR) of 13.2%.

Various vendors in the AFC market are highly focused on mergers and acquisition and partnerships, agreements, collaborations, to meet the demands of its users and achieve growth in the market. The key players in the AFC market are Cubic transportation (San Diego, California), Samsung SDS (Seoul, South Korea), Thales group (La Defense, France), Indra (Alcobendas, Spain), and ST Electronics (Singapore).

The key strategies used by top vendors include new product developments to increase their geographic presence and expand their product portfolio to untapped markets. The players that adopted this strategy are Cubic Corporation, Thales Groups, Samsung SDS, and ST Electronics, among others. In October 2015, Samsung SDS introduced revolutionary solutions using new technologies, such as Cello Plus (model name), which supports SCM and logistics; Cello Square, the open warehouse platform; and SMAC (Social, Mobile, Analytics, Cloud) to expand the efficiency of the manufacturing industry. In June 2015, Thales launched TransCity, a cloud-ready range of evolutionary fare collection solutions, destined for public transport systems. TransCity, a web-oriented technology, simplifies both passengers’ journeys and operators’ day-to-day operations.

Continuous innovation for better product, operational performance with focus on execution with accountability throughout the segments, and strategic investment on mergers are the three of cubic’s strategies for long-term growth.

To strengthen the operation services in the U.S., Cubic signed an agreement with Concord to acquire selected application and operation centers by Vix ERG Pty Ltd., an Australia-based U.S. subsidiary. These assets under agreement allowed Cubic to expand its customer base and services in San Francisco, Boston, Las Vegas, and Ventura. Under this contract, Cubic also acquired fully functional service operations in Concord, which they automated, especially to assist public transport agencies with complete solutions for smart card distribution and call center operations.

Cubic acquired NextBus, Inc. from Webtech Wireless, Inc. to further expand its portfolio and customer-base worldwide. With the acquisition of NextBus, the customer base of Cubic increased tremendously because at the time of the acquisition NextBus’ customers included several metro systems at Washington DC, Toronto, Boston, San Francisco, and Los Angeles; many SMEs; transit agencies; universities; and colleges including RTC-Washoe (Reno), MIT, UCLA, Rutgers University, University of Maryland, Georgia, Saint john Transit, and Chapel Hill Transit, all of which after acquisition were directly transferred to Cubic. NextBus is a Software-as-a-service (SaaS) solution with real-time capability that widens the portfolio of Cubic Transportation Systems in information-based solution for the transit industry.