After a period of record growth, the lift truck industry experienced a significant slump last year and into this year, but manufacturers are starting to see the light at the end of the tunnel. "We are seeing a bottoming out of the recession that developed in 2001," reports Jim McManus, VP, sales and marketing, for Toyota Material Handling USA (Irvine, Calif.). "We're starting to see a slight improvement, and by the end of the year we expect to see the upturn be even more definite." The end result, according to McManus, is that total volume for 2002 will probably be very similar to volume for 2001, but with a reverse curve.

Scott Alexander, director of marketing for Hyster Co. (Greenville, N.C.), is equally optimistic. "Our industry tends to lead in downturns and lag in recoveries," he admits. "What we're seeing for the remainder of 2002, though, has us 'bullishly optimistic'. We are starting to see capacity utilization match up where it's supposed to be, and pent-up demand is starting to return." Currently, in fact, Hyster is ahead of its forecast for 2002.

Pricing has always been competitive, according to McManus. "However, it has become even more competitive in the last year or so. In 2001, for example, the market dropped over 35%, resulting in a great deal of available capacity."

Alexander sees some positive changes coming, though. "Pricing is starting to solidify," he says. "We no longer have the large inventories that we had following Sept. 11."

Part of this is due to the fact that commercial customers have come back. The other part relates to the return of consumer customers as well. "The consumer segment affects the commercial segment, because consumer activity drives some of the market conditions," explains Alexander. "In other words, when the consumer comes back, it starts to shore up pricing in general."

According to McManus, the industry has capacity to produce 190,000 trucks a year. However, current demand is only 135,000. "As a result, a number of manufacturers have slowed down, gone to four-day workweeks, etc.," he says. Despite the slowdowns, though, manufacturers have still been able to react quickly to increases in demand, and there is still a lot of room to continue to react further. "In sum, I don't think supply will become a problem as demand begins to increase," says McManus.

"Meeting our customers' demands on availability is our next challenge," adds Alexander. "We feel that we have right-sized our production levels for a conservative economy, but that we are ready to respond to an upturn." For Hyster, commercial backlog bookings are up. While this is good for the company's financials, it still must keep an eye open in terms of meeting customer demand, according to Alexander. The reason: "Since trucks for commercial accounts tend to have more consistent run rates, we can stay ahead of these curves pretty well, so availability for commercial account trucks is remaining level. We are now keeping an eye on the consumer trucks to make sure we will have availability for those."

One trend in the industry is a continuing emphasis among manufacturers on placing operators first. "From the employer standpoint, operator comfort and productivity are becoming increasingly important," notes Alexander. "While this has been a growing trend for a decade, it has really come to the forefront in the last one or two years."

Another trend relates to dealership consolidation. "In the industry as a whole, there seems to be more consolidation among dealers," observes McManus. "As business is changing in general, and in this economy in specific, it is becoming more difficult for small dealers to remain competitive against larger dealers."

Manufacturers are still looking toward the future with new product improvements. Toyota, for example, introduced seven models of straddle, counterbalance and reach walkie stackers in July. "By the end of 2002, we will expand our AC technology into three-wheel counterbalance trucks," adds McManus.

One area of focus at Hyster has been operator comfort and productivity, with a special emphasis on ergonomics. An example is the EZXchange tank bracket designed to make LP tank replacement easier. "We have also created fingertip control via electronic hydraulics on several models, where operators can rest their arms on armrests and use fingertip control," continues Alexander.

Manufacturers are also starting to encourage customers to view lift trucks not just as necessary pieces of equipment, but as solutions for performing their work more efficiently and effectively. "Along these lines, we have made improvements in serviceability and diagnostics," says Alexander. "We are also working cellular telemetry, which provides the ability to access remote data from the truck, such as engine hours, hydraulic pump house, g-force indications, etc." For buyers in the market for lift trucks, Alexander offers the following observation: "When buying a truck, it is important to make the decision based on management of the truck and total cost of ownership, not just the acquisition price."