Germany Material Handling Market - Strategic Insights and Forecasts (2023-2028)

The German material handling market is expected to grow at a CAGR of 4.07% from US$12.554 billion in 2021 to US$16.599 billion in 2028.

Material handling encompasses the tasks of moving, safeguarding, storing, and managing materials and products across manufacturing, warehousing, distribution, consumption, and disposal. This process involves an array of manual, semi-automated, and automated tools and systems to facilitate logistics and enhance supply chain efficiency. Businesses implement material handling systems and procedures to enhance customer service, minimize inventory, expedite deliveries, and decrease overall handling expenses in manufacturing, distribution, and transportation.

The German material handling industry is characterized by strong consolidation and intense competition. Key players operate both in regional and global markets and employ diverse strategies to expand their market share. Some of the prominent competitors in the industry are Daifuku Co., Ltd., KION, and others.

Driving factors for the German material handling market

The increasing growth in Germany's material handling market can be attributed to several key factors. Firstly, the improvement in economic conditions has ignited increased investments in the construction sector, aligning with the evolving consumer spending patterns Moreover, Germany is renowned for its manufacturing prowess and boasts a robust industrial foundation. As the need for automation grows, companies are continuously striving to enhance operational efficiency, lower labor expenses, and boost productivity. Automation contributes to quicker and more precise material handling procedures, facilitates optimal resource allocation, enhances overall operational performance, and minimizes the potential for human errors.

Germany’s automotive sector is further fueling the market

Germany's robust automotive sector, home to numerous prominent automakers and suppliers, necessitates efficient and automated material handling solutions for the handling of various components, parts, and finished vehicles across their manufacturing plants, storage facilities, and distribution centers. The demand for automated material handling equipment in the industry is driven by the need to enhance supply chain efficiency and minimize lead times. For example, in February 2021, Daifuku Co., Ltd. ("Daifuku") and AFT Industries AG, a Germany-based company ("AFT"), formalized an agreement to create a business partnership to capitalize on their expertise in material handling within the automotive sector. Both Daifuku and AFT plan to leverage this mutually beneficial business alliance to establish a global presence, facilitating the German material handling market reach and meeting the rising demand and investments from automotive manufacturers seeking advanced material handling solutions

Rising labor costs in the nation

The cost of labor per hour worked is a vital metric for gauging how the German material handling market affects the market. The German material handling market expansion is attributed to the escalation of labor expenses and workforce shortages. This situation has led businesses across different sectors to invest in automated technology as a cost-saving alternative to manual labor. These solutions significantly reduce the reliance on human labor for swift product handling, allowing industries to accomplish diverse tasks with fewer workers needed to operate machinery. For instance, in January 2022, Toyota Material Handling unveiled 22 new electric products, expanding its impressive range of material handling solutions. This significant product launch positions Toyota to provide customers with top-tier material handling solutions. According to the data from the Federal Statistical Office (Destatis) reveals a notable increase in labor costs in Germany. In 2022, employers in both the industrial and service sectors paid an average of 39.50 euros per hour worked, reflecting a significant rise compared to the previous year's average of 37.30 euros per hour. This upward trend suggests a substantial increase in labor expenses within the German economy during 2022.

Growth in utilization in the manufacturing industry

The automotive and construction manufacturing industry is booming at this moment in Germany. Material handling machines are of significant use for taking goods from one place to another. Many housing projects have been granted by the government in recent years, as the German government plans to take the initiative to increase housing projects in the country. For instance, according to the Statistisches Bundesamt (Destatis), in January 2023 21,900 dwelling projects were permitted in Germany compared to 24,500 projects were permitted in March 2023. Hence with the increasing need for material handling in construction sites, the market for material handling machines is expected to grow in Germany. Strategic collaborations and mergers are happening in the German material handling industry which can be one of the reasons for market growth in the projected period. For instance, in September 2023, Jaungheinrich headquartered in Hamburg, Germany in collaboration with Mitsubishi Logisnext America launched the Rocrich AGV solution. The product is in line with Mitsubishi Logisnext America’s and Jaungheinrich’s commitment to bringing next-generation products for logistic material handling. Therefore, in the forecasted period many such products are expected to be launched providing an edge for Germany's material handling market growth.

Rising focus on automotive manufacturing

According to the International Organization of Motor Vehicle Manufacturers, the automotive manufacturing industry is also growing in the country. One of the reasons for this increased production can be many major market players for car manufacturing such as Mercedes-Benz, Bayerische Motoren Werke Aktiengesellschaft GmBH (BMW), and Audi all are headquartered in Germany. Hence, car production in Germany reached 36,77,820 in 2022, up from 33,08,692 a change of 11% within a year. These automotive manufacturing material handlers help in concentrating on refining the assembly process and minimizing turnaround time. Hence, in the forecast period, the German material handling market is anticipated to grow at a significant pace due to the increasing growth of various end-user segments.

Market Key Developments

• In November 2022, KION Group is enhancing its presence in Reutlingen, Germany, by undertaking an expansion of its facility. As a renowned provider of warehouse automation systems, software, and lift trucks, the intralogistics group is making a substantial double-digit million Euro investment in this project, with the goal of it becoming operational by 2025.

• In May 2022, a partnership was announced between ek Robotics GmbH, a prominent manufacturer and system integrator of cutting-edge automated guided vehicles (AGVs) for production and warehouse logistics in Germany, and OTTO Motors, a leading developer of adaptable and intelligent autonomous mobile robots (AMRs). This partnership was unveiled at LogiMAT in Stuttgart.

Germany Material Handling Market Scope