4.2 Strategic points of leverage and projects

The KION Group intends to consolidate its market leadership in Europe, which it has achieved through its strong brands, products based on market-leading technologies and a continually expanding range of services.

The KION Group is a technology and innovation leader and concentrates on further extending its competitive edge. Its products enable customers to become more efficient in terms of consumption, performance and ergonomics. Linde has maintained an outstanding position for the past 50 years, offering economical, efficient and low-maintenance hydrostatic drives. Its Linde Hydraulics business continually pushes ahead with new developments in an important technological field. STILL is strongly placed in the high-potential market for hybrid drives with its drive system that combines a diesel engine with an electric motor – a unique concept in the sector. The company already has the most economical truck in the sector: the RX 70 Hybrid. These two major brands are positioning themselves with dedicated concepts that enable them to benefit from the long-term trend for 'green' logistics, such as fuel cell drive systems and lithium ion technology, as well as for more ergonomic trucks. In 2010, the KION Group ploughed 2.9 per cent of its total revenue – or 5.5 per cent of its revenue from new trucks and hydraulics – into research and development. This substantial proportion puts the KION Group in a leading position in its sector, although there is still potential to expand its technological edge and translate the progress that it has made into efficiency gains for customers.

The KION Group continually aligns the broad range of products and services offered by its brands with customer needs. The portfolio consists of far more than the new truck business - the KION Group offers all the solutions and services that customers require for their internal material flow. This includes delivering customised and fleet-based solutions as well as providing customers with a comprehensive package of highly effective material flow management services and the necessary accompanying IT systems. Accounting for 46 per cent of total revenue in 2010, services make a considerable contribution to the KION Group's product range. With a fleet of over one million trucks in use worldwide, the KION Group has a broad and lucrative platform for its service business, which proved to be more stable than the new truck business during the crisis. It will continue to expand its service offering and further increase service coverage for its active fleet. More than half of the KION Group's 19,968 employees work in service or sales. Service is a key factor in long-term customer retention.

In comparison to its global competitors, the KION Group occupies an outstanding position in all of the high-growth regions, which include in particular the eastern European, South American and Asian markets. The KION Group intends to consolidate this position and take advantage of the potential and the continuing growth of these markets. It has its own production sites in China and Brazil and, thanks to its distribution and service network, is represented in all the important high-growth markets. The KION Group will continue to launch local products that address the specific needs of the different markets and expand its range of region-specific products, at the same time drawing on its brand companies' broad product portfolio. It will also continue to make targeted investments in high-growth regions, expand its distribution and service network and adapt local production capacities to market requirements.

The multi-brand strategy is a fundamental element of the KION Group's overall strategy. As the global number two and the market leader in Europe, the KION Group pursues a multi-brand strategy based on its Linde, Fenwick, STILL, OM and Baoli brands, which enables it to cover and serve a wide range of regions, market segments and customer groups as effectively as possible. Whereas the global premium brands Linde and STILL operate in the market independently of one another, the two regional brands Fenwick and OM focus on their home French and Italian markets respectively, where they are among the market leaders. Baoli, the Chinese brand that has been part of the KION Group since 2009, operates in the economy segment and is pursuing the high-growth market for simpler, robust IC trucks, for which there is also demand in other growth regions besides China. The KION Group's five brands enable it to draw on their different strengths and effectively cover the various markets and segments via all the main distribution channels. The range of brands also enables the KION Group to offer several alternatives to competitors' products and thereby expand its market share. In future, the KION Group will continue to pursue a multi-brand strategy and make targeted acquisitions of other local brands that will enable it to further strengthen its market position. Moreover, the KION Group will further expand its distribution and service network.