Forklift Industry Report – Q3 2015

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Industry Overview and Economic Data

Order intake for industrial trucks dropped like a stone in Eastern Europe, Central and South America, and in Asia, excluding Japan. North America and Western Europe saw the only increases compared to the third quarter last year, and are really the only regions with increased industrial truck orders through 2015 thus far.

According to Jungheinrich, the overall global market for material handling equipment shrank by 3% in the quarter, and has expanded by 1% through the first 9 months of 2015.

Global industrial truck market (order intake) – courtesy of KION Group

Global Industrial Truck Order Intake

 

Currently, the Bureau of Economic Analysis has 3rd quarter GDP growth at 1.5% while GDP grew by 3.9% in the second quarter. The rising dollar certainly has something to do with the GDP slow down since exports were down during the quarter.  And construction of oil rigs, and all of the equipment having to do with getting oil out of the ground and into refineries slowed down as well.

Total US industrial production rose at an annual rate of 1.8% in the third quarter, while manufacturing output increased 2.5%.  The Federal Reserve attributes a large part of the increase to motor vehicles and parts.

Excerpts from Manufacturers’ Quarterly Reports


Toyota Material Handling (Toyota Industries FY 2016 2nd Quarter – Aprl thru September 2015)

  • Net sales of material handling equipment increased by 15%, mainly due to increased sales in Europe and North America.
  • Profit for the materials handling segment was up roughly 40%.

KION Group (Linde, STILL, Fenwick)

  • Revenue was up 8.6% over the 3rd quarter 2014, and up 8.4% for the first nine months of the year over 2014.
  • Order intake rose 9.5% in the first nine months of 2015, mainly due to a rise in sales of warehouse trucks.
  • Revenue in the Linde Material Handling segment was up 13.5% worldwide.

Jungheinrich

  • Third quarter incoming orders were up 9% year on year.
  • So far this year Jungheinrich has manufactured 10% more machines than in 2014.
  • Net sales up 10% through September.
  • Net sales outside of Europe grew 23% mainly from rising sales in China and North America.

Hyster-Yale

  • Revenues decreased 6.3% to $652.1 million from $695.8 million in the third quarter 2014. Attributed to the strong US dollar.
  • Total shipments increased in the Americas.  Lower cost machines led to lower revenues although unit volume was higher.
  • Unit volume in Europe also improved but the US dollar was a drag on total revenue.
  • Sales to Asia-Pacific were down slightly due primarily to negative currency effects and lower shipments to China.
  • Total lift truck shipments are up in the first nine months of 2015 compared to 2014.

Kalmar Cargotec

Kalmar Cargotec manufacturers a full line of high capacity lift trucks, cargo handling equipment, and yard spotter trucks.

  • Orders increased 9 percent.
  • Sales grew 10 percent.
  • Order book grew by 1% from 2014 year-end.
  • CEO stated container handling and truck-related load handling businesses remained strong in the third quarter.

Ritchie Bros. (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 core auction sales are all unreserved, which means that each item sells for the highest bid with no minimum price reserves.

  • The company’s gross auction proceeds (GAP) increased 1% in the third quarter 2015 compared to the same period in the prior year (+9% on a constant currency basis). Gross auction proceeds in 3Q15 were $895 million, which marks the highest third quarter total in company history.
  • Ritchie Bros. sold 85,000 lots during the quarter compared to 73,000 lots in the prior year period, which represents 16% volume growth. The increase was driven in part by a 37% increase from the heavy-construction sector.
  • The company 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 23.7% of its GAP year-to-date through October versus 18.5% in the same time period during 2014.
  • There were a total of 10,950 consignors (sellers) of equipment at Ritchie Bros.’ auctions during the third quarter, which was 4% higher than the same period last year.
  • The company had 26,650 unique buyers who purchased equipment through a Ritchie Bros. auction in the third quarter, which is a 10% increase compared to 3Q14.

 

United Rentals – (Courtesy of Longbow Research)

United Rentals is the largest equipment rental company in the world and has 900 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 overall rental revenue increased only 0.8% year-over-year in the third quarter. However, the company’s rental rates decreased 0.1% versus the prior year, which is the first decline in rates on a year-over-year basis since 2010.
  • The company achieved time utilization of 70.0% in 3Q15 compared to 71.5% in 3Q14. Excluding the branches with the most exposure to upstream oil & gas, utilization would have been 70.9%.
  • The size of the company’s rental fleet was $8.95 billion (based on original equipment cost) at the end of third quarter 2015 compared to $8.44 billion at the end of 2014. The age of the rental fleet was 41.9 months on an OEC-weighted basis at September 30th, 2015.
  • United Rentals still believes that the rental industry will experience multiple years of growth driven by non-residential construction and industrial market recoveries in North America along with the secular shift to renting equipment versus owning.

Other Industry News

  • KION Group, the world’s second largest manufacturer of forklifts introduced the Baoli brand of forklifts in the US during the third quarter.  Baoli forklifts are manufactured in China and serve the economy segment.  Linde dealers in the US will have the opportunity to sell Baoli forklifts to their customers.
  • Gregory Poole, a Cat dirt dealer in Virginia, North Carolina, and South Carolina has dropped the Cat, Mitsubishi, Jungheinrich, and Crown lines of forklifts in favor of Hyster and Yale. This is a major change in that part of the country and creates a large dealer consolidation for Hyster-Yale in that region, and a fragmentation for Mitsubishi-Cat-Jungheinrich.
  • With Gregory Poole switching to Hyster-Yale, MCFA had to find new partners in the region to cover territory.  So far, Eaheart has been handed the Cat, Mitsubishi, and Jungheinrich territory in over 100 counties in Virginia.

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