Q1 2015 – Forklift Industry Report

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Unit sales for the global industrial truck market grew by 4.1% in the first quarter. Growth mainly came from Europe and North America while the larger emerging markets such as Brazil and Russia had a negative impact on growth. The industrial truck market in North America by itself grew 8.7% over the first quarter of 2014, jumping from 52.7 thousand units to 57.2 thousand.

The major  forklift manufacturers saw the US economy grow slower than expected and are attributing the slow down to weather.

Highlights from Quarterly Reports

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Image courtesy of Pong at FreeDigitalPhotos.net

Manufacturers Update 

Hyster-Yale Materials Handling (world’s fourth largest forklift manufacturer)

  • As of March 31, 2015, substantially all of the Company’s backlog is expected to be sold within the next twelve months.
  • The Company acquired Nuvera Fuel Cells, Inc. (“Nuvera”). Nuvera is an alternative-power technology company focused on fuel cell stacks and related systems.
  • Significantly increased revenues are expected to start being realized in the fourth quarter of 2015 as Nuvera expects to commercialize certain products that will replace lead-acid batteries
  • Revenues decreased 7.9% mainly due to the impact of the strengthening U.S. dollar and the transition from the old plant to the new plant in Brazil

Jungheinrich (world’s third largest forklift manufacturer)

  • Net sales rose 8% over the first quarter 2015.
  • Incoming orders, in terms of units, posted an increase of 20%.
  • Demand in Asia and China has shifted Jungheinrich’s focus to warehousing equipment and battery powered stackers.
  • Global market volume for warehousing equipment was up 15%
  • Experts expect the global economy to grow by 3.2% in 2015 with the U.S. economy anticipated to expand by 2.8%

KION Group (Linde, STILL, Fenwick – world’s second largest forklift manufacturer)

  • Revenue and order intake rose 7% over the first quarter 2014.
  • Acquired a 10% in Baylo SA, a French robotics specialist to provide more products and services for the growing logistics automation market.
  • Marketing region-specific products that are priced below the premium product is starting to work for KION.
  • Revenue in the Americas grew by 7.2%
  • In April KION made a final offer to purchase Unicarriers, the Japanese manufacturer of TCM and Nissan forklifts.

Toyota Industries (world’s largest forklift manufacturer)

(Fiscal Report 2014-2015)

  • Material handling equipment provided the greatest increase in net sales at 14.3% with an increase of 23,000 units sold
  • Toyota wishes to build upon the success of their material handling equipment by expanding their market share in Japan, North America and Europe.
  • To create demand in these markets, Toyota plans to focus on the development of fuel cell lift trucks which increase environmental and economical efficiency.
  • Projected sales for material handling equipment is an increase of 3.2%(9,000 units) into 2016

Other Industry Updates

Ritchie Bros. Auctioneers – Longbow

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 first quarter 2015 compared to the same period in the prior year. Gross auction proceeds in 1Q15 were over $950 million, which marks the highest first quarter total in company history.
  • Ritchie Bros. noted that the overall age of equipment coming to market is improving and is generating more transactions in the marketplace. In particular, the company stated that late-model (3-5 yrs old) accounted for 25.4% of its GAP in 1Q15 versus 18.5% in 1Q14.
  • There were a total of 8,900 consignors (sellers) of equipment at Ritchie Bros.’ auctions during the first quarter, which was in line with the same period last year.
  • The company had 25,200 unique buyers who purchased equipment through a Ritchie Bros. auction in the first quarter, which is over a 15% increase compared to 1Q14.
  • Ritchie Bros. increased the number of its territory managers (a key driver of equipment volumes) to 308, which is 7.3% higher compared to the end of the first quarter of 2014. This is the highest number that the company has had in its history.

United Rentals – Longbow

United Rentals is the largest equipment rental company in the world and has 888 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 11.9% year-over-year in the first quarter, which was driven by solid volume growth, a 2.9% rental rate improvement, and the positive impact from its National Pump acquisition.
  • United Rentals achieved time utilization of 64.2% in 1Q15 compared to 64.6% in 1Q14. The company still anticipates time utilization of approximately 69% for the full year (68.8% in 2014).
  • The size of the company’s rental fleet was $8.39 billion (based on original equipment cost) at the end of first quarter 2015 compared to $8.44 billion at the end of 2014. The age of the rental fleet was 43.3 months on an OEC-weighted basis at March 31, 2015.
  • The company reduced the top-end of its 2015 total revenue guidance to a range of $6.0 billion to $6.1 billion ($6.0-$6.2B prior), which would result in a 6% to 7% increase versus 2014.

Economic Data

United States GDP

Gross Domestic Product grew by only .02 % for the first quarter of 2015. Compared to a 2.2% growth in the last quarter of 2014, the United States GDP significantly slowed it’s growth. Economists attribute this lower rate to harsh winter conditions, the strengthening of the U.S. Dollar, and the slow down in production as a result of West Coast labor dispute. With these factors accounted for, economists project the U.S. GDP to raise to an approximate 2.8% for the second quarter of 2015.

 

 

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US Industrial Output

At the end of April 2015, total industrial production was 1.9% higher than that of one year ago. Manufacturing production and mining output rose at an annual rate of 2.3% and 1.3% respectively. In terms of the market, construction supplies and business supplies were the major contributors to the increase in production for the first quarter of 2015.

Industry News for the Quarter

  • Kion and Mistubishi Heavy Industries have shown interest in purchasing Unicarriers, the world’s seventh largest forklift manufacturer. Purchasing Unicarriers would significantly help Kion to expand their presence in the Japanese and United States market, markets in which they currently lack strong influence. Reuters News Article 
  • Crown Equipment Corporation recently opened a new Crown LIft Truck sales and service location in Sandston, Virginia. This location will offer access to Crown products, service, and technician / operator training. Crown Press Release
  • Toyota Industries looks to expand their market share of material handling equipment into North America by transforming distributors into subsidiaries. Toyota Industries feels this change, along with the development of fuel cell trucks, will enhance their sales capabilities in the market. Toyota Industry Fiscal Report

Featured Image accredited khunaspix at freedigtalphotos.net