France Elevator and Escalator - Market Size and Growth Forecast 2024-2029

MARKET OVERVIEW

The France elevator and escalator market by new installations accounted for 15.7 thousand units in 2023 and is expected to reach 18.6 thousand units by 2029, growing at a CAGR of 2.94% during the forecast period. The aging building stock and need for maintenance, modernization, and cybersecurity, as well as increasing investments in infrastructure and foreign investment, are long-term demand drivers for the France elevator and escalator market.

Grand Paris Project and the Aging Population Are a Few Driving Factors for the France Elevator and Escalator Market

·       As of January 2024, approximately 21.5 percent of residents aged 65 or over, while 10.4 percent were above 75. France is more or less in line with the average across the EU, where 21.1 percent of residents were over 65 in 2022; this figure will increase to 31.3 percent within the next 80 years.

·       By 2030, the Grand Paris Express will include more than 200 kilometers of additional metro lines and 68 new stops. The 68 new stations will be surrounded by new neighborhoods, allowing the city to be reinvented on an existing urban fabric. Following consultations such as "Reinventing Paris," "Reinventing the Seine," and "Inventing the Metropolis of Greater Paris," requests for creative projects have been made to shape the profile of a more open and modern Île-de-France.

·       As the senior population is projected to increase to over 21 million by the next decade, with the majority intending to age in their own homes, the need to adapt housing becomes paramount. MaPrimeAdapt', introduced by France Silver Eco, facilitates housing adaptation for aging individuals, preventing loss of autonomy. For this policy to achieve economic neutrality, it must adopt a minimum of 2.3 million housing units annually in ten years, translating to a progressive growth in new adapted housing units. MaPrimeAdapt' replaces three existing forms of assistance and targets individuals aged over 70, those aged 60-69 with loss of autonomy, and individuals with disabilities or eligibility for disability benefits. The grant covers up to 70% of expenses for those with very modest incomes and up to 50% for those with modest incomes.

Paris 2024 Concept, France 2030, and Infrastructure Projects to Boost the Demand for New Installations

·       The France 2030 investment plan aims to achieve a dual objective: sustainably transforming key sectors like energy, automotive, aeronautics, and space through technological innovation and positioning France as a leader in the global landscape of the future. With a €54 billion($58.5 billion) investment, France 2030 supports the entire innovation lifecycle, from basic research to product industrialization.

·       The France 2030 plan has gathered investor interest, featuring 559 projects spanning key automotive, healthcare, mechanical equipment, and agriculture sectors. Foreign investments targeting decarbonization, digitalization, and technology partnerships contribute to France's appeal as a strategic investment destination. Notably, 205 investment projects focusing on decarbonization underscore France's commitment to environmental priorities, with a significant portion originating from various European countries and the United States, Germany, and the United Kingdom leading in project numbers.

·       The Paris 2024 concept will bring into play the whole Ile-de-France, particularly the Seine-Saint-Denis department to the north. Here, it will build an aquatic center and 5,000 housing units, which will be used throughout the games as the Olympic and Media Village. The new constructions will go part way to addressing the need for 70,000 additional homes in Ile-de-France. The project is expected to support the France elevator and escalator market growth.

·       The various infrastructure projects taking place in France, such as the Zac Campus Grand Parc Mixed-use Development, The Link Tower, Paris Tour Triangle High-rise Building, Clermont Ferrand Gabriel Montpied Stadium Expansion, and Yves-du-Manoir Stadium Renovation, collectively contribute to driving the demand for elevators and escalators in the country.

Quarter of Installed Elevators Above 40 Years Old Create Demand for Maintenance of Elevators in France

·       The French Elevator Federation reports an average of three technical breakdowns per elevator annually, with over a third experiencing no breakdowns. Inadequate maintenance, usage, or modernization contribute to the majority of breakdowns. Modernization efforts are imperative, with nearly a quarter of elevators over 40 years old and half over 25 years old.

·       Renovating old elevators, particularly those over twenty-five years old, can significantly reduce energy consumption by up to 65%, from an average of 3,400 kWh to 1,190 kWh annually. This reduction, along with the development of new elevator designs consuming five times less energy than those from the 1960s, aims to achieve energy autonomy, according to the Elevator Federation.

·       In the fourth quarter of 2023, maintenance and improvement prices for buildings moderately increased, with a more significant rise observed in the non-residential sector compared to the residential sector. Notable increases were recorded in activities such as "other construction installation," electrical installation, and painting and glazing, while prices declined in joinery installation during this quarter.

KEY HIGHLIGHTS

·       According to insights from major market players, the service market, particularly maintenance and modernization, is expected to significantly drive the France elevator and escalator market in the forthcoming years. This is projected alongside a slower growth rate and a potential decline in new installations during the forecast period. The primary reason for this trend is the prevalence of older buildings throughout France, many of which do not currently have elevators installed or only have a small elevator that can fit one or two people. Furthermore, the limited space available in such buildings often restricts the installation of only smaller elevators.

·       In 2020, France had 2,467 urban units, totaling 52.9 million inhabitants, or 79.2% of the French population. The urban unit of Paris alone has 10.8 million inhabitants or 16.2% of the French population. Excluding Paris, France in 2020 had 35 urban units with more than 200,000 inhabitants, totaling 16.8 million inhabitants, or 25.1% of the French population and 31.8% of the total urban population.

·       In 2023, France attracted 1,815 international investment projects. 558 projects of France's 2030 plan are focused on key sectors such as automotive, healthcare, and agriculture. These investments, driven by decarbonization, digitalization, and technology partnerships, underscore France's appeal as a strategic investment destination. Notably, 205 projects focusing on decarbonization reflect France's commitment to environmental priorities, with major contributions from European countries and leading nations like the United States, Germany, and the United Kingdom. These initiatives generate demand for energy-efficient elevators as sustainable building practices gain prominence, prompting elevator manufacturers to offer eco-friendly solutions to align with France's environmental objectives.

·       Fouad Ben Ahmed, co-founder of Plus Sans Ascenseurs, warns of increasing SIM card thefts in Île-de-France elevators. The trend, starting small in Hauts-de-Seine, has now become widespread. Despite pleas for action, public authorities remain unresponsive, prompting concerns over elevator security. Elevator professionals, supported by the Elevator Federation, are working with telecom operators to address the issue. Elevator security systems are crucial for high-rise and multi-tenant buildings, as they prevent unauthorized access, enhance safety, and reduce operational expenses.

·       Aubervilliers Public Housing Office (OPH) notes that 80 out of 150 elevators recently had their SIM cards stolen, inconveniencing elderly individuals and others with mobility challenges. To address this issue, OPH has switched to using NTM cards, which are single-use and rendered useless once inserted into a smartphone, leading to declining vandalism incidents.

·       The French Elevator Federation reports an average of three technical breakdowns per elevator annually, with over a third experiencing no breakdowns. Inadequate maintenance, usage, or modernization contribute to the majority of breakdowns. Modernization efforts are imperative, with nearly a quarter of elevators over 40 years old and half over 25 years old.

·       The workforce shortage in the Île-de-France region exacerbates the situation, considering the area's needs and demographic shifts. Ideally, one technician should oversee no more than 90 elevators, yet in Île-de-France, a technician may be responsible for up to 170 or even 200 elevators, especially on weekends.

·       Plus Sans Ascenseurs co-founder attributes this shortage to the profession's lack of exposure. Efforts are underway to address this issue, with plans to establish specialized BTS programs in Île-de-France, currently under consideration in Eaubonne and Champigny.

MARKET DRIVERS & OPPORTUNITIES

·       Infrastructure projects in the region contribute to the growth of the France elevator and escalator market, bolstered by initiatives like the France 2030 investment plan to boost investments in the vertical transportation market.

·       Increasing foreign investment in France further drives demand for elevators, while elevator manufacturers are reintroducing assistance programs to support elevator renovation efforts.

·       The extensive Grand Paris project, spanning over 20 years, is a significant driver for the France elevator and escalator market.

·       The need for digitization and cybersecurity in elevators is emphasized due to incidents like the theft of SIM cards in France, prompting manufacturers to focus on enhancing security measures.

·       The aging population's increased demand for elevators and escalators in buildings underscores the necessity for housing renovation to facilitate the modernization of vertical transportation systems, supporting the growth of the French elevator and escalator industry.

INDUSTRY RESTRAINTS

·       Rising maintenance costs result in customers being overcharged. At the same time, labor shortages and skills mismatches pose challenges to the construction industry, leading to lengthy repair times and shortages of experienced workers and components.

·       Anticipated rapid declines in the real estate market in France in 2024 amid economic shifts highlight the need for strategic planning and adaptation within the vertical transportation industry.

VENDOR LANDSCAPE

·       The key players in the France elevator and escalator market are KONE, Otis, Mitsubishi Electric, Schindler, Hyundai Elevator, TK Elevator, and Hitachi, Köhler.

·       The top 4 prominent vendors in the France elevator and escalator market, including KONE, Otis, TKE, and Schindler account for 60% of the market share in France.

·       KONE is collaborating with Louvre Hotels Group, Europe’s 2nd-largest hotel group and a subsidiary of Jin Jiang International, to equip the first smart hotel in Europe with the “SMART INSIDE” label in Lyon, France.

Recent Developments in the France Elevator and Escalator Market

·       In February 2024, Assa Abloy sold its PACA Ascenseurs elevator maintenance division in France to KONE, as announced on February 2. PACA, acquired as part of Assa Abloy's purchase of Agta Record in 2020, had an estimated sales figure of approximately EUR30 million (US$32.6 million).

·       Otis plans to modernize vertical transportation equipment at two iconic structures in the Europe, Middle East, and Africa (EMEA) region: the Burj Khalifa in Dubai and the Eiffel Tower in Paris. Otis to upgrade elevators and escalators at the Burj Khalifa and modernize the dual lifts at the Eiffel Tower, extending its service agreement for another decade in Q1 2024.

• In Q2 2023, RATP Maintenance Services (RMS) and the AKE Europe consortium unveiled their inaugural escalator project in France for Saint-Cloud. This escalator, a product of collaboration between RMS and AKE, is tailored for high-traffic areas and restrictive spaces and provides access to a train station. SM PRO-MONTAGES facilitated the handling services for this project.