The Global Industrial Vehicle Market is estimated to be valued at USD 41.7 Bn in 2024 and is expected to reach USD 65.6 Bn by 2031, growing at a compound annual growth rate (CAGR) of 4.6% from 2024 to 2031.

The industrial vehicle market has been witnessing positive growth trends over the past few years. Factors such as rapid industrialization and growing need for material handling across industries have increased the demand for industrial vehicles. Moreover, increasing automation in manufacturing and warehousing facilities has augmented the use of automated guided vehicles and tow tractors. Growing e-commerce and automotive industries will further drive the demand for industrial vehicles in the coming years. However, high initial investments may hinder the market growth to some extent. Overall, the industrial vehicle market is expected to offer lucrative opportunities with technological advancements in vehicle automation and connectivity.

Market Driver - Rapid Industrialization and the Rise of Industry 4.0 in Manufacturing Processes

With rapid industrialization taking place across major developing regions such as Asia pacific and Latin America, the manufacturing sector is going through a transition. Counties are focusing on enhancing productivity and efficiency in production processes through advanced technologies such as robotics, IoT, big data analytics and cloud computing. This transition broadly known as Industry 4.0 is increasingly getting adopted by leading manufacturers globally.

The core principle of Industry 4.0 involves connecting industrial production facilities and integrating them with existing information systems. This allows real-time data collection from machines and equipment on plant floors which helps in remote monitoring and predictive maintenance. It brings data driven intelligence right on the production line for improved decision making. Manufacturers are now able to gain deeper insights into their operations and optimize processes accordingly.

One of the major outcomes of Industry 4.0 initiative has been increased automation through deployment of robotic solutions. Advanced robotics equipment is replacing human workforce for handling complex and repetitive tasks. This is helping manufacturers cope up with challenges like labor shortage and enhance productivity multi-fold. However, with high installation of robots comes the demand for supporting vehicles that can safely and efficiently work around these automated machines.

Overall, rapid industrialization and ongoing Industry 4.0 revolution is propelling the production volumes across manufacturing hubs globally. At the same time, demand for intelligent logistics solution is increasing to support highly automated plants of future. This emerging transformation clearly plays into the growth of industrial vehicle market that caters to evolving material & inventory movement needs of smart factories. Their sustained deployment will be pivotal for factories to maximize Industry 4.0 benefits and reap fruits of digital transformation.

Market Driver - Increasing Demand for Electric and Battery-Operated Vehicles Due to Stricter Emission Regulations

With rising environmental awareness, many countries have implemented stringent emission norms for industrial and commercial vehicles. Regulatory bodies are particularly focusing on curbing toxic emissions from fuel-based vehicles used within indoor production facilities, warehouses and logistic parks. This is mainly because exhaust from internal combustion engines contains harmful gases like carbon monoxide, nitrous oxides, particulate matter etc. Continuous exposure to such emissions pose serious health risks.

In view of tightening emission regulations, industrial vehicle manufacturers are developing more environment-friendly alternatives. All electric and hybrid-electric vehicles are seen as viable replacements to traditionally used diesel or gasoline vehicles. By replacing the fuel engine with an electric motor, they ensure zero-tailpipe emissions within closed spaces. Their silent operation is also preferred over noise generating internal combustion engines.

Battery technologies are advancing rapidly, helping electric vehicles achieve longer driving ranges on single charge. Advanced Lithium-ion batteries utilized in new generation electric trucks and forklifts provide powerful performance comparable to gasoline counterparts. Furthermore, compatibility with fast charging infrastructure addresses issues of limited driving range associated with older battery versions. This improves the practical usability of electric vehicles for real-world industrial applications.

Rising environmental sensibilities among manufacturers make them inclined towards green fleet upgradation programs. Electric vehicles enable reducing carbon footprint as well as lowering operating costs through savings on fuel and maintenance in long run. With growing availability of subsidies and incentives for electric commercial vehicles, their adoption is accelerating further. The preference for battery-powered industrial transport augurs well for electric vehicle industry and positively impacts relevant markets growth. Strict laws compelling compliance with emission norms will continue directing this technology shift in near future.

Market Challenge - High Maintenance Costs Associated with Industrial Vehicles May Hinder Market Growth

The industrial vehicle market faces significant challenges due to the high maintenance costs associated with these specialized equipment. Industrial vehicles such as forklifts, tractors, loaders etc. involve complex machinery and components that require frequent servicing and repairs to ensure operational efficiency. This makes maintenance one of the largest cost components for owners of industrial fleets. Factors such as wear and tear of parts due to continuous usage in tough working conditions, repair or replacement of damaged components and the use of specialized skills for maintenance work drives up the total cost of ownership considerably. According to the analysis, maintenance costs can account for over 20% of the total lifetime expenditure on an industrial vehicle. With economic slowdown in many regions globally, companies are looking to optimize costs wherever possible. The high sunk costs associated with maintenance can act as a deterrent for fleet expansion plans. Manufacturers will need to focus on building vehicles with enhanced durability and reliability so the frequency of repairs is reduced. Also servicing networks need to offer cost effective maintenance packages to help lower the costs borne by customers. Unless these issues are addressed, rising maintenance bills can negatively impact future demand for industrial vehicles.

Market Opportunity - Increased Demand for Electric and Battery-Operated Vehicles to Improve Productivity and Operational Efficiency

There is a growing market opportunity for electric and battery-powered industrial vehicles. Driven by factors such as rising energy costs, stringent emission norms as well as productivity and efficiency considerations, many companies are actively exploring electric vehicles for their warehousing and logistics operations. Electric industrial vehicles have distinct advantages - they are more environment friendly as they do not emit pollutants. They are also more energy efficient since the electricity required to power them is cheaper than diesel in the long run. Most importantly, electric vehicles improve workforce productivity. Their quieter operations allow intensive use in multiple shifts without noise restrictions. Automatic functions replace manual levers, enabling easier and faster operation. Fleet managers are able to closely monitor battery status and charging requirements remotely. Overall, electric vehicles have up to 20% higher productivity over diesel or gas variants. Their improved efficiency positively impacts transportation and labor costs. With continuous technology advances, the performance limitations of early electric vehicles are disappearing. If manufacturers can address range anxiety issues and bring down battery prices further, the industrial electric vehicle market is poised for exponential growth in the coming years.

Focus on innovation and new product development: Companies like Toyota, Kion Group, and Jungheinrich have seen great success by constantly innovating and introducing new products to meet evolving customer needs. For example, in 2018 Toyota launched the Tug dual control vehicles to facilitate operator training. This innovative product helped Toyota capture new customers and strengthen its leadership position.

Strategic acquisitions for market expansion: Leading players expand their market share and capabilities through strategic acquisitions. In 2019, Kion Group acquired Dematic to enhance its intralogistics automation solutions portfolio. This acquisition enabled Kion to offer integrated automated guided vehicle systems and software to customers across diverse industries. It helped Kion expand beyond forklifts into new growth areas of automation.

Strong aftermarket focus and service support: Aftermarket revenues contribute significantly to top and bottom lines. Companies like Mitsubishi Logisnext invest heavily in their dealer network and service/maintenance contracts to ensure strong aftermarket support. In FY2020, Mitsubishi's aftermarket sales grew 4.2% YoY owing to superior service support even during the pandemic. Their focus on the aftermarket has helped achieve customer stickiness and Recurring revenues.

Customized products and digital solutions: Players tailor products as well as offer digital/IoT solutions customized to specific industry and application needs. Jungheinrich's warehouse management software and data analytics helped retail major DHL increase productivity by 30%. Such customized, digitally-enabled offerings help win large fleet customers across industries.

The above examples demonstrate how continuous innovation, strategic M&A, strong aftermarket focus and customized digital solutions have helped industrial vehicle leaders gain competitive edge and achieve above-market growth over the past five years. Data-backed instances showcase real impact of key winning strategies.

Insights, By Drive Type, Fuel Efficiency and Established Infrastructure Drives ICE Segment Growth

By Drive Type, ICE segment is expected to contribute 49.6% in 2024 owing to the higher fuel efficiency and availability of established infrastructure for refueling. Though concerns exist around greenhouse gas emissions from ICE vehicles, operators in various industrial applications prefer ICE due to its optimized performance in handling frequent short-distance hauls and stop-and-go operations common in environments like manufacturing, and warehousing. The vast network of gas stations allows convenient refueling of ICE vehicles as compared to other alternatives. Additionally, ICE technology is mature and refueling time is lower compared to electric or gas-powered vehicles. Established local supply chains ensure easy access to spare parts and maintenance support. While new drive technologies are emerging, ICE vehicles will continue dominating in industrial applications that require high operational times and dependability due to superior energy density of gasoline/diesel.

Insights, By Level of Autonomy, Driver of Non/Semi-Autonomous Segment is Functionality Over automation

By Level of Autonomy, Non/Semi-autonomous segment is expected to contribute 64.2% in 2024 as operators prefer functional vehicles for core industrial operations over highly automated variants. Non/Semi-autonomous vehicles are purpose-built to handle cargo with reliability and safety in factory environments that require precise navigation. Their simpler design prioritizes functionality for transporting goods and staff over autonomous driving features unnecessary for indoor/dedicated routes. Additionally, non-autonomous vehicles face fewer regulations and safety validations compared to autonomous variants. While pilot-less vehicles offer opportunities for remote control, most industrial applications continue relying on on-board operators for supervision and flexibility. Non/Semi-autonomous vehicles thus become more viable for repetitive, scheduled transportation needs within factory premises compared to technically complex autonomous variants.

Insights, By Application, Manufacturing Dominates on Need for Dedicated Transportation

By Application, Manufacturing contributes the highest share owing to massive transportation needs within factory premises. Manufacturers require reliable vehicle fleets for consistent movement of raw materials, parts, work-in-progress and finished goods between various processing areas. Dedicated industrial vehicles suited for manufacturing environments ensure smooth intra-facility logistics through customized configurations. Their specialized design addresses needs of navigating narrow aisles and transporting a variety of cargo types. Prevalent practices like just-in-time manufacturing further increase reliance on continuous transportation of goods. Additionally, factory safety norms mandate segregation of freight vehicular traffic from passengers. Thus, manufacturing applications create sustained demand for industrial vehicles configured for material handling within confined production facilities.

The Industrial Vehicle Market is experiencing steady growth due to industrialization, the rise of Industry 4.0, and increased automation. Asia-Pacific is currently the largest market, driven by rapid industrial growth in countries such as China, Japan, and India. North America is expected to witness significant growth, mainly due to technological advancements in industrial automation and the expansion of e-commerce requiring precision in supply chain management. Industrial vehicles, such as forklifts, lift trucks, and electric vehicles, are widely used in warehouses, manufacturing plants, and logistics hubs to improve efficiency. The market is further driven by the increasing demand for battery-operated vehicles due to their lower emissions and better energy efficiency. These vehicles are especially gaining traction in regions where emission control regulations are stringent. Overall, the market is expected to see continuous growth with advancements in technology and increased industrial automation.

The major players operating in the Industrial Vehicle Market include Anhui Heli Co. Ltd., Crown Equipment Corporation, Hangcha Forklift, Hyster-Yale Materials Handling, Jungheinrich AG, Kion Group AG, Toyota Industries Corporation, Doosan Corporation, Mitsubishi Heavy Industries, Ltd., Hyundai Construction Equipment, Polaris Inc., SSI SCHAEFER, Ross Electric Vehicles, Daifuku and Taylor-Dunn.

• In March 2024, Kalmar (part of Cargotec) agreed to supply Intermodal Terminal Company in Australia with six electric reach stackers and two electric empty container handlers, supporting its Somerton Intermodal Terminal in Melbourne.
• In September 2023, Hangcha unveiled its 3-Pivot XC Model, which offers exceptional maneuverability in small spaces, representing a breakthrough in material handling through the use of lithium E-Trucks.

• By Drive Type
  • ICE
  • Battery-Operated
  • Gas-powered
• By Level of Autonomy
  • Non/Semi-autonomous
  • Autonomous
• By Application
  • Manufacturing
  • Warehousing
  • Freight and Logistics
  • Others