Q. Last year BITA statistics showed a record year in the number of new truck sales. As the FLT market is usually reported as a barometer for the UK economy, do you believe this reflects a strong economy?
Rise before the fall! The so-called strong economy may well be caused by the very heavy Government expenditure and recruitment of staff over the last 3 years. Whilst the target objectives have not been achieved, it is certain money has found its way into the high street and “on line” expenditure.
On the other hand, we are facing reduced North Sea Oil recovery and reduced true value added industry. Also, there are restrictions on new industries for ethical and other reasons, which, in effect are handing our technical leadership to other countries on a plate. Therefore, it is unrealistic to assume that the growth of service industries can be maintained without commensurate increase in the wealth creation by value added industries. The early general election may well be in anticipation of a downturn in the second half of 2005.
Coupled with the adverse balance of payments the 2004 record of lift trucks is more likely to reflect an economic bubble on the wane, rather than a strong and stable economy. Incidentally, January orders do not look too good!
Q. New forklift trucks, particularly counterbalance IC trucks, have been coming down in price for a number of years now. Do you believe this trend can continue for much longer?
The real costs and prices of lift trucks, in harmony with many other medium technology volume products – including IBM P.C’s will continue to fall until the vast Asian market stabilises, and satisfies itself, including India and China. Most major Western lift truck manufacturers have plants in China, which will help to limit their decline at home. The underlying problem is that the new efficient industries in large growth economies like China will win battles against European and American competitors because China for example has an undeveloped market with a population 3 times the size of the enlarged European Union.
Tragically, the small producers will be suffocated unless they can find a niche for specialist products. However, the EU encircled by an iron fence against dumping will stagnate world trade, affecting European exports most of all.
Q. You have been involved in the sourcing and supplying of trucks from the Far East for a number of years, firstly with the Samsung product, now known as Clark, and more latterly your range of Samuk trucks from China. How would you rate these latest trucks in your stable?
Unlike the Indians who may prefer to book flights for BA or book-keep for PWC, the Chinese enjoy making things incl IBM PC’s, BMW’s, Passat’s and Jeeps to international standards. They will tell you that the quality is paramount and remind you they are the 3rd country to put a man into space albeit 25 years later – so what? We did it!
And so with lift trucks. The designs are based on new models at exhibitions , so are around 5 years behind the Western leaders. But the quality and components are about the same. If in doubt they buy European controllers and Japanese engines. For these reasons, the trucks are popular, reliable and economic.
Hangzhou – who make the third generation of Samuk trucks to our defined European specification – were extremely lucky in that they made Nissan trucks for about 10 years and were processing a joint venture when Mitsubishi collaborated with Nissan. This left Hangzhou free to develop yet another new range, full aware of the latest Nissan designs involving computer aided design and manufacture as well as quality and test procedures. So, they have leapfrogged their competitors to become one of the two biggest in China making lift trucks. Now, Hangzhou are less than 3 years behind the Western leaders. The trucks are rated as heavy duty, reliable and are a pleasure to drive aimed at 80% of the popular market.
Q. As I reported in the first edition of MHW – ‘China Syndrome – Materials Handling In Meltdown’, an anti-dumping levy was likely to be applied to importers of Chinese built hand pallet trucks. This has subsequently come to pass, do you think your new trucks will become subject to the same knee-jerk reaction from your European competitors?
No! I don’t think that the anti-dumping levy will be applied to powered products. Otherwise, where does it stop? Of the 10 or more other countries producing low cost hand pallet trucks, India is probably the cheapest. Are we going to lock them out as well? How would India and China react to anti free trade action by the EU anti world trade iron fence? The States and EU already fight like children over farm subsidies. It does not work.
As a matter of interest, why do the majors want to make non-profit wheelbarrows and hand pallet trucks? If serious, why not buy a Chinese factory? Incidentally, the levy is limited to hand pallet trucks because most of the majors make or buy powered ones from Asia. Bad luck if the viper turns and B.I.T.A is bitten! Who gains if Chinese airlines have to pay 140% for an A380 but only 100% for an enlarged 747?
Q. If you had a crystal ball what do you think will be the next big thing in the forklift industry?
It could be a carbon copy of the car industry with fewer bigger manufacturers and the small ones fall aside – except for the niche market. If I had 3 bets they would be on:
Mitsubishi who have collaborated cleverly with Nissan and make many of their trucks now pay attention to their investment in Rocla, which would give them a good range spread well geographically and assuring them of a place in the top 5 makers worldwide.
Hyster Yale who had a very serious look at Nissan but did not like the due diligence – must feel restless! Remember Hyster used to brand Yale for Jungheinrich but fell apart for personal reasons. The fact remains that Jungheinrich don’t love counterbalance trucks but they can show Hyster how to make and sell warehouse equipment. As well as compatible products, the geographical spread is second to none.
My third bet for a top ten company goes to China where there are 30 or 40 manufacturers – surprisingly, mostly small. So I choose 1 of the 2 biggest with ample funding and an ambitious, young management. Zhejiang Hangcha who make Hangzhou products. A very impressive and aggressive new product programme with a Nissan background located South of Shanghai surrounded by up-to-date component makers.
I have to back the third, because I have to put my money where my mouth is!