The global forklift market is experiencing notable shifts in 2025, influenced by varying regional growth patterns, ongoing changes in electrification adoption, and the implementation of new US tariff policies. Drawing on the June 2025 mid-year forecast update from Interact Analysis, we examine the key factors affecting the competitive environment and the strategic approaches being adopted by major manufacturers, including the continued international expansion efforts of Chinese companies.

Regional divergence in growth trajectories

Market forecasts for 2025 reveal a clear geographical divergence. Expectations have been downgraded for North America and South Korea, reflecting persistent economic headwinds and policy uncertainty. Conversely, Europe (excluding those markets that have been experiencing specific challenges), Japan, and Southeast Asia have seen upward revisions in their forecasts, driven by accelerating industrial automation and supply chain restructuring. China and Oceania remain stable, with China’s massive domestic market (~800,000 units annually) now firmly in a replacement-driven plateau phase.

Deep dive into the factors driving divergence:

North America High costs suppress demand

• Interest rates and tariffs: The Federal Reserve’s sustained high interest rates have caused an increase in corporate financing costs. Additionally, the US tariffs on forklifts from China (with some models facing a rate of up to 25%) have weakened the price advantage of Chinese brands.
• Manufacturing Weakness: North America’s forklift utilization rate has dropped to 46.9% (as of January 2025), with a 12.6% month-on-month decrease in operating hours, reflecting a contraction in productivity.

Europe and Japan: The effects of the green transition

• European environmental policies: The EU’s “Green Industry Plan”, demanding zero-emission logistics equipment by 2030, is predicted to drive the penetration rate of electric forklifts from the current 40% to 60%. Chinese brands, leveraging their lithium battery technology (such as BYD’s Blade battery), are capturing market share.
• Japanese industrial upgrading: The expansion of semiconductor and new energy vehicle production chains is fueling demand for high-precision automated guided vehicle (AGV) forklifts. For example, Hangcha has collaborated with a Japanese robotics firm to develop intelligent logistics solutions.

Southeast Asia: Twin engines of infrastructure and E-commerce

• Infrastructure Projects: The construction of Indonesia’s new capital and the expansion of Vietnam’s ports are stimulating demand for heavy-duty forklifts. Exports of supporting equipment for China’s “Belt and Road” projects have increased by 30%.
• E-commerce Penetration: With platforms like Lazada and Shopee expanding their warehouses, demand for electric pedestrian forklifts (Class III vehicles) is growing at a rate exceeding 20%.

China and Oceania: Intrinsic resilience supports stability

• China’s Policy Buffer: The manufacturing purchasing managers’ index (PMI) has remained above the 50 mark indicating growth for five consecutive months, and subsidies for equipment upgrades in state-owned enterprises are offsetting the impact of the weak real estate sector.
• Oceania’s Structural Balance: In Australia, a 5% decline in forklift demand from the mining sector is offset by a 15% increase in demand for electric forklifts in cold chain logistics.

Electrification: Progress amid regional variations

The transition towards electric power sources continues but varies from region to region and there is significant divergence in Class 3 lithium-ion adoption. While adoption progresses in Europe and Asia, the North American market has seen a notable slowdown in the Class 3 (electric warehouse trucks, including pallet jacks and stackers) market. Factors such as high interest rates are affecting fleet investment decisions and companies are focusing on immediate cost savings over long-term total cost of ownership (TCO). However, the shift from diesel to electric in counterbalance trucks remains a steady and sustained global trend, mainly due to lower operating costs and more stringent emissions regulations.

Short-term dynamics: Signs of stabilization emerge

• After a prolonged period of inventory digestion lasting over a year (evident in declining order growth since 2022-2023), the global market is showing tentative signs of stabilization:
• Order Recovery: A critical signal emerged in Q4 2024-Q1 2025, with industry giants Toyota and KION reporting a~9% quarter-on-quarter increase in order backlogs. This suggests channel inventory drawdown is nearing completion.
• Potential Catalysts: A recovery in Chinese manufacturing PMI and subsequent overseas channel restocking could fuel a demand rebound in late 2024/2025.
• Good Profitability Outlook: Favorable conditions persist for manufacturers. Low and stable domestic raw material costs in China, coupled with a growing proportion of higher-margin overseas revenue (boosted by forex benefits), support expectations for sustained robust profit margins through 2025.

Long-Term Growth Engines: Li-ion, Aftermarket & Strategic Shifts

Beyond the immediate cycle, three key drivers underpin the long-term outlook:

• Lithium-ion Penetration: Vast headroom remains. Despite progress, the 2024 global penetration rate of Li-ion counterbalanced forklifts was only 17.5% , suggesting that a replacement cycle likely lasting a number of years lies ahead for Li-Ion as it gradually displaces diesel and lead-acid alternatives.
• Aftermarket Expansion: Forklifts exported during the peak surge which started in 2021 are now aging. This creates a burgeoning opportunity for parts, maintenance, and service revenues, forming a crucial secondary growth pillar as new equipment sales growth potentially moderates.
• US Tariff Impact & Mitigation: While US tariffs pose a challenge, the overall risk appears contained:
  Market Exposure: The US represents ~12% of global unit volume but a more significant ~18% of global market value due to higher ASPs.
  Chinese Resilience: Leading Chinese players HELI and Hangcha have minimal direct US export exposure (with revenue % shares in the single digits) and have implemented pre-emptive stockpiling. Furthermore, US demand for electric trucks is intrinsically weaker than in Europe, the core focus for Chinese electric exports.

The Impact of US Tariffs: Immediate Reactions and Strategic Adjustments

The introduction of substantial US tariffs in April 2025 led to immediate market responses:

• Initial Hesitation: Customers adopted a cautious stance, requesting production halts and shipment delays.
• Grace Period Surge: Once a tariff grace period was negotiated, there was a significant increase in “rush shipments” as importers aimed to bring in goods before the tariffs fully came into effect.
• 2025 Projection: A moderate decrease in shipments from China to the US is anticipated for 2025, although not a drastic decline. The pre-tariff stockpiling and rush of shipments are expected to mitigate the immediate impact.
• The impact of US tariffs for Chinese exports varies dramatically across forklift segments:
  Class 1 & Class 4/5: High impact. Historically, the price gap between Chinese imports and established brands (e.g., Toyota, Crown) in the US was relatively narrow. Tariffs severely erode the cost advantage, making imports significantly less competitive.
  Class 2: Significant impact. This segment faces intense competition from US manufacturing powerhouses Crown and Raymond. High tariffs eliminate the landed cost advantage of Chinese imports, making domestically produced options the clear choice for most US buyers.
  Class 3.1: Minimal impact. Chinese brands dominate this segment in the US with a monopoly-like market share. Key competitors show limited focus here. The substantial inherent cost/performance advantage of Chinese class 3.1 trucks means they remain essential for US buyers even after tariffs. Demand is expected to hold relatively firm.

Beyond 2025, tariffs are fundamentally reshaping the global investment strategies of Chinese manufacturers:

• North America (Strategic Pause): High tariffs, coupled with visa restrictions and geopolitical friction, have led Chinese firms to freeze new capital investment in the US. Existing operations (sales, service) will be maintained, but expansion is on hold.
• Southeast Asia (Manufacturing Hub Acceleration): Investment is shifting dramatically towards establishing local manufacturing bases (beyond existing sales centers). This mitigates tariff risks, and leverages regional trade agreements and lower costs.
• Europe (Deepening Commitment): Investment continues robustly, focused on expanding sales and rental networks, establishing larger operational hubs, and (crucially) building R&D centers. This aims to absorb European engineering talent and address product gaps in the demanding high-end market.
• Japan/Korea (Emerging Focus): Initial steps are being taken to build stronger sales and service networks, recognizing the need for enhanced local presence in these sophisticated markets.

Final thoughts

The 2025 forklift market is characterized by significant strategic adjustments. In the short term, manufacturers are focused on managing the final stages of the inventory cycle and maintaining current profitability levels. For the longer term, key strategic priorities that are emerging include regional diversification and targeted product strategies. Chinese manufacturers in particular are shifting their global investment focus and reducing reliance on direct investment in the US market, which is affected by tariffs, while increasing investment in Europe and Southeast Asia. This increased investment involves establishing localized manufacturing, enhancing service capabilities, and acquiring technology.

To find out more about the latest Interact Analysis Forklifts market report contact Maya Xiao, Research Manager.