iVT International interview with Matthias Fischer, President of TMHE


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Matthias Fischer sets out his view of the European market and how it is developing as TMHE aims to achieve market leadership in-line with the rest of the world. He talks about the key emerging markets like Russia, Turkey and Ukraine, and how they differ from the rest of Europe at the moment. The impact of Chinese manufacturers is discussed, highlighting the need for service support. Matthias Fischer also talks about the launch of Toyota counterbalance trucks with hydrostatic control and how electric trucks are gaining popularity.

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iVT International interview with Matthias Fischer, President of TMHE

  2. 2. 25 OEM INTERVIEW Given the constant flow of information about the impressive status – even when in decline – of the Chinese and Asian industrial vehicle markets, it’s easy to forget that, with annual volumes habitually reaching over 300,000 units, the European market for forklift trucks is traditionally the world’s largest. Similarly, given Toyota Material Handling’s well-publicised world- leading status, it may also surprise some readers to learn that, while the OEM tops the North American and Asian markets, it only occupies third position in Europe, behind the Kion Group and Jungheinrich. So when I met Matthias Fischer, president and CEO, Toyota Material Handling Europe (TMHE) recently, I was keen to find out why this was the case, and what he intended to do about it. “I think this is quite easy to answer,” he says. “We are number one in Japan and the USA because we have a long history in those markets; much longer than the history of Toyota in Europe. Our European competitors have been acting over here for many, many years and built up a very strong customer base – so we have to conquer that. “However, in some European countries we are already number one, so I think we’ve made a good step forward over the last 10 or 20 years. So if you summarise the total setup of what we have in Europe, then we are only missing a few percentage points to become number one. So there’s not a huge gap between us, but it’s still a gap nonetheless and it’s sometimes tricky to close it.” Counter challenge So is there one particular product sector that will be key to closing that gap? Matthias points out that TMHE’s BT warehouse range has a higher share of the market than Toyota’s counterbalance trucks – no doubt helped by its longer presence in Europe – leaving the highly competitive CB sector as perhaps the main battleground. “Therefore, we’ll be launching our new product, the HST, (see iVT February 2014, p10) and this is targeting a certain market as well. That has been developed here in Europe for the European market, as hydrostatic trucks are not very common outside of our continent. If that changes in the future, then we have something we can export from here.” Eastern Europe is where major growth is happening, of course – OOO Toyota Material Handling RUS was recently created to take advantage of that situation – so how might trends and prospects in the region affect TMHE’s strategies in the coming decade? “You really have to divide eastern Europe into two different areas. One is the area close to the ‘border’ with western Europe, which Advanced Lift-truck Technology International 2014
  3. 3. 27 OEM INTERVIEW includes Czech Republic, Slovakia and Poland. That is now quite a developed market. Then you have the area with Russia, Ukraine and Belarus, where there is a completely different infrastructure and very different competitors. “Russia, for example, is quite influenced by Chinese products – you find a lot of Chinese IC trucks over there. But I think in the next 10 years, you will see a big change in the structure – logistics will grow in these countries and the market will mature, for sure. “I also think the customer will increasingly understand that it’s important to have a reliable partner for long-term solutions. So we will also see a trend in these countries where more customers are willing to pay a bit extra in the beginning as a way to then save costs through the lifetime – however, that will take some time.” Given that the western European market is now very much different from what it was 20 years ago, that’s a fair point. Go outside of Moscow, Matthias points out however, and you’ll encounter conditions that equipment used in more advanced markets – such as a stacker with 3cm ground clearance – just wouldn’t be able to cope with. “But once the infrastructure is there, you will see demand for warehouse products increase. But it will take time – longer than we think.” Engines for growth? While browsing the TMHE website ahead of our chat, I’d been quite startled to see that only 12% of the trucks it produces are IC-powered. So how might growth in eastern Europe affect that proportion – and might it even be fair to say that the region is keeping internal combustion truck production alive? “In the western European market, size-wise the warehouse market is clearly dominant. So CB electrics are now getting a little higher share than CB IC, especially as a result of the new emissions legislation, and improved quick-charging systems. Electric trucks were once regarded as providing lower performance than an IC truck, but they are now at the same level. So in the range between 1-3 tonnes, I think we will see more and more customers going for CB electrics than IC trucks – although our new 4-tonne Traigo (page 13) can match IC performance too. “Eastern Europe is the other way around, however, because cheap fuel is readily available. They often need a truck for inside and outside use, and may not have very flat floors. In their logistic premises not everything is completely clean. But I think in the future you will see the warehouse market going up at the expense of the CB market – in fact, we can see that happening already.” Looking over the shoulder Returning to those Chinese competitors, I ask whether their threat is mainly restricted to sales in eastern Europe, or whether in western Europe they are limited to competing with brands that don’t occupy TMHE’s high-end position. Is there a danger Advanced Lift-truck Technology International 2014 French toast As of January last year, TMHE and Manitou ended their exclusive distribution agreement for Toyota- branded equipment in France, with both groups recognising that the business model was no longer suitable for further market development. So, a little over one year later, how has that all been working out, I asked Matthias Fischer? “I think we are quite satisfied at the moment,” he confirms. “Now we are building the dealer channel directly, so we have TMH France selling CB trucks and our warehouse trucks. The existing dealers for the Manitou range are also selling our CB products, both IC and electric, now as well. “So we now have the same setup there that we have in other countries, with a direct organisation and a dealer organisation in parallel. The good thing is that the dealers from the Manitou arrangement are now selling the BT range to brand-new customers. Previously there was only a small overlapping of the Toyota/BT customer base – roughly 10% – we were fishing in different ponds. The BT sales guys did not target the industrial and smaller customers because they couldn’t offer a good CB range as well, and the Toyota dealer was never going to target the Carrefours of this world because there wasn’t a complete range on the warehouse side. “But now we can see an increase in both areas – the direct sales force now with the Toyota products, and the BT setup selling more Toyota trucks to the other side. It’s a good setup, and we have seen that echoed in many markets, where they have the direct sales force in parallel with dealers in the same area – they are selling the same products, but in a friendly atmosphere. That’s important – you have to avoid cannibalisation!” “ELECTRIC TRUCKS WERE ONCE REGARDED AS PROVIDING LOWER PERFORMANCE THAN AN IC TRUCK, BUT THEY ARE NOW AT THE SAME LEVEL. SO IN THE RANGE BETWEEN 1-3 TONNES, I THINK WE WILL SEE MORE AND MORE CUSTOMERS GOING FOR CB ELECTRICS THAN IC TRUCKS” BT products, such as the new Levio P-series due to be launched at CeMat, have a higher market share in Europe than Toyota-branded products
  4. 4. 28 OEM INTERVIEW Advanced Lift-truck Technology International 2014 in focusing all your attention on the two giants ahead of you, and risking being taken by surprise by the minnows coming up behind? “If you look into the Chinese development, it’s quite an up and down situation that we have,” he says. “Five or six years ago, there was a hype and they were gaining share, then they went quiet over the last three or four years and lost a bit of that share. Now, however, you can see an increase again. We see high competition from China in places like Turkey, Ukraine or Russia; they are quite strong in markets where customers are not willing to pay a lot of up-front cost, where they’re not looking at the total cost of ownership. “In western European markets, the Chinese still face difficulties due to lack of a service organisation. And also, we have a surplus of used trucks so it often makes more sense to buy a used Toyota truck than a new Chinese one. However, we are watching the situation very carefully, and closely following the statistics, especially in areas where we have the highest competition from China.” But what’s the best way of counteracting that threat, I press – do you make a cheaper product or, in the more advanced markets, add on even more extra value? “In a mature market, most of the customers understand the concept of lifetime costs. You can compare how much you’re able to pay, based over the next six or seven years, or whatever the contract duration is. Chinese competitors have some difficulty doing that. “The people who are buying their products are the smaller customers who use a truck for two hours a day, maybe even less. Then they think, ‘Okay, this truck is doing the job’. What we are asking customers is, ‘If you have a breakdown, how long will it take until you get the spare parts or until they send a technician out to fix it? Even if you only need the truck for two hours a day, how will you carry the loads?’ “So for those types of customers for whom a new truck will always be too expensive, we try to sell them a used, but still high-quality, one. “In western Europe, you will only ever be number one by being best in service, providing reliable trucks that last for many years. We carried out a survey of 8,000 European customers, and over 90% were either satisfied or very satisfied with our service. We’ve even taken the Toyota Production System (TPS) that we use in our manufacturing facilities and applied that to our service procedure, with the Toyota Service Concept. “So the Chinese are getting better – but you will never find a Toyota truck at their price level!” ALT “IN WESTERN EUROPE, YOU WILL ONLY EVER BE NUMBER ONE BY BEING BEST IN SERVICE, PROVIDING RELIABLE TRUCKS THAT LAST FOR MANY YEARS” ABOVE: A strong team behind the plans to conquer Europe – left to right: Norman Memminger, MD, TMH Deutschland; Hirooki Fujiwara, chairman and executive co-ordinator, TMHE and senior managing officer, TICO; Matthias Fischer; and Hans van Leeuwen, EVP Marketing and Sales, TMHE