If Clemens Fuest’s intuition can be trusted, Germany could be up for a “golden” 2017 after business sentiment reached a two-year high in the lead-up to the IAA Commercial Vehicle Show in Hanover last month.
As President of the country’s Ifo Institute for Economic Research, a widely regarded think tank based in Munich, Fuest has a unique hold on the state of Europe’s largest economy and wouldn’t make such a prediction lightly – indicating that German businesses must have digested June’s Brexit shock surprisingly well, at least for now, and are looking to the future once more.
The result is a marketplace bustling with ambition and energy that is attracting competition from far and wide, turning Germany into a fiercely contested battleground for the crisis-withered transport equipment industry.
Amid the buzz, the name of one Bavarian family business, Humbaur, is rapidly gaining in popularity. Hitherto known for the manufacture of car licence-friendly light and medium-duty equipment, the €450 million company is now increasingly embracing the heavy-duty segment – and with it the role as sister company to Kögel, Germany’s third largest trailer manufacturer.
With an aggregate production volume of close to 60,000 units between 750kg and 50 tonnes in the 2015-16 season, the two businesses would make for Germany’s largest trailer OEM and even outshine the nation’s best-selling brand, Schmitz Cargobull, by some 20 per cent.
Unsurprisingly, Ulrich Humbaur – the undisputed patriarch behind the organisation – has a vested interest in the duo working together closely and taking a public stand for his family name. Too big are the business opportunities presenting themselves in a reinvigorated Germany, too promising the synergies that may emerge from proactively embracing the companies’ family ties.
That new ‘family’ mindset recently became evident when Humbaur hosted European Union official, Günther Oettinger, in Hanover to promote the environmental and economic benefits of extending the standard length of a European semi-trailer to 14.9m. Albeit set up as a marketing ploy, the tête-à-tête quickly evolved into a passionate plea for more progressive regulation throughout the Union – with a Kögel-branded truck model taking centre stage in the Humbaur section of the sister companies’ joint stand.
It may have been just a coincidence, but the scene encapsulated the very essence of the budding new philosophy at Humbaur. A philosophy that will see synergies sprawl behind the scenes as the two incumbent – and still independently acting – businesses flex their joint manufacturing muscle in an increasingly globalised marketplace.
The driving force behind it all is Ulrich Humbaur himself. With a vision to contribute to the wealth of his staff and the German economy at large, he joined the family business in 1982 to work alongside his father, Anton, who started out importing agricultural machinery from Italy in 1957. In his time as CEO, Humbaur managed to gradually streamline the company’s product range to focus solely on the manufacture of light-duty trailing equipment, before stirring up the market in 2004 with the surprise presentation of a Humbaur-branded low loader range. The company has since upheld a small, highly specialised heavy-duty division, too – sharing a chassis production facility in Chocen, Czech Republic, with sister brand, Kögel.
Making its home in Augsburg, a medieval city some 50km east of the Kögel factory in Burtenbach, Humbaur acquired the then-struggling brand in 2009 in a move to avoid it being taken over by a Chinese multi-national: “Part of the motivation certainly came from wanting to keep a strong German brand with a rich regional tradition alive and well. Kögel is one of the oldest manufacturing businesses for transport equipment in Europe – and certainly the one with the most captivating history, so I had to act.
“But, of course there was an economic element to it too. We had only just started venturing into the heavy trailer market and were in the midst of construction of a dedicated manufacturing facility, so it seemed fitting to take on the Kögel brand and all the know-how and competence that came with it.”
Under Humbaur’s guidance, Kögel was restructured to focus on to two core divisions – line haul and construction. Arguably the most important move of the Humbaur era, though, was the inclusion of a competence centre for sandwich panels into the Kögel network. Now trading as Kögel PurFerro, the Duingen-based centre was acquired to in-source the competence needed to expand Kögel’s on-highway portfolio. According to Humbaur, having access to a self-developed sandwich panel and the resulting launch of a refrigerated product line was key to Kögel’s current success.
Ever since, the patriarch says “project” Kögel has gone exactly to plan. “It’s a genuine post-GFC success story. Since 2009, we were able to hire some 150 new staff as revenue and sales tripled – much of it due to bringing PurFerro into the fold.”
Humbaur says the move into sandwich panel production not only gave Kögel a boost, but also created new synergies between the Burtenbach-based brand and the existing Humbaur production. “It’s fascinating to see these kind of interactions evolve across the organisation,” he explains – pointing out that Kögel’s rapidly expanding European footprint has given the family business a distinct international edge. “However, it’s important to point out that the two are still separate businesses, with me being the living, breathing connecting piece in between. I love growing the business and creating new jobs in the region, and to do so, I naturally need to take on a big picture view.”
With competition heating up in the German trailer market – Polish company Wielton, Austrian OEM Schwarzmüller and Turkish-owned Kässbohrer are all pushing for the number three spot Kögel has been occupying for so long – Humbaur says maintaining a “wide-angle perspective” will be vital to his company’s survival. “But that’s still no reason to hit the panic button. Healthy competition can be good for business, especially in a saturated market like the European one. During the first half of 2016, Kögel’s order intake has reached a ten-year high, which goes to show we’re doing something right.”
He adds, “We need to take on a European perspective just as much as international businesses push into Germany, so it’s not a single front conflict. We’re the number three brand in Europe – that’s a powerful value proposition in itself.”
According to Humbaur, the ‘made in Germany’ label is an important selling point on the international stage – but to him, Kögel and Humbaur’s true USP is the passion that goes into every build.
“I’m not overly esoteric, but I believe that you can genuinely sense the passion we invest into every project, the individual’s commitment to perfection. And that’s also true for myself. For us, quality isn’t just a word. It’s a promise. As the man behind both businesses that means it’s my personal promise too – and I take it very seriously.”