Linde (China) celebrated its 20th anniversary at the Xiamen International Conference Centre Hotel on 6 Dec 2013.

KION wants to overtake Toyota as the world's largest forklift manufacturer by 2020 and China has a significant role to play. In an exclusive interview with Forkliftaction.com News, KION Group's head of corporate media relations, Frank Brandmaier, dispels rumours about Linde (China)'s profitability and reveals why the group has an advantage.

Linde (China) Forklift Truck Corp rolled the 100,000th forklift off its production line on 6 December as the company marked its 20th year in China.

Linde (China) is a production, sales, service and R&D base that Aschaffenburg-headquarted Linde Material Handling set up in 1993. Brandmaier says, "for years, China (has been) one of the group's most profitable markets". This puts to bed the rumours circling the industry that KION's Chinese venture had been bleeding money.

"China has long been part of our company's DNA. We have been here for 20 years and now have more than 3,000 employees in the country. We are the largest international supplier and the number three overall in the Chinese market. Our 100th service outlet in China opened recently. We employ approximately 250 people at the two R&D sites."

Brandmaier says products that have the 'made in Germany' tag are highly regarded in China. "And they are precisely what the KION Group offers. With Weichai Power as a strong partner at our side, we are also increasingly being perceived as a domestic supplier here in China."

Weichai Power, through its Luxembourg-based subsidiary, Weichai Power (Luxembourg) Holding Sàrl, currently holds a 30% stake in the KION Group (Forkliftaction.com News #622).

Brandmaier explains that key to the company's success is "having a strong local management". "Among the more than 3,200 KION employees, there are only a handful of non-Chinese origin [personnel]. This makes it easier for us to make inroads into the market and develop products that are tailored to local needs."

KION was one of the first German companies to enter the Chinese market.

"We had a good sense of the huge potential the market would offer," Brandmaier says. "And we were right. The Chinese market for industrial trucks is now nine times as big as it was 10 years ago. Today, China accounts for a quarter of the global materials handling market."

Brandmaier points out three "megatrends" that he says play to KION's advantage:

• The growing industrialisation of the emerging markets. The needs of newly emerging middle classes are rapidly pushing up demand for logistics services - and therefore for KION's products;
• The globalisation of international trade and the accompanying increase in the exchange of goods; and
• The increasing number of links in supply chains and value chains - KION products are used at every step of these chains.

"China is, without any doubt, a key market to reach this goal [to overtake Toyota]. According to studies, the Chinese market is likely to grow by more than 6% per year between now and 2017," Brandmaier explains. "We want to tap into this growth. That is why the KION Group will continue with its targeted investments in China over the next few years."

He adds that although China and Asia are a "fundamental element" of the group's growth strategy, KION is also growing rapidly in Eastern Europe and South America.

In the third quarter of 2013, 37% of new truck orders were placed in emerging markets. KION is not just expanding its sales and service structures in Asia but also in emerging markets.

"The KION Group brand companies have developed a comprehensive product portfolio over the past few years that specifically caters to the needs of customers in fast-growing markets, who require less complex but highly robust trucks," Brandmaier says.

The takeover of Baoli was a "very specific" strategic step for KION. It enabled the group to consolidate its position as the top international supplier of materials handling products in China. Baoli, with its competitively priced product portfolio, is a key pillar of the strategy for KION's expansion in the world's high-growth markets.

KION South Asia, which was set up in Singapore last year, has ensured the group has in place the organisational structure to unlock the full potential of the south and south-east Asian markets (Forkliftaction.com News #646).

"Our goal is to carry on expanding our market share in Asia and to acquire additional customers across the region. To this end, we are constantly extending the local sales and service networks of the KION Group's global brands Linde, STILL and Baoli," Brandmaier says.