Mergers reshape forklift business around the world
The plan to add Nissan Forklift to the brands of Hyster and Yale underscores trend to fewer, bigger players.
By Staff -- Modern Materials Handling, 7/1/1999
Worldwide and within North America, mergers are reshaping the industrial truck business--thinning the ranks and creating new market leaders. Plans to merge Nissan Forklift into the NACCO Industries' unit that owns Hyster and Yale underscore these trends. NACCO Materials Handling Group (NMHG) signed an agreement in mid-May to buy the global Nissan forklift operations from Nissan Motor Co., Ltd., Japan. Estimated cost when the transaction is completed sometime before year's end: $300 million.With the Hyster and Yale brands, and, in Japan, the Sumitomo-Yale brand reportedly accounting for roughly two-thirds of total NACCO revenues in 1998, or about $1.68 billion worldwide, Nissan world forklift sales would swell that figure to $2.2 billion.
With a river of red ink running out of Nissan Motor--net losses for two years in double-digit billion yen amounts, and a third year of losses forecasted already by the Japanese firm--the timing apparently was ripe for this purchase.
NMHG already owns and operates the Hyster and Yale brands as separate, independent entities. But top executives for the two brands are based out of the firm's new headquarters location in Greenville, N.C. NMHG has said it will maintain the Nissan brand, product line, and dealer network in addition to the existing two brands.
Lacking from press statements and information given the news media, however, is a clear indication of what happens to the Barrett brand of forklifts. At its U.S. headquarters and factory in Marengo, Ill., Nissan and Barrett trucks are built side by side. NMHG vice president Geoffrey Lewis told MMH that no decision had been reached on the Barrett brand.
World's largest forklift firm. Combining the Hyster, Nissan, and Yale forklift brands together in one corporation creates an operation akin to what General Motors has been in autos for years: world's largest.
NHMG says that in 1998 Nissan and NHMG "produced over 100,000 units on a combined basis." That figure may be conservative. Information from other industry sources puts combined production closer to 115,000 or more units in what was a good year in the U.S. and Europe, less so in Japan and elsewhere in Asia/Pacific.
Even at the 100,000 unit annual level, it clearly appears this combined production would make NMHG the world leader, knocking Linde out of first place and pushing Toyota down to third place.
In February 1999, Linde reported that its 1998 sales of industrial trucks rose last year to 86,000. Linde also estimated the world market total for sales of all brands at 550,000 units in 1998.
On this kind of rough market projection, the Hyster-Yale-Nissan combination would have had slightly more than a 18% share of the world's trade in industrial trucks last year (see chart) with Linde's share at more than 15%.
Domestic market dominance? Within the domestic market the combination would be big too. NACCO chairman, president, and chief executive Alfred Rankin told the Wall Street Journal recently that Hyster and Yale alone hold a 29% share of the U.S. market. How much Nissan contributes to enlarging that U.S. share of sales remains to be determined.
Strong in Asia. NMHG's Ecklund primarily has positioned the merger as one significantly strengthening the company's Japanese market position and adding a strong sales network and customer base in Asia-Pacific.
Adding Nissan's solid presence in Asia should also help NMHG in another way, as well: This summer NHMG's new plant in Pudong Shanghai, China is due to begin manufacturing Hyster models of diesel lift trucks primarily for sale in the Chinese market.
Prior mergers help set pattern. Blazing a trail before NMHG were other mergers, of course. Swedish-owned BT Industries purchased Raymond, headquartered in Greene, N.Y., in 1997. This merger brought the Raymond, Dockstocker, and Prime-Mover brands in North America all under one roof, figuratively speaking.
With this move, BT also laid claim to becoming the world leader in warehouse, or electric trucks. But in many end user markets the numbers of electrics still trail internal combustion powered trucks in units sold. So, from a global perspective, BT--without a line of IC trucks--ranks a half dozen or more places behind the Hyster-Yale-Nissan combination and Linde.
Clark Material Handling, meanwhile, in stepwise purchases, has acquired both the Blue Giant (U.S. and Canada) and Samsung (South Korea) brands since late 1997. With Clark sales running around $500 million last year through to 1997--Clark clearly is recovering lost ground. But it's still far from regaining the dominant, top of the U.S. market spot it held in the 1980s.
Much like Hyster and Yale, the Mitsubishi and Caterpillar brands are independent. But they are run in North America from Mitsubishi Caterpillar Forklift America Inc. headquarters in Houston, Texas.
Market watchers previously have ranked--in terms of world sales--the Mitsubishi-Caterpillar combination behind Linde, Toyota, and NHMG (Hyster-Yale without Nissan included). Crown Equipment, with world sales in 1997 at $856 million, according to Forbes, is among the half dozen or so top global players, as is Jungheinrich.
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