Market and influencing factors
The material handling market comprises the market for industrial trucks and the market for warehouse automation solutions, including related services in both markets.
In the past, the market was heavily influenced by macroeconomic factors. Economic conditions in the different regions and the rates of growth in global trade have a major effect on customers’ willingness to invest. Regional differences in inflation trends and in the level of interest rates help to shape the market environment as well.
Volatility in the commodity markets and in exchange rates also affects conditions in the market. Increases in procurement prices for commodities and intermediate products and translation effects caused by fluctuations in exchange rates can have a significant impact on the financial performance of individual market participants. Economic trends within individual customer sectors are another influencing factor.
Influencing factors in the Industrial Trucks & Services segment
Historically, new business in the industrial truck market has shown a very strong correlation with the performance of broad economic indicators, such as the volume of global trade, gross domestic product, industrial output, and consumer spending. The service business, meanwhile, is more stable than the product business as it is linked to the installed base of trucks over their entire lifetime.
The KION Group believes that sustainability and electrification are among the main driving factors in the market for industrial trucks and services. Customers are increasingly demanding solutions, primarily in the form of electric trucks, for environmentally friendly supply chains. Consequently, the strongest market growth in the new truck business in recent years, including in the first nine months of 2024 (2019 to September 2024), has been for forklift trucks and warehouse trucks powered by an electric drive (World Industrial Truck Statistics, January 2025). Alongside the growth in electric forklift trucks, much of the additional volume in the market for new industrial trucks is attributable to the electrification of hand pallet trucks, which are being replaced by entry-level electric trucks in the lower weight categories.
In the KION Group’s view, demand for counterbalance trucks with an electric drive and for warehouse facilities is also receiving a boost from stricter emissions standards, the range of new energy solutions available, and customers’ efforts to be more sustainable by using lithium-ion batteries and fuel cells.
Furthermore, the increasing automation of production and warehousing processing against the backdrop of a steadily growing shortage of skilled workers combined with rising wage costs is pushing up demand for automated industrial trucks with an electric drive, including in the form of hybrid solutions that combine automated and manual solutions.
The industrial truck market is also benefiting from customers’ growing requirements regarding quality and efficiency and from higher expectations in terms of service, availability of spare parts, and flexible rental solutions. This includes optimization of the total cost of ownership and the ability to integrate the trucks into fully automated intralogistics solutions. The degree of automation is determined by the customer’s processes.
Competitive pressure remains high around the world as some manufacturers in the economy and volume segments based in China have been pursuing an international expansion strategy for a number of years now. The large number of industrial trucks already in use in the market also provides a strong base for replacement business and rising demand for services.
Influencing factors in the Supply Chain Solutions segment
According to the KION Group’s estimates and backed by data from research institute Interact Analysis (Interact Analysis, November 2024), the market for warehouse automation solutions generated growth (measured in terms of revenue) in recent years (2019 to 2024) owing to increasing demand in the main customer industries. These primarily included general merchandise, durable goods, grocery retail, and the food and beverage industry. Both the project business (business solutions) and downstream services (customer services) have contributed to this expansion. The service business benefits from the growing number and the rising complexity of installed systems.
According to Interact Analysis, the significant customer sectors for the warehouse automation solutions market are general merchandise and grocery retail, manufacturing, food and beverage manufacturing, parcel delivery services, and pure e-commerce (Interact Analysis, November 2024).
Projects involving warehouse automation solutions take a long time, often extending over several years. The service business is generally more stable than the project business as it is linked to the installed base of systems over their entire lifetime.
The growth of e-commerce in recent years has had a major influence on demand for warehouse automation solutions. Global online trade (B2C) has expanded at an average rate of 12 percent per annum in recent years (2019 to 2024) according to research institute eMarketer (eMarketer, June 2024). The KION Group believes that customers’ desire for ever-faster delivery times coupled with the growing shortage of skilled workers has made companies more willing to invest in warehouse automation solutions and their digitalization (Forbes, October 2023).
The combination of smaller order volumes and large numbers of orders requires efficient and automated solutions. This is driving demand for decentralized and smaller warehouse and logistics facilities in urban areas that speed up delivery times and, due to automated processes, reduces personnel expenses and floor space costs. Consequently, the research institute Interact Analysis is predicting above-average growth of the market for micro-fulfillment automation in the years ahead (Interact Analysis, August 2024). At the same time, the focus of technological progress is increasingly shifting toward software and robotics solutions. Interact Analysis anticipates that this will lead to disproportionately strong growth in the market for AMRs and AGVs (Interact Analysis, October 2024).