Forklift Industry News

Forklifts refer to various wheeled handling vehicles that perform loading, unloading, stacking, and short-distance transportation of palletized goods. The International Organization for Standardization (ISO/TC110) calls them industrial vehicles. Forklifts can achieve efficient logistics mechanization operations, reduce the labor intensity of manual handling, and have the characteristics of strong versatility, flexibility, and wide range of activities. They are widely used in logistics and warehousing, electrical machinery, food and beverage, e-commerce, automotive manufacturing, wholesale and retail, petrochemicals, and other industries. Forklifts come in various types. According to the power source, they can be classified into internal combustion forklifts, electric forklifts, and manual forklifts. According to their functions and structures, they can be further classified into pallet forklifts, stacker forklifts, counterbalanced forklifts, reach trucks, order pickers, off-road forklifts, heavy-duty forklifts, and telescopic boom forklifts.

Currently, the mainstream classification method in the forklift industry is to divide forklifts into Classes I-V, namely electric counterbalanced forklifts (Class I), electric rider warehouse forklifts (Class II), electric walkie warehouse forklifts (Class III), solid tire internal combustion counterbalanced forklifts (Class IV), and pneumatic tire internal combustion counterbalanced forklifts (Class V).

The main downstream industries of the forklift industry are logistics and manufacturing. With the promotion and application of logistics technology, the development of forklift attachments, and the technological progress of supporting components, the uses of forklifts have become increasingly diverse. They have evolved from being mainly used in the military field to being widely applicable in various sectors of the national economy, mainly in manufacturing, transportation, warehousing and logistics, wholesale and retail, and other industries. They have now become a multi-series and multi-variety logistics transportation, loading and unloading, and warehousing handling machinery. According to data from the Industrial Vehicle Branch of the China Construction Machinery Association, in 2022, the demand from the manufacturing and logistics industries accounted for 52% and 16% of the total downstream demand for forklifts, respectively.

The forklift industry is highly correlated with the prosperity of the manufacturing industry. Since the main downstream industries are manufacturing and logistics, the forklift industry differs from the general construction machinery industry. The prosperity of the forklift industry is less correlated with the growth rate of real estate and infrastructure investment, but highly correlated with the prosperity of the manufacturing industry. The recovery of the manufacturing industry has driven the continuous increase in forklift demand.

The global forklift market size has been steadily increasing. According to data from the World Industrial Vehicle Statistics Association, global forklift sales increased from 989,000 units in 2013 to 2,006,000 units in 2022, with a compound annual growth rate (CAGR) of 8.2%. Among them, the sales of Class I/II/III/IV&V forklifts increased from 155,000/99,000/281,000/454,000 units to 335,000/140,000/941,000/591,000 units, with CAGRs of 8.9%/3.9%/14.4%/3.0%, respectively.

China leads the world in forklift sales and has the fastest growth rate globally. According to data from the Industrial Vehicle Branch of the China Construction Machinery Association, China's forklift sales increased from 329,000 units in 2013 to 1,174,000 units in 2023, with a CAGR of 13.6%. Since 2009, China's forklift sales have consistently ranked first in the world, and the growth rate of forklift sales in China has also been higher than that of other regions globally from 2013 to 2022.

The global forklift development process can be mainly divided into three stages: The industrial innovation stage (early to mid-20th century): In 1924, Clark in the United States designed a standard forklift named Duat. Subsequently, Hyster, Rudolf, Yale, and Towne, among others, successively invented and produced different types of forklifts such as electric forklifts, straddle forklifts, and BT-type forklifts, rapidly expanding the variety of forklift products. The rapid development stage (mid to late 20th century): During World War II, forklifts significantly improved the loading and unloading efficiency at airports compared to manual operations, thus being widely used during the war. After World War II, with the rapid development of the global automotive industry, forklift technology and sales grew rapidly, and three major forklift production bases gradually formed in the United States, Germany, and Japan. The manufacturing transfer stage (late 20th century - early 21st century): As manufacturing shifted to developing countries, the global forklift manufacturing industry began to transfer to developing countries such as China. The Chinese forklift manufacturing industry rapidly rose and started to capture the international market.

By reviewing the growth rate of domestic forklift sales and the stock prices of leading listed companies, the development of the domestic forklift industry can be roughly divided into the following stages: Domestic substitution dominance (before 2009): During this stage, the domestic forklift industry rapidly rose, with sales growth rates at a relatively high level and a rapid increase in the domestication rate. Macroeconomic policy dominance (2009 - 2015): Affected by the financial crisis, the domestic forklift industry was at the bottom of demand at the beginning of this stage. With the launch of the "Four Trillion Plan", China's economy steadily recovered, driving the continuous development of the forklift industry. Downstream e-commerce and logistics dominance (2015 - 2019): With the rapid development of e-commerce and logistics, the demand for forklifts in the logistics and warehousing industries increased rapidly. Electrification and export trend dominance (2019 to present): As the domestic forklift industry continues to advance in electrification and internationalization, the demand for forklifts has further increased. Unmanned and intelligent trend dominance (long-term): As labor costs gradually rise and artificial intelligence technology is widely applied in the field of robotics, the penetration rate of unmanned and intelligent forklifts is expected to gradually increase in the future.

The "National IV" emission standards increase the manufacturing and procurement costs of forklifts, highlighting the advantages of electric forklifts. To achieve the "dual carbon" goals, the Ministry of Ecology and Environment of the People's Republic of China has issued a series of regulations, including the implementation of the "National IV" emission standards for non-road mobile machinery starting from December 1, 2022. The "National IV" emission standards clearly stipulate that non-road mobile machinery with power ranging from 37 to 560 kW should be equipped with wall-flow particulate matter traps (DPF), and different power segments of non-road mobile machinery adopt different emission control technologies. Compared to "National III" equipment, it is estimated that "National IV" equipment can reduce nitrogen oxide emissions by 13% to 45% and particulate matter emissions by 50% to 94%. At the same time, it requires remote monitoring of the equipment's emission control system. The "National IV" standards impose stricter requirements on forklift manufacturers, weakening the cost advantage of fuel forklifts in procurement. Electric forklifts are expected to further increase their penetration rate by leveraging their environmental friendliness and low operating costs.

Electric forklifts have an absolute advantage in terms of economic efficiency throughout their life cycle. We conducted a full life-cycle economic analysis on both 3-ton internal combustion counterbalance forklifts and electric counterbalance forklifts. When the service life of the forklifts was 1, 3, 5, and 8 years respectively, the cumulative usage cost of electric forklifts was 117%/78%/65%/57% of that of diesel forklifts. The results show that although the purchase cost of electric forklifts is higher, they have an advantage in terms of cumulative usage cost over the entire life cycle.

Both global and domestic sales of electric forklifts have been steadily increasing, with domestic growth outpacing the global rate. From 2013 to 2022, global sales of electric forklifts rose from 535,000 units to 1,416,000 units, with a compound annual growth rate (CAGR) of 11.4%; domestic sales increased from 89,000 units to 675,000 units, with a CAGR of 25.3%. In contrast, the CAGR of global and domestic sales of internal combustion forklifts during the same period was 3.0% and 5.0% respectively. The growth rate of electric forklift sales was significantly higher than that of internal combustion forklifts.

The trend of electric forklifts in China began to accelerate in 2020, mainly due to the introduction of lithium battery technology by leading domestic forklift manufacturers. Before that, domestic forklifts mainly used lead-acid batteries, which have fewer charge-discharge cycles, shorter service life, higher maintenance requirements, greater environmental impact, and longer charging times. Compared with lead-acid batteries, lithium batteries are lighter, smaller in volume, and have higher energy density. Therefore, lithium battery forklifts are more compact and have better overall stability. Additionally, lithium batteries charge faster, have a longer service life, lower maintenance costs, and are environmentally friendly. As a result, lithium battery forklifts are gradually replacing lead-acid battery forklifts. China has a significant advantage in the lithium battery industry chain, and the proportion of lithium battery forklifts in sales has increased rapidly. From 2017 to 2022, the sales of lithium battery forklifts in China rose from 9,000 units to 433,000 units, with a CAGR of 118.5%. The proportion of lithium battery forklifts in the total sales of electric forklifts increased from 4.3% to 64.2%. With the unique advantages of the domestic lithium battery industry chain, the rate of lithium battery forklifts in China has increased rapidly. As lithium battery technology continues to advance, the process of lithium batteries replacing lead-acid batteries will accelerate, and the market prospects for lithium battery forklifts are broad.

A large-scale update of old forklifts is approaching, which will further increase the rate of electric forklifts in China. On March 1, 2024, the State Council's executive meeting approved the "Action Plan for Promoting Large-scale Equipment Updates and Consumer Goods Replacement". The plan proposes to combine the differentiated needs of various equipment updates and replacements, increase policy support in terms of finance and taxation, better leverage the guiding role of energy consumption, emission, and technical standards, and orderly promote equipment updates and renovations in key industries to form a scale effect of updates and replacements. Typically, forklifts have a service life of 8 to 10 years. We can calculate the annual update demand for old forklifts in China using the formula: update demand = 1/3 * [(T-8) year sales + (T-9) year sales + (T-10) year sales]. According to our calculations, the update demand for forklifts in China from 2024 to 2026 will be 352,000/398,000/488,000 units, with year-on-year growth of 4.1%/13.0%/22.6%. We believe that the update demand in China's forklift industry will enter a period of rapid growth in 2025-2026. The replacement of old internal combustion forklifts with electric forklifts is in line with policy guidance and will further increase the rate of electric forklifts in China.

According to our estimates, the export market size of forklifts in China will reach 23.77 billion yuan, 27.86 billion yuan, and 32.42 billion yuan in 2024, 2025, and 2026 respectively, with year-on-year growth rates of 18.8%, 17.2%, and 16.4% respectively. The calculation results show that the export market size of forklifts in China will continue to maintain a high growth trend in the coming years. Therefore, the overseas revenue of leading forklift enterprises in China is expected to maintain a high growth rate.

The increasing labor shortage and rising labor costs are driving the growth in forklift demand. According to the prospectus of UBTECH Robotics, China's working-age population is expected to decline from 990 million in 2020 to 960 million in 2030. According to World Bank data, the labor force participation rate of the population aged 15 and above in China decreased from 70.0% in 2013 to 66.4% in 2023. China may face a certain labor shortage in the future. At the same time, labor costs in China are increasing rapidly. According to data from the National Bureau of Statistics, the average wage of manufacturing employees in China increased from 43,000 yuan in 2013 to 93,000 yuan in 2023, with a compound annual growth rate of 8.0%. As the labor force participation rate gradually declines and labor costs gradually increase, the demand for machines replacing humans is becoming increasingly urgent. The demand for forklifts in manufacturing, logistics, and warehousing industries is expected to continue to rise.

The next stage of forklifts replacing humans is to achieve unmanned and intelligent forklifts. Although the current mainstream ride-on or walk-behind forklifts can greatly improve the efficiency of material handling, they still require manual operation by operators. With the rapid development of artificial intelligence, the Internet of Things, and other technologies, intelligent industrial vehicles with functions such as unmanned driving, remote monitoring, and management have become a new trend in the industry. Unmanned forklifts have higher material handling efficiency and broad application prospects. Forklift mobile robots are equipped with various navigation technologies on forklifts, build map algorithms, and are assisted by obstacle avoidance safety technologies to achieve unmanned operation of forklifts. Compared with traditional forklifts, forklift mobile robots can ensure operation accuracy, efficiency, and safety, assist in achieving unmanned operation of the entire production process, maintain stable operation 24 hours a day, and effectively improve material handling efficiency. Therefore, forklift mobile robots are widely used in repetitive material handling, high-intensity material handling, and harsh working environments, and have broad application prospects.

Traditional forklift manufacturers are expected to leverage their industry technology accumulation and channel advantages to further accelerate the industrialization of forklift mobile robots and actively transform. Currently, many traditional forklift manufacturers have actual application cases of forklift mobile robots. For example, Anhui Heli's AGV overall intelligent logistics solution is applied in the intelligent warehousing system project of Yioo International Logistics Company; Hangcha Group's AGV is deployed in Alibaba Cainiao Logistics to assist in warehouse logistics transportation; Zhongli's X-Mover material handling robot is applied in the transfer center of logistics companies, effectively improving material handling efficiency. In the future, with the continuous breakthroughs in artificial intelligence, the Internet of Things, and robotics, the sales of forklift mobile robots are expected to maintain a high growth rate.