Market and influencing factors

Industrial trucks are deployed for a wide variety of applications. Material handling products are used for tasks such as loading and unloading, linking production steps and moving pallets in logistics centres or in retail / wholesale operations. They therefore form part of the production processes and supply chains of many different industries around the world.

Measured in terms of unit sales of new trucks, the growth of the market for industrial trucks has exceeded global economic growth over the past ten years (2004 – 2014), rising at an average of 4.5 per cent per year. However, it should be noted that these statistics do not include price effects or the contribution from the service business.

The main growth driver across all regions is the advancing interconnectivity of the global economy, which requires additional transport services between what are becoming increasingly fragmented value chains and supply chains. The specialisation of companies and the growth of internet-based commerce are also making logistics processes more segmented and more complex.

In regional terms, emerging markets – particularly China, eastern Europe, Central America and South America – are the major source of market growth. Demand for logistics services on the back of increasing consumer spending is being fuelled by expansion of industrial and public infrastructure as well as rising living standards.

The lower (economy) and middle (volume) price segments are growing at an above-average rate thanks to demand from emerging markets, where inexpensive industrial trucks are particularly popular. Simple counterbalance trucks with an internal combustion engine (diesel trucks) make up a comparatively high proportion of the total volume in these markets. Above-average growth opportunities are presented by eco-friendly, reliable diesel trucks on the one hand and, on the other, counterbalance trucks with an electric motor (electric forklift trucks) and warehouse technology.

In mature markets, where supply chains are highly sophisticated, the large number of trucks in use provides a strong base for replacement business. A survey conducted by Peerless Research Group found that the majority of trucks are replaced within ten years. The KION Group estimates that around 90 per cent of sales in western Europe are currently accounted for by replacement investments. In highly developed economies, electric forklift trucks and warehouse technology, as well as diesel trucks in the premium price segment, make up the bulk of market volume.

Measured in terms of units ordered, around 44 per cent of the global market was attributable to diesel trucks in 2014, while electric forklift trucks accounted for around 17 per cent and warehouse technology for 39 per cent. According to the KION Group’s estimates, the premium price segment and the economy price segment each accounted for between 25 and 30 per cent of units ordered. The remainder is accounted for by the volume price segment, making it the largest in terms of units sold.

Economic conditions in the different regions and the rates of growth in global trade are key influencing factors for the KION Group. Its financial situation is also affected by competition levels, exchange rates and changes in commodity prices.

The products and services of companies in the KION Group also have to comply with specific legal requirements in their respective markets. Compliance with the different requirements has to be verified or certified. Many of the legal requirements are enshrined in product-specific and other standards (e.g. EN, ISO and DIN).

The tightening of emissions standards is not only taking place in developed markets, it is also increasingly observable in emerging markets such as China. This trend benefits the KION Group with its high-tech products.

Legal requirements also apply to the construction and operation of production facilities, including in relation to air pollution avoidance, noise reduction, waste production & disposal and health & safety. Furthermore, the KION Group fulfils all of the legal requirements pertaining to exports and financing business.