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09

Feb

2016

The Year Ahead – An Industry View

While final sales figures for 2015 are not yet in, it is expected that the fork lift truck market will at least equal the 2014 million-unit level.CESAB Lorry & Trucks

As the industry awaits the final sales figures for the last quarter of 2015, there is some expectation that performance will be soft – although some regions will perform better than others.

Looking forward to the current year global markets are expected to remain roughly stable in 2016, driven primarily by the Western European market, with a moderating Americas market and weakening Asia Pacific market.

Demand in Eastern Europe fell by 12%, while Asia overall dropped 6%, hit mostly by the sharp decline in China.  Liz Richards, executive vice president of the Material Handling Equipment Distributors Association, says members are expecting the US industry to grow in 2016, “although not the record numbers seen in 2014 and 2015”.

FLTA chairman Andrew Woodward says UK dealers also expect sales to grow next year. “Indeed, more than half anticipated more than 15% growth over what was achieved in 2014.  “While we believe most dealers have benefitted from growth in 2015, it was, perhaps, not as much as they hoped for at the outset of the year.  “This is hardly surprising when you review the trends and challenges faced over the last 12 months. We have seen increasing volatility in the global markets following oil price lows, a Chinese economy slow-down, political issues from the Syrian crisis and European tensions with Russia, not forgetting the on going potential exit of Greece from the EU.  “Closer to home, there has been sharp currency movements – particularly during Q1 – leading to increased prices of our exports, uncertainty about the UK’s continuing membership of the EU, the matter of a general election that historically always leads to deferring of decision making within businesses and finally the speculation about the timing of an interest rate increase.    “While the mood of the industry is still optimistic about the year ahead, it’s much more grounded as we recognise that slower, steadier growth is much more likely to result in long-term benefits.”

There’s a similar message from James Clark, secretary-general of BITA: “When we asked our members in September how they see the next 12 months panning out, they were broadly positive, particularly so when asked about their firm’s own sales prospects, with almost 40% thinking sales would rise significantly.  “Almost 90% of respondents expect (forklift) prices to rise modestly as the economic upturn drives forklift demand.  “Our exclusively produced forklift market predictions from our research partners Oxford Economics corroborate this, forecasting overall orders to grow by 5.7% in 2016 and staying at a healthy 5% or thereabouts for the following two years.”

 

The Big Issues

For BITA’s Clark, one of the biggest challenges in 2016 will be environmental. “Emissions – and reducing them – is increasingly a priority for companies across most industries. That is being supported by forklift manufacturers who are producing a new generation of diesel and electric trucks with minimal or zero emissions.

“At the same time, the performance of electric trucks has improved dramatically, leading to some industries that would traditionally have only considered diesel trucks to look at electric as a genuine option for the first time.

service-phone“That is borne out by our survey of members who believe the trend of electric trucks replacing diesel will continue, with one in 10 thinking a ‘significant’ substitution will occur.

“Having said that, there is mounting evidence that competition-induced innovation may become an important driver of market growth. BITA members are re-examining existing products to provide new offerings to customers.”

UK colleague FLTA president Martyn Fletcher also notes “greater interest – and acceptance – of electric alternatives in the UK”, especially in the wake of the recent diesel controversy.

“British businesses are changing the ways they operate, too. Manufacturing is returning – on a regional basis – from the Far East and Eastern Europe and this will drive local industry growth. In particular, we are expecting an increase in sales of warehouse equipment – including articulated trucks.

“And how these trucks will be supplied is changing, too. In recent years, we’ve seen more and more manufacturers take a direct route to market and 2016 will be no exception with independent dealers facing increased competition from them.”

For MHEDA, the big issues in 2016 will include accelerating consolidation of dealerships and OEMs. “Member must have a strategy to deal with this in their market,” says Richards.

The need for skilled technicians in all segments of the industry continues to escalate and necessitates creative recruitment practices, heightened training and more reliance on diagnostic tools and mobile technologies to augment the workforce.

“The economy is healthy but members must maintain vigilance and develop a plan for the next downturn.  “Members must embrace data mining techniques and predictive analytics to increase revenues, cut costs, improve customer relationships, enhance the sales process and reduce risks.  “Government and safety regulations continue to become more stringent and complex.  Members must have a clear understanding of these requirements and recognise both the risks and opportunities.  “Members (also) need to take necessary precautions to protect against cyber threats and the security of data,” she advises.
Olivier Janin, secretary general of the European industry peak body FEM, points out that the integration of Industry 4.0. into materials handling equipment will continue and further develop. “It is already reshaping the industry, its offer and the relationship with customers. It will be interesting to see how our industry will develop further opportunities from Industry 4.0. and translate them into operational efficiencies (increased productivity, better processes, better use of resources, etc.).

“In this respect, I am very much looking forward to seeing the innovations displayed by our manufacturers at upcoming trade exhibitions in 2016 and notably the next CeMAT Hannover show, which has Smart Supply Chain Solutions as its lead theme, and All4pack in Paris.”  CESAB_stand_IMHX_2013

For its part, 2016 will see FEM maintain its focus on the revision of the EU legislation on exhaust emissions.  “(The emissions revision) should come to an end in the first half of 2016 and FEM will be working on a guide to help our industry in the application of the new requirements. Meanwhile, the review of the machinery directive will start. It will be a gigantic work, the first stage of which will last 17 months and impact on pretty much all our product segments.

“At international level, FEM will continue to help develop the World Materials Handling Alliance. We are already very proud to have been able to produce world statistics just one year after the official launch. We now hope to develop the regulatory and standard cooperation to better understand each others’ constraints and requirements. We will also reinforce our communication, whether through a new website (due to go live at the beginning of 2016), our partnership with trade exhibitions and the FEM Congress.”

FLTA chief executive Peter Harvey says: “It’s clear that the year ahead offers excellent opportunities for those dealers equipped and ready to respond to the challenges.

“For more than 40 years, our members have placed customers at the hearts of their businesses. They’ve worked closely with British businesses, making operations smarter, safer and more efficient.

“Our members agree to sign up to a common, defined Code of Practice which governs the ethical and safety standards expected of all companies whose work involves forklift trucks. ”

He notes that his association is working with members to raise standards within the industry, a goal shared by other materials handling associations.

MHEDA’s Richards advises industry participants to familiarise themselves with the industry changes and challenges “and determine the best way to address them”.

“This is an important exercise for any company within the materials handling industry. Getting involved with your industry trade association is vital.”

 

 

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