Industrial truck and lift market facing competition from AGVs
IHS Markit reports that automatic guided vehicles (AGVs) are projected to have stronger growth over the next several years than the industrial truck and lift market as more companies use AGVs because they are more cost-effective.
Despite relatively good performance in 2015 with a market value totalling $27.4 billion, industrial trucks and lifts are facing new competition from automatic guided vehicles (AGVs). According to the IHS Markit Materials Handling Automation Opportunities Report, the compound-average annual growth rate (CAGR) of AGV revenues is forecast to be over nine percent from 2015 to 2020, which is much higher than industrial trucks and lifts over the same time period.
Currently, AGVs are used mostly in automotive production as they can be programmed for custom tasks. For example, AGVs are commonly used to haul custom parts for automobiles. While this would have been a logistics nightmare in the past, it is now feasible with AGVs and modern software management systems.
The current outlook is that sales revenues from AGVs will not overtake those of conventional industrial trucks; there will be a minor disruption to truck sales in some regions: many end-users are choosing AGVs as replacements rather than buying new fleets of industrial trucks. They are also investing heavily in the management software that controls entire fleets of AGVs that work alongside legacy production lines and other material handling machinery such as automated storage and retrieval systems (AS/RS).
The main reason for the shift to AGVs is that they have been shown to be more cost-effective in the long term, providing a better return on investment for end-users. Other benefits of AGVs include higher output and smaller error rates than with human-operated industrial trucks. The increasing emphasis on smart manufacturing will also help to stimulate growth in the market.
Despite the stronger market growth of AGVs, industrial trucks and lifts will continue to be the biggest product category for material handling equipment. Sales of industrial trucks will be driven by companies that are reshoring in developed areas such as Mexico that use many industrial trucks in warehouses. Furthermore, the development of alternative fuel sources, like electric traction and hydrogen fuel cells, have reduced the carbon footprint of industrial trucks, making them a greener solution.
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