2014 Year In Review – Forklift Industry

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New Forklift Sales Highest Ever

Liftrucks had another solid year in 2014 with global demand for industrial trucks growing by 7.8% in 2014 to 1.1 million units, a new record level. Electric forklifts saw the largest worldwide percentage gains, growing by 13.3% last year, while sales for internal combustion trucks grew by 3.5%.

Western Europe accounted for the largest increase, growing by 11.5% over 2013, North America grew by 9.2% and Asia (excl. Japan) grew by 9.3%. Central and South America saw a significant decline of 7.3%.

Revenues were up among the world’s four largest forklift manufacturers: Toyota Material Handling, KION Group, Jungheinrich, and Hyster-Yale.  But the expectation for 2015 is more muted growth throughout the world.

 

Total-Shipments-2014

US GDP – Don’t Call it a Comeback, It’s Been Here For Years

The US economy had a good year as well, growing 2.4% last year.  The fourth quarter saw GDP rise at an annual rate of 2.2%.

The main story for the US economy over the last several months has been falling oil prices and the rising dollar. It’s somewhat generally agreed that falling oil prices will have a net positive effect on the US economy, however the oil industry and oil service companies have been reducing headcount and drilling rigs to keep up with shrinking margins.

The rising US dollar has led to a downturn in exports which can drastically affect manufacturers who ship products overseas. See the New York Time’s article about manufacturers having trouble with the rising dollar: As Dollar Heats Up Overseas, US Manufacturers Feel a Chill.

US GP

Manufacturing Data

Total manufacturing employment in the US grew about 1.64% in 2014 to 12,301,000 employees.  And total US industrial production grew as well. You can see in the chart below that lift truck shipments in North America and US industrial production have caught up to and surpassed pre-recession levels.

Industrial Production and Forklift ShipmentsSteel Production

Steel production was up by 1.4% in the US over 2013, and worldwide steel production was generally up.  China continues to be off the charts (a literal example below) and India had a great year as well.

US steel production peaked at 7753 thousand tonnes in August, steadily dropped to 7210 thousand tonnes by December, and tumbled to 6261 thousand tonnes in February 2015. Much of the drop is likely attributable to  fall in oil prices and new oil rig construction.  See this news story for one example: US Steel laying off thousands.

Crude-Production-All Crude-Production-ex-China

 

Automobile Production

Automobile and commercial vehicle production was up for the world’s four largest auto manufacturers.  The big story continues to be China who saw 7.26% growth during 2014. The US saw healthy growth of 5.57%, steadily bringing production back to pre-recession levels.

Auto Production

Highlights from Lift Truck Manufacturers’, and Other Related Companies’, Annual Reports

Hyster-Yale

  • Total revenues grew to $2.767 billion in 2014 from $2.666 billion in 2013.
  • Net income attributable to stockholders fell slightly in 2014 to $109.8 million from $110.0 million in 2013.
  • 55% of lift truck sales were internal combustion engine units
  • 28% of lift truck sales were electric units
  • Breakdown of retail shipments by end market
    • 27% – manufacturing
    • 14% – wholesale distribution
    • 13% – food and beverage
    • 11% – home centers and retail market
    • 10% – rental market
    • 10% – freight and logistics market
    • 6% – paper market
  • HY expects growth rates for the global lift truck market to decelerate in 2015. Growth in the Americas is expected to be relatively flat.
  • HY does expect to increase unit shipments, parts volume, and market share through is strategic initiatives, however.
  • HY believes the fuel cell market for lift trucks has significant growth opportunities – HY purchased Nuvera Fuell Cells in December 2014.

KION Group

  • Revenue rose in 2014 to 4.678 billion euros from 4.494 billion euros in 2013. Represents 14.2% of global market share.
  • Order intake rose 8.5% over 2013.
  • KION’s strategic focus on growing sales in North America is paying off. Overall North American industrial truck market grew by 9%, and KION North America grew order intake in North America by 23%.
  • Linde and STILL, KION’s premium brands, are going to consolidate their presence in North America. It appears Baoli will be represented in North America as the lower end option.

Jungheinrich (annual report not published as of 3/27/15)

  • Sales rose 9% to 2.498 billion euros
  • Production surpassed pre-crisis level for the first time and was at an all-time high in Jungheinrich history.
  • Corporate strategic focus is on China, selling more IC trucks, doing more with logistics systems, and focusing on the core business in Europe.

Toyota Industries – Toyota Material Handling (April 1, 2014 – December 31, 2014) – limited information available

  • Net sales of the material handling segment grew by 14%

Ritchie Bros. Auctioneers – courtesy of Longbow Research

Ritchie Bros. is the largest industrial equipment auctioneer in the world and operates through 44 permanent and regional auction sites worldwide. The company holds 4-5 auctions per year on average at each of its permanent auction sites and its auctions are all unreserved which mean that each item sells for the highest bid with no minimum price reserves.

  • The company’s gross auction proceeds (GAP) increased 12% in the fourth quarter 2014 compared to the same period in the prior year. Gross auction proceeds in 4Q14 were over $1.2 billion, which marks the highest quarterly total in company history.
  • There were a total of 13,150 consignors (sellers) of equipment at Ritchie Bros.’ auctions during the fourth quarter compared to 12,200 in the same period last year.
  • The company had 35,800 unique buyers who purchased equipment through a Ritchie Bros. auction in the fourth quarter, which is over an 18% increase compared to 4Q13.
  • Ritchie Bros. increased the number of its territory managers (a key driver of equipment volumes) by 12.9% in 2014.
  • Ritchie Bros. expects overall GAP to increase mid-single-digits on an organic basis in 2015. GAP performance is off to a strong start in 2015 and increased 13% in the month of February on a year-over-year basis (no auctions conducted in January).

United Rentals – courtesy of Longbow Research

United Rentals is the largest equipment rental company in the world and has 881 locations across North America. The company generates 55% of its total sales from industrial/non-construction markets, 41% from non-residential construction, and 4% from residential.

  • United Rentals reported that its rental revenue increased 16.5% year-over-year in the fourth quarter, which was driven by strong volume growth and a 4.1% rental rate improvement.
  • United Rentals achieved time utilization of 70.6% in 4Q14 compared to 69.3% in 4Q13.
  • The size of the company’s rental fleet was $8.44 billion (based on original equipment cost) at the end of fourth quarter 2014 compared to $7.73 billion at the end of 2013.
  • The company provided initial 2015 total revenue guidance in the range of $6.0 billion to $6.2 billion, which would result in a 6% to 9% increase versus 2014.
  • The company expects rental rates to increase 3.5% in 2015 (+4.5% in 2014) and anticipates time utilization of approximately 69% for the full year (68.8% in 2014).

Notable Forklift Industry News for 2014

  • Mitsubishi moved up one spot in the world’s forklift rankings to 7, which moved Unicarriers back to 8th.
  • Hyster-Yale purchased Nuvera Fuel Cells in December 2014. Nuvera is a development-stage company that has been working on fuel cells stacks and related systems. Hyster-Yale intends to use Nuvera’s technology to outfit their lift trucks with hydrogen fuel cells.
  • Crown Equipment purchased JH Ryder, Canada’s largest Crown dealership. JH Ryder will now operate as Ryder Material Handling.
  • KION North America named Vincent Halma as its new president. This is part of the company’s strategy to become a major market player in North America.
  • Toyota Industries Global Commercial Finance established on November 2014. At the same time Toyota Industries Commercial Finance, a wholly owned US subsidiary was established to strengthen industrial vehicle operations and expand sales finance operations of materials handling equipment in the US and worldwide. Operations are planned to begin in April 2015.  Headquarters will be in Torrance, CA.  The company will be capitalized with $400 million.