The Development and Trends of China's Forklift Parts Market-1
With the rapid growth of the forklift industry, the demand for forklift parts has also expanded significantly. This indicates that the forklift parts market has immense potential in the future, presenting both challenges and opportunities. To succeed, businesses must follow market trends and keep pace with industry developments. So, what are the future trends in the forklift parts market?
1. Rapid Growth of the Forklift Industry
Since 2001, China’s forklift industry has been experiencing rapid growth. Except for the impact of the 2008 financial crisis, the annual sales volume of forklifts in China has increased by over 20% almost every year. By the end of 2015, the total number of forklifts in use exceeded 2 million, with an annual increase of over 200,000 units expected in the coming years.
During this expansion, the non-standardized nature of forklift parts has driven the need for more suppliers. As forklift manufacturers expand their production capacity, the demand for components has led to the rapid growth of the forklift parts industry, with an increasing number of suppliers and enhanced production capabilities.
2. Analysis of Business Models in the Forklift Parts Industry
Companies in the forklift parts sector can generally be categorized into manufacturers and distributors. To better understand their roles in the industry, we can classify them into five main business models:
(1) Leading Domestic Enterprises
China’s booming forklift industry has driven the rapid development of domestic parts manufacturers. After decades of expansion, these companies have established a mature industry with significant profits and reinvestment cycles. However, many domestic suppliers still focus on low-end products, while key component technologies remain a challenge.
Some outstanding domestic enterprises have adopted strategies similar to foreign competitors. Through technological innovation, restructuring, and brand-building, these companies have begun producing their own parts and selling them to forklift manufacturers. Many are transitioning from serving the low-end repair market to high-end OEM markets, specializing in niche areas, and building competitive advantages. Some companies have even gained international recognition.
(2) Foreign and Joint-Venture Component Companies
China has attracted foreign investment to acquire advanced technologies. As global forklift manufacturers set up factories in China, major international parts suppliers have also entered the market, investing heavily in research and development.
Foreign-invested companies focus on high-tech components such as hydraulic systems, hydrostatic transmissions, and digitalized and intelligent parts. They benefit from strong financial backing, advanced R&D capabilities, and global branding strategies, allowing them to expand their market share rapidly. However, these companies often retain their most advanced technologies and transfer only selective know-how to their Chinese subsidiaries.
While foreign investment has improved China’s overall technological capabilities, it has also widened the gap between domestic and international companies. Despite boosting competition and efficiency in China’s forklift parts sector, foreign firms tend to maintain control over their intellectual property and restrict local access to cutting-edge technologies.
(3) Repair Service Providers Turned Parts Suppliers
As forklift sales increase, some repair service providers have evolved into parts suppliers. These businesses generally lack advanced R&D capabilities and management expertise, operating on a small scale.
Although the rapid industry growth has allowed some of these businesses to expand, only a few successfully transition into structured enterprises with improved technology and management. Many remain stagnant, potentially limiting overall industry development in the future.
(4) Large-Scale Parts Wholesalers
Forklift parts wholesalers can be divided into two categories: domestic and imported parts suppliers.
However, many wholesalers struggle with outdated infrastructure and inefficient distribution models. Their reliance on traditional, high-cost trading practices results in slow market responses and a lack of supply chain integration. Additionally, many wholesalers focus on a narrow product range without a comprehensive industry strategy.
(5) Regional Distributors
Regional distributors offer a wide variety of forklift parts, making it convenient for customers to source components locally. Their proximity to customers allows them to provide personalized service and meet local supply and demand needs.
However, these businesses lack pricing power, as they operate as secondary or tertiary suppliers rather than direct manufacturers. Their limited control over pricing restricts their market influence.
3. Future Development of the Forklift Parts Industry
The five business models outlined above collectively support the forklift parts industry, each playing a role in market growth. Moving forward, Chinese parts companies can take inspiration from European suppliers, focusing on:
By optimizing these areas, China’s forklift parts industry can achieve sustainable growth and compete on a global scale.