Lift Report

Statistics show that a total of 900,000 to one million elevators are in operation in China. That is hardly a large number, however, if one considers the population of 1.3 billion persons. One fifth of the world’s population uses one tenth of the elevators and that represents only one half of the average global level. The discrepancy is even larger when a comparison is made with the industrialized nations. China has ambitious expansion plans but there is still a long road to be covered before that goal is reached. That is why the country will continue to be the world’s largest elevator market for long time to come. This means that the demand for elevators will continue to rise, although this does not mean that the annual growth rates will remain constant. The government is employing macroeconomic steering instruments to keep the economy from overheating. One effect will be to slow the growth of the real estate market and development will in general be slower. It is not yet clear what effects these measures will have on the elevator industry.

The large market potential is why almost all the world’s major elevator companies are hopeful. Otis from the US, Schindler, Kone and ThyssenKrupp from Europe, Mitsubishi, Hitachi, Toshiba and Fuji from Japan – and others – have all set up extensive production capacities and research and development centers in China. China is the only country to have such a large market volume at present, making possible com competition among so many global players in a single country. Moreover, several superb Chinese companies – including Jiangnan Jiajie, Kangli, Suzhou Shenlong, Shenyang Bolinte, Sanyang, Shandong Bester, and Xuchang XIJI – are growing rapidly. Production capacities are being expanded and the rate of technical progress is accelerating. By the end of 2007 more than 500 Chinese companies had been awarded a production license for elevators. Figure 2 shows the market shares of all the elevator firms. It is easy to see that the international concerns control more than 80 % of the market. Of these, Otis, Mitsubishi and Hitachi each continues to hold more than a 10 % market share. The production figures for individual elevator makers are: 27,000 by Shanghai Mitsubishi, 25,000 by Guang zhou Hitachi and 21,000 by Xizi Otis. This is the highest level in history and a new world record.

All the elevator manufacturers are working to achieve technical innovations and cost reductions so as to improve their own market competitiveness. The introduction of energy conservation and environmental protection policies by the central Chinese government has had several effects. Energy recovery, vibration and noise reduction and electromagnetic compatibility have drawn a great deal of attention within society and the appropriate technologies are spreading rapidly. In order to reduce costs, the production of elevator components is moving gradually toward specialization and standardization. European brands such as Sawella, Monteferro, Wittur and others, and domestic makes like Lingbo Shenling, Xinda, Shanghai Step, Hebei Dongfan, Changshu Tongrun and Zhangjiagang Runfa, are strongly supported by the elevator companies. Thus the basis for simplification of production in large companies has been achieved and, at the same time, the establishment and survival of small companies have been enabled.

Following up on the development of the elevator industry, the Chinese government is now requiring that the technical norms for elevators in China be aligned as closely as possible with international standards. That is why the exchange of information with and cooperation among the Technical Commission for Elevator Standardization in China (SAN/TC196), the International Organization for Standardization (ISO/TC178) and the European Standardization Committee (EN/TC10) are being increased. When working out technical standards for elevators, China will be adopting international standards and modern rules from the industrial countries, and the European norms in particular, as quickly and as extensively as possible.

To be seen by the numerous Chinese customers at the international elevator exhibition in Langfang are only the newest products marketed by the elevator industry. International elevator customers and dealers will also be able to obtain information on elevator-related products in China. With today’s globalization of the economy the Chinese elevator products – thanks to their high quality and low prices – are becoming ever more competitive on world markets. The Chinese elevator industry not only satisfies the continuously growing demand in its own country but also dispatches products to more than 100 other countries and regions. The development of elevator imports and exports in China is shown in Figure 3.

The first task to be handled by elevators as a means of conveyance is ensuring safety. GB7588 (Safety Rules for the Production and Installation of Elevators) and GB16899 (Safety Rules for the Production and Installation of Escalators) are equivalent to European standards EN81-1 and EN115. Their use has been mandated by the government. Chinese elevator buyers are very open to new technologies. But developing a new technology takes a relatively long time while imitating and spreading a new technology are rapid. That is why there is in the elevator industry in China adopting identical technologies has become a phenomenon – or at least a trend. Whenever technology and quality are similar, price becomes the decisive factor. Although the prices for homes and raw materials are both rising, the prices of elevators are falling in China. The companies will be forced to resort to every means available to reduce costs in every sector – manufacture, sales and management.

Excess production capacities result in fervent competition. The trend toward identical technologies will result in a price war. But competition reigns not only in regard to technology, quality and sales prices; competition is also found in regard to installation, commissioning and maintenance or after-sales service. In the eyes of the elevator companies the gigantic market volume for elevators in China represents great potential on the one hand but, on the other hand, a difficult competitive situation. In the absence of specific and unique strengths it is difficult for an elevator company to survive on the market. Ultimately, the elevator customers can profit from this. In China the buyer can select from the largest number of brands in the world, and of them the best products and service, all at the lowest prices. This is the real reason why ever more international elevator customers and traders are flocking to China.

(Translated from the Chinese into German by Mr. Hanan Wang and from German into English by Stewart Lindemann)