Around 530 forklift trucks were sold 2013 per million people in western Europe. In India it was just a handful – but that’s about to change. Through the Voltas brand company, the KION Group has made early inroads on the subcontinent, just as it did in China. India is ready and so is Anup Ramachandra Kurup.
Anup’s masterpiece weighs a good four tonnes. It’s painted yellow and grey, has a muscular appearance and is as good as impossible to knock over. The EVX 30 Max is the new forklift truck from Voltas Material Handling (VMH), the KION Group’s Indian brand company. “We took just four months to develop it,” says Anup Ramachandra Kurup, a senior engineer at VMH at the age of just thirty-two.
Anyone who visits Anup will quickly realise that big changes are under way here in the Indian city of Pune. The engineer and his colleagues are operating from a bare-looking office on the second floor, right above the production hall. Some 200 people here make around 2,000 forklift trucks a year. The factory is bursting at the seams. “We have big plans for VMH,” says Sunil K Gupta, head of what is still only the second biggest manufacturer of forklift trucks in India. “Our goal is clear: we want to be number one in this growth market.”
Anup and his colleagues work tirelessly to achieve this, often working above and beyond the call of duty. “Just before a product launch, it’s not unknown for us to pull an all-nighter,” says Anup. “But I don’t mind, because since we’ve really been working flat out, everything has been much more fun.”
“Delighted that the KION Group is on board”
Anup is well placed to compare the old times with the new. The man from the southern state of Kerala has been at VMH since 2008. At that time VMH was still based in the economic hub of Mumbai and was part of the vast Tata Group. No one in India’s biggest industrial conglomerate was paying proper attention to the relatively small forklift truck business, however. “When it was sold to the KION Group in 2011, we were over the moon. We’re now proud to be part of a globally operating group that is focused entirely on forklift trucks.”
»Our aim is to develop and manufacture world-class trucks here in India.«
Anup Ramachandra Kurup
Highly committed: Anup was named “ employee of the year” for his development of a truck
Riding high in Pune: “Since we’ve really been working flat out, everything has been much more fun.”
Precision work: fine-tuning successful technology
Things moved very quickly: in summer 2012 VMH moved to the industrial city of Pune, where, as a stop-gap solution, it is leasing production halls. But Indians are well versed in improvisation and he and his colleagues are comfortable dealing with their temporary surroundings. His colleagues have even built themselves a small test track in the yard, complete with weights for the trucks to lift and inclines.
Synergies help to save huge amounts of time
The rate at which products are developed in Pune shows how dramatic the changes have been: “Previously we needed one year to design a new truck. We’ve since got it down to under four months.” It helps enormously that the developers are now able to draw on a whole raft of modules thanks to the takeover by the KION Group: “For the EVX 30 Max we used transmissions and axles from our sister brand Baoli in China. That saved a huge amount of time.”
To drive forward development, Anup constantly flits between his office with its large computer and the ‘proto shop’. Down here the prototypes designed by the engineers are constructed and put through their paces. There’s a strong smell of oil, spanners clang against metal and only the humming of the trucks’ engines drowns out the thud of hammers – a paradise for the engineer. At the edge of this workshop for new developments, which is out of bounds to visitors, stands the DVX 30 KAT. Another of Anup’s favourites: “It took half a year for our team to develop that truck,” he says. “Before starting, even we didn’t believe we could get a machine like that up and running in such a short space of time. But we managed it.” With the newly developed EVX 20 Max and EVX 30 Max, he and his team was even faster. What our young engineer doesn’t say: that he was named ‘employee of the year’ for this achievement.
Attractive market with growth profile above GDP.
The KION Group operates in an attractive market that is growing faster than global economic output.
The worldwide market for industrial trucks grew at roughly 1.4 times the rate of the global economy between 1980 and 2013. Industry experts reckon that this pace is set to accelerate slightly over the period up to 2017.
This scenario is being driven by three global mega-trends:
- the industrialisation of the emerging markets,
- the advancing globalisation of world trade and, as a consequence, the increasing transportation of goods around the world,
- the growing fragmentation of supply chains and value chains: just-in-time logistics and purchases from online retailers create demand for the KION Group’s products and services.
A global leader– strong home base ...
Measured in terms of new trucks sold, the KION Group is currently number one in the European market and number two in the market worldwide. And with a presence in more than 100 countries, the company is the world’s biggest specialist provider of materials handling trucks and associated services.
Our strong position in western Europe, where we have a market share of 35 per cent (2013), is the basis for the global expansion of the KION Group. The foundation of our business is stable in this region because of replacement purchases and a strong service business.
After plunging into a deep crisis, Europe’s market for industrial trucks is now recovering. Since 2010 the KION Group has benefited from this trend with a double-digit percentage increase in revenue in Germany and the rest of Europe.
... and well positioned in growth markets.
The KION Group’s leading position in emerging markets such as India, China, South America and eastern Europe means that it is excellently placed to fully exploit the growth opportunities available there. In 2013 the KION Group’s brand companies sold 35 per cent of their new trucks in emerging markets – and this proportion is set to rise sharply.
A case in point is China, which is the world’s largest individual market for the KION Group’s products. The Company has been firmly established here with its offering of development, production and services for more than two decades and is the leading non-domestic supplier. The KION Group is the third-largest player in this market, where it employs some 3,200 people. China is now the Company’s second-biggest market in terms of unit sales (behind only Germany).
Technology leadership drives premium positioning ...
The KION Group is right in the vanguard when it comes to technology and innovation. By spending in excess of €114 million on research and development in 2013, the Company is a leader in its sector.
Over 900 people work at ten research centres in Europe, Asia and the Americas to devise forward-looking solutions; more than a quarter of them are based in China so that they are close to their market. This continuous R&D investment means that clients in all markets and segments can expect to have a fully customised range of trucks and services to choose from.
In 2013 the KION Group launched more than a dozen new trucks and truck families in the market, thereby providing added impetus for 2014, and a number of new products and services are set to be introduced this year as well.
... and customer value.
Customers of the KION Group particularly benefit from the industrial trucks’ good handling capacity and very low running costs throughout their lifecycle.
The cost benefits for customers mean that the KION Group can set prices at a level that enables it to achieve higher margins than its competitors. After all, personnel expenses and the cost of operating a truck over its lifecycle constitute a significant portion of the purchase price, especially in highly developed markets.
The proximity of the KION Group’s brand companies to their customers also ensures a high level of availability for the trucks. Around the world, around 12,900 inhouse and external service engineers work for the KION Group. This business offers considerable potential also outside of Europe: in China, revenue from services has risen substantially in recent years.
Robust integrated business model with high contribution from services.
This provides the basis for the KION Group’s lasting business success. Customer services, truck rentals, used trucks and spare parts together contribute more than 40 per cent of revenue. This business is very resilient to fluctuations in the economic cycle. Moreover, it generates particularly good margins for the KION Group.
There are around 1.2 million KION trucks in use around the globe, forming a broad basis for a strong and integrated service business.
A comprehensive network of more than 1,200 sales and/or service outlets worldwide ensures that the KION Group is never far from its customers. This creates strong customer loyalty, which in turn offers more potential for growth and provides a lasting competitive advantage.
Strong profitability – well prepared for future value creation.
Constantly improving efficiency and profitability is a clear objective for the KION Group. Size and synergies – a combination that makes the KION Group stand head and shoulders above other truck manufacturers.
This involves collaborating on research and development, improving plant structures and fully exploiting the economies of scale created by a worldwide production network. Other areas of focus are the optimal use of shared, cross-brand modules and platforms and the ongoing expansion of the service business.
Highly motivated and qualified employees with proven track record.
International, highly qualified and highly motivated: the KION Group’s more than 22,000 employees, who demonstrate dedication and creativity day in, day out, are both the heart and the backbone of the company.
Their hard work underpins the operational success of the company and ensures a strong financial performance. This was one of the key elements in the successful stock market flotation of the KION Group in June 2013.
The company’s growth strategy is reflected in the structure of the workforce. In 2013, the Group recruited extra staff for its service and sales operations and notably invested in new employees in the emerging markets and growth regions. The KION Group is increasingly hiring local management in all its markets in order to utilise their strong market knowledge and expertise.