Tom Andel

China—fast boat to the U.S?
February 6, 2008

I saw a news release the other day that Volvo Rents appointed Heli Americas as its North American preferred vendor for industrial forklift products. This agreement with the agent for Anhui Heli, the leading provider of forklifts in China displaces two other brands with deeper roots in U.S. soil, transplanted though they might have been. I normally wouldn’t pay much attention to an announcement like this, but after giving it a second read, the reason for Volvo’s switch popped out at me:

“The user friendly maintenance and operational design … are important features in a product that is rented to numerous customers over long periods of time,” the release stated.

Why would a company buy lift trucks and do their own maintenance in an era when leasing is so easy, as is the maintenance that comes with it?

“A lot of the rental yards do their own maintenance,” Bruce Pelynio told me. He’s president and CEO of Heli Americas, which distributes and supports Heli forklifts in the States. “They want a lift truck they can work on themselves without needing a degree from MIT in computer science. They also want something designed to last 15 years. We have 20-30 percent heavier materials, we use roller bearings in the mast, and our radiators are all copper and steel vs aluminum and plastic.”

So it looks like Chinese OEMs like Heli see opportunity in the KISS approach to marketing and design: Keep it Simple (let’s eliminate the last “S” for savings—I ain’t Stupid). They’re apparently having some success. Bruce told me Heli made 37,000 trucks in China last year. Heli Americas is repowering trucks for the U.S. market to meet EPA and CARB compliance. It is also expanding the Heli line here to meet the U.S. demand for LPG product. It plans to introduce an 8,000 to 10,000 pound truck later this year to compete with the meaty portion of the lines offered by U.S.-based OEMs.

This kind of choice is great for forklift buyers, but I’m sure there are those who would decry the possibility of more manufacturing jobs going overseas. Pelynio told me Heli is going after a certain niche in the U.S.—those who want basic meat and potatoes machines, like Volvo Rents.

What do you think? Are Chinese OEMs going to have as dramatic an impact on the U.S. lift truck market as the Japanese and Koreans have over the last 20 years? Maybe they’ll have enough business to keep them busy as their own markets develop, but I’d love to hear what you think!

Posted by Tom Andel on February 6, 2008 | Comments (0)