The market for elevator installation, maintenance, repair and modernization was roughly EUR 34 billion in 2008. The corresponding escalator market was around EUR 2 billion. The market for automatic building doors service amounted to roughly EUR 2 billion. In 2008, KONE’s share of the elevator and escalator market reached 13 percent.
| Elevators: new equipment, maintenance, modernizations |
EUR ~34 billion |
| Escalators and autowalks: new equipment, maintenance, modernizations |
EUR >2 billion |
As the year progressed, the overall market situation became increasingly difficult in the new equipment markets due to the financial environment. The new equipment demand declined in most countries at the end of the year because of financing difficulties and overall increasing uncertainty. Towards the end of the year, the negative development in the world economy somewhat delayed decision making in modernization. Maintenance markets continued to develop strongly.
In the European, Middle East and African region (EMEA), the business environment was quite favorable in most markets with the exception of Southern Europe in the beginning of 2008. The business environment became more and more demanding also in the North European market towards the end of the year. In the United Kingdom, which was a very active market in the beginning of 2008, both the residential and commercial markets weakened strongly towards the end of the year. Also in Russia, demand declined sharply during the second half of the year. The best demand in 2008 was seen in the Middle East, but at the end of the year, the situation in the United Arab Emirates changed rapidly. The overall Southern European residential market activity continued to decline in Italy, France and particularly in Spain. The commercial and hospital sectors however grew somewhat. Modernization demand continued to grow, mainly driven by the European Safety Norms for Existing Lifts (SNEL) and the need for upgrades, due to the aging of the equipment base. Demand weakened somewhat towards the end of the year due to the uncertainty in the economy.
While faced with a broad economic slowdown, the Americas market still provided growth opportunities for KONE. The new equipment market decreased year on year in the United States, nevertheless, the deterioration in the market did not prevent KONE to grow in the market. The modernization activity stayed at a relatively good level and the maintenance market also continued to develop well. In Canada, the construction market was rather resilient, while Mexico’s construction market followed market trends in the United States.
In the Asia-Pacific region, good growth driven by urbanization continued, even though investment decisions were becoming slower in most markets. Also in China, the new equipment market growth weakened towards the end of the year. However, at the end of 2008 the central and local governments initiated fast supporting actions to revive the market. In India, the market activity suffered somewhat from high interest rates and cost inflation during the end of 2008. In Australia, the market shifted between residential and commercial demand, ending with some market growth compared to 2007.