Development of the market for material handling equipment
Market volume of material handling equipment in thousands of units
| Region | 2008 | 2007 |
|---|---|---|
| Europe (incl. Turkey) | 374.7 | 410.9 |
| thereof Eastern Europe | 70.9 | 74.3 |
| North America | 159.3 | 191.4 |
| Asia | 259.3 | 266.0 |
| thereof China | 113.4 | 118.3 |
| World | 871.6 | 950.9 |
In view of the progressively cooling world economy in the period under review, the material handling equipment sector lost momentum, experiencing a massive contraction in the fourth quarter of 2008, compared with the same period a year earlier. In consequence, the world market shrank by a total of 8 per cent to 872 thousand forklift trucks in 2008 (prior year: 951 thousand units). The market volume thus significantly lagged the previous year’s estimates, which had projected an expansion of the market to ‘slightly more than 1 million trucks.’ The strongest declines were recorded in North America and Europe. Demand for material handling equipment in Europe dropped by some 9 per cent to 375 thousand units (prior year: 411 thousand units). Although Eastern Europe was unable to emerge from the general downward trend unscathed, its market volume did not decrease as much, shrinking by about 5 per cent. Russia’s development, previously driven by considerable momentum, came to a halt, with the market contracting by approximately 10 per cent. Western Europe’s market volume was down by a total of 9 per cent. The largest drop in demand among key sales markets was experienced by Spain, which saw its market shrink by roughly 30 per cent. North America’s market volume decreased further, declining by about 17 per cent to 159 thousand forklift trucks (prior year: 191 thousand units). By comparison, Asia merely posted a decline of just under 3 per cent to 259 thousand trucks (prior year: 266 thousand units). China, the growth engine which had long led the Asian market, recorded a drop of 4 per cent. Warehousing equipment contributed a below-average 6 per cent to the global market’s reduction in volume, with counterbalanced trucks accounting for about 10 per cent of the contraction. The Jungheinrich Group defended its position on the world market for material handling equipment in an environment significantly characterized by market weakness and competitive pressure.
Focal points and activities
The Jungheinrich Group’s highlights in the 2008 financial year were the construction of a production plant and the company’s appearance at the CeMAT trade fair in Hanover. Furthermore, measures taken to reduce costs in reaction to the consequences of the world economic crisis for the sector in which it is active gained increasing importance.
Jungheinrich expects further market growth over the long term and therefore commenced construction of a manufacturing plant for battery-powered low-platform trucks in Landsberg near Halle (Saxony-Anhalt) in 2008. Conceived as an independent centre of excellence, this factory, which will handle product engineering as well as product management for these trucks, is scheduled to be commissioned by mid-2009. The plant’s initial layout will accommodate a production capacity for over 30,000 trucks.
May 2008 saw Jungheinrich score a great success at CeMAT, the lead international logistics trade show, which regularly takes place every three years. Energy efficiency and drive technology were the points of focus. ‘Concept ’08,’ the engineering design presenting a host of novel ideas, drew special attention. Jungheinrich implemented key future developments and proved its innovative prowess once again. Numerous other product novelties and refinements were also presented, including a new IC engine-powered truck generation featuring a hydrostatic drive train and a new battery-powered counterbalanced truck.
The Jungheinrich direct sales network’s market and service footprint was further enlarged above all in Asia and Eastern Europe, the markets of the future. New technical consultants and after-sales service engineers were hired.
We established our own financial services company in Spain in order to expand our service business, which is of strategic importance on a pan-European basis. Jungheinrich thus has an immediate presence on Europe’s five largest markets, i.e., Germany, France, the UK, Italy and Spain, with in-house financial service expertise to support its sales operations.
Groupwide IT networking using off-the-shelf software progressed again in 2008. At the beginning of the year, the SAP ERP system was upgraded with enhanced character set functionality, enabling the integration of such countries as Russia and China into the Jungheinrich IT network. The next step envisaged is the introduction of this system in the Russian sales company in 2009. Last year, a new system based on uniform processes was introduced to dispatch after-sales service engineers in three countries (Germany, France and the UK). In addition, management decided to introduce a CRM (Customer Relationship Management) system in Germany.
The progressively deteriorating economic scene necessitated an enormous action plan in the second half of the year. For instance, construction work on the new warehousing and system truck manufacturing plant in Degernpoint near Moosburg (Bavaria, Germany) has been postponed for the time being, and production across all factories has been adapted to the decline in demand. The first phase entailed reducing the temporary workforce and work time account balances and renouncing the extension of temporary employment contracts. Moreover, numerous comprehensive cost and structural projects were initiated, designed to achieve additional positive effects in the future.