“Environmentally-friendly trucks have become the trend”

In January, China issued new emissions guidelines for diesel vehicles in order to improve air quality. Also forklift manufacturers had to act immediately and to offer more environmentally friendly models. The KION brand Baoli was early prepared. The dimensions are breath-taking, often enough literally: Every day, over 50 million pieces of non-road diesel machinery are busy working to build China’s economy. And every year, around 2 million new pieces of non-road diesel machinery join this force. Among the newly added machines, almost one in ten, or 160,000, are diesel forklifts. Non-road diesel machines consume over 100 million tonnes of diesel fuel each year, equal to 20 per cent of China´s total consumption, and emit over 2 million tonnes of nitrogen oxides. In order to further control pollution emissions from non-road diesel machinery, China’s Ministry of Environmental Protection announced in January 2016 that, beginning 1 April 2016, no non-road mobile diesel machinery (except farm equipment) could be manufactured, imported or sold if equipped with diesel engines that do not comply with the Stage III requirements of China’s Non-road Emission Standards. From 1 December of this year on, no agricultural machinery can be manufactured, imported or sold if equipped with diesel engines that do not comply with the new requirements. For China’s forklift makers, whether domestic or foreign-owned, the release of the new standards meant that, beginning 1 April 2016, the diesel forklifts they produce, import and sell would all have to be equipped with engines that comply with the new emission standards which are equivalent to European IIIA emission standards. In the view of Zhang Jie, Secretary-General of the China Industrial Truck Association (CITA), these changes were imperative: “First and foremost, implementing the new standards will help improve air quality, and secondly, it will help winnow out the older models, achieving a major upgrade and generational succession within the forklift fleet. Using new highly efficient, low-emission, more environmentally friendly models to satisfy the demands of customers has become the trend in the industry’s development.”

Quick action is required

Three months after official implementation of the new standards, forklift makers within the industry differ sharply when it comes to their execution results. Some forklift manufacturers and engine producers have not reacted fast enough to keep up, and there were misunderstandings over the policies and standards being implemented, which ended up hurting the sales of those enterprises. On the other hand, some other forklift manufacturers and engine producers sprang to action as soon as the Chinese government began promoting the new standards during the 12th five-year plan (2011-2015), working together to develop products that meet the new standards. For example, collaboration between KION Group’s Baoli brand in Jingjiang (Jiangsu Province) and Chinese engine maker Weichai Power has already borne fruit. Weichai Power had begun building its reserve of technologies to satisfy the new emission standards as early as several years ago. As one of the earliest forklift manufacturers in the industry to launch a Stage III engine project , KION Baoli began its technical preparation work for the new standards back in early 2015. By the time the new standards officially went into effect, all of the diesel forklift trucks sold by Baoli in China, from 1.5-tonne to 10-tonne models, already complied with the new standards’ requirements. Baoli’s quick response, coupled with Weichai’s prudent preparation, allowed Baoli to successfully complete the switch from Stage II-compliant to Stage III-compliant engines.

Higher requirements on service

This accomplishment did not come easily. Wang Guihai, General Manager at Baoli, is crystal clear about the challenges his team overcame on the way to achieving its results. “Switching engines on a forklift truck may not sound that hard, but in fact the degree of difficulty can well be compared to giving a person a heart transplant.” he explains, “The entire process, from technology development to testing and on to mass production and launching sales on the market, involves a host of internal links, including R&D, testing, quality control, production, logistics and sales.” Additionally, in view of the different working conditions of its customers, and in order to satisfy their various demands, Baoli provided customers Stage III-compliant Baoli products with engines using different fuel injection systems. The technical advantages of the new engines allow customers to reap huge benefits, but the complex fuel injection systems also put forward higher requirements for service and maintenance. According to Wang, “just stressing to customers the superiority of the new engines and the importance of maintenance was clearly not going to be enough. We also need to train dealers. More importantly, we need to handle market and customer feedback extremely promptly and effectively.” Baoli’s thorough preparation and hard work impressed the market. By the end of July, Baoli had received nearly 2,000 orders since it started selling Stage III-compliant forklifts in April.

Further tightening to come

The rave reviews from the market and customers for Baoli’s Stage III-compliant forklifts prove that Baoli has won a victory, but that was just the beginning. As Secretary-General Zhang Jie explains, the requirements of China’s emission standards for diesel engines in non-road machinery are becoming increasingly strict, and implementation of Stage IV standards for non-road machinery emissions is expected to commence at the end of 2018. Some cities such as Beijing and Shenzhen have even posed requirements higher than those of the national standards. In addition, since forklift trucks that meet higher emissions standards use new engines, leading to increased costs, the price difference between diesel forklifts and electric forklifts has narrowed. “These developments will alter the structure of the market, which has long been dominated by internal combustion (IC) forklifts, with the share of electric forklifts in the overall market expected to grow,” explained Zhang Jie. “According to statistics for the first half of 2016, electric forklift trucks have 28 per cent of the Chinese market. We forecast that the share will reach around 40 per cent by 2020.” In terms of the changing trends in State policies and their future impact on the material handling industry, she advised: “Forklift truck producers, especially those mainly producing IC forklifts, should attach much importance to these changing trends and make adjustments accordingly.” Baoli, whose IC forklifts account for around 85 per cent of its sales in the Chinese market, is already at the forefront of these trends, establishing itself in electric forklifts even as it consolidates its advantages in IC forklifts. Baoli has overhauled its R&D efforts, and has teamed up with engine makers to jointly develop products compliant with higher emission standards. At the same time, in order to lower customer’s cost burden, it has taken steps on materials, internal processes and operations to lower the cost of new Stage III-compliant forklifts.

Number of electric models will increase

In addition, Baoli has adjusted the direction of its R&D program, increasing the proportion of developers working on electric forklifts and warehouse forklifts, aiming to expand the electric and warehouse forklift product lines. Toward this end, Baoli established an electric and warehouse forklift sales team to cooperate closely with dealers and ramp up the company’s electric and warehouse forklift sales effort. This growing team has one clear-cut goal: In the next three years, raising the proportion of electric and warehouse forklifts in total China sales to 25 per cent. “State policies and industry trends are both changing,” Wang says, “but Baoli is always prepared for a rainy day and is always focused on clients’ demands, dedicated to providing customers with energy-saving, environmentally friendly products.”