Industrial Equipment / RoboticsMulti-region
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JOURNEY · DETAIL
KONE: How a Finnish Motor Repair Shop Overcame the Odds to Become the Global Elevator King and Navigated Market Cycles Through Maintenance Subscriptions
Founded: Harald Herlin · KONE Oyj
JOURNEY
Key Fields
FIELD STAMPSIndustryIndustrial Equipment / Robotics
RegionMulti-region
ScaleGiant
ChannelOther
Origin
Founded in Helsinki, Finland, on October 27, 1910, KONE began as a secondhand electric motor renovation workshop under the motor manufacturer Strömberg ('kone' means 'machine' in Finnish). In its early days, KONE survived by acting as an agent for the installation and sales of elevators from Sweden's Graham Brothers. Following Finland's independence in 1917, the agency agreement was terminated, forcing the company to pivot in 1918 toward the independent R&D, manufacturing, and installation of elevators, transitioning from a trade agent into a manufacturer. In 1924, entrepreneur Harald Herlin acquired KONE from Strömberg. Since then, generations of the Herlin family have steered the company, steadily building a small Nordic workshop into a global elevator market leader that eventually surpassed Otis through maintenance subscriptions and strategic M&A.
Milestones
1910
Inception Growth
Founded on October 27, 1910, in Helsinki, Finland, KONE was initially a secondhand electric motor refurbishment workshop under motor manufacturer Strömberg. The name 'Kone' means 'machine' in Finnish. Ranging from team size to business volume, it was merely a workshop-level operation surviving by repairing old motors.
1917
Agency Termination Turning Point
Initially surviving by acting as an agent for Sweden's Graham Brothers elevator sales and installation, KONE faced the termination of the agency agreement following Finland's independence in 1917. The agency business collapsed overnight, forcing the company to pivot in 1918 toward independent R&D, manufacturing, and installation, transforming from a trade agent into a manufacturer. This step laid KONE's industrial DNA, spanning the 1917-1918 period.
1924
Family Takeover Transition
In 1924, entrepreneur Harald Herlin acquired KONE from Strömberg. Subsequently steered by multiple generations of the Herlin family, including Heikki H. Herlin and Antti Herlin, the small repair shop was developed into a renowned Nordic elevator manufacturer. The family's long-termism became the source of strategic resilience enabling the company to navigate market cycles.
1960
Capacity Expansion Growth
Following World War II, KONE significantly expanded its production capacity and industrial manufacturing capabilities to fulfill war reparation orders for the Soviet Union. It subsequently launched cross-border acquisitions in European and global markets, upgrading from a regional Nordic player to an international manufacturer and building the manufacturing foundation for future head-to-head competition with global giants like Otis.
1996
Technical Innovation Turning Point
In 1996, KONE introduced the world's first machine-room-less (MRL) elevator, MonoSpace, along with the EcoDisc gearless hoisting machine. This eliminated the traditional machine room space required by conventional elevators, drastically saving architectural space and energy consumption costs. It marked a milestone technological revolution that carved out a breakthrough in a global market long dominated by Otis.
1996
Entering China Growth
In 1996, KONE registered and established KONE Elevator Co., Ltd. in Kunshan, Jiangsu Province, marking the starting point of its deep cultivation in China. The Kunshan industrial park subsequently developed into KONE's largest global production base and core overseas hub, making the Chinese business the group's second growth engine outside Europe.
2010
Servitization Transformation PMF
Faced with the reality of new elevator market volatility driven by real estate cycles, KONE shifted its long-term strategic focus toward maintenance subscriptions and modernization. By locking in a massive existing building portfolio through long-term preventive maintenance contracts and introducing IoT remote monitoring and mobile dispatching early on, the company upgraded its service from reactive repairs to proactive prevention, establishing stable cash flow to weather market cycles and executing the critical leap to surpass Otis.
2024
Scale Validation Growth
In 2024, KONE Group's annual net sales reached 11.1 billion euros, with global employees exceeding 60,000, and its class B shares listed on Nasdaq Helsinki. KONE China's annual revenue surpassed 20 billion RMB, and the Kunshan base continuously expanded production, establishing China as one of the core pillars of the group's global strategy.
2026
M&A Supremacy Turning Point
On April 29, 2026, KONE announced the acquisition of Germany's ThyssenKrupp Elevator for 29.4 billion euros (approx. 34.4 billion USD) in cash and shares, executing a counter-cyclical move when global real estate cooled and new elevator demand in China declined. The combined entity boasts annual revenues over 20 billion euros, 3.2 million maintenance units, and over 100,000 employees, seizing the top global ranking and completely reshaping the landscape of the elevator industry.
Turning Points
- Forced pivot to independent manufacturing after the 1918 agency agreement termination, shifting from trader to manufacturer and laying the foundation for KONE's century-long industrial capabilities.
- Harald Herlin's acquisition of KONE in 1924, where the family succession granted this small repair shop cross-cycle strategic continuity.
- The 1996 launch of the MonoSpace machine-room-less elevator, restructuring building cost structures through technological innovation and piercing the Otis-dominated global market.
- Shifting strategic focus from selling new elevators to maintenance subscriptions and modernization, using recurring revenue to hedge against property cycles and ultimately surpassing Otis.
- The 2026 acquisition of ThyssenKrupp Elevator for 29.4 billion euros, moving the industry from oligopolistic competition into a new landscape with KONE at the top.
Failures & Pitfalls
- Finland's independence in 1917 led to the termination of the Graham Brothers elevator agency agreement, causing the pure agency model to collapse overnight and forcing the company to embark from scratch on self-developed manufacturing.
- New elevator sales were long tightly coupled with real estate cycles. Amid global property cooling and declining demand for new elevators in China, a business model reliant on one-time elevator sales experienced severe revenue volatility, serving as the direct catalyst for KONE's pivot to maintenance subscriptions.
- For a long time, the global elevator market was dominated by traditional US giants like Otis. As a latecomer from the Nordic region, KONE long lagged in new elevator market share and brand voice during its early stages.
关键成功要素
- Turning maintenance into long-term subscription contracts, locking in high-retention customers via the existing building portfolio to secure recurring cash flow capable of weathering real estate cycles.
- Early adoption of IoT remote monitoring, round-the-clock early warnings, and mobile dispatching to upgrade maintenance from reactive call-outs to proactive prevention, building service reputation by minimizing downtime.
- The dual technological innovations of the MonoSpace machine-room-less elevator and the EcoDisc gearless hoisting machine directly rewrote industry product standards, serving as hard currency for opening up global markets.
- Five generations of the Herlin family steering the helm to maintain long-termism, daring to make counter-cyclical M&A moves during property downturns, with the 2026 acquisition of ThyssenKrupp being the latest proof.
- Betting on China in 1996, allowing the Kunshan base to grow into the world's largest production base, with KONE China's annual revenue exceeding 20 billion RMB to become one of the dual engines of globalized growth.
Lessons
- A manufacturing enterprise's long-term moat lies not in hardware sales, but in service subscriptions and maintenance contracts covering the entire equipment lifecycle.
- Competing against giants in mature markets requires disruptive product innovation rather than head-on price wars.
- A business model reliant solely on new elevator sales will inevitably be hijacked by property cycles; servitization and globalization are the two legs required to hedge against volatility.
- Industry troughs are often consolidation windows; acquiring high-quality assets at lower valuations can rewrite competitive positioning overnight.
- Digital capabilities must directly translate into quantifiable customer value, such as reduced downtime, otherwise they remain mere concepts.
Core Data
- 2024 Group Net Sales：11.1 billion euros (Company disclosed figure as of 2026, unverified independently)
- Global Employees：Over 60,000 (Company disclosed figure as of 2026, unverified independently)
- ThyssenKrupp M&A Transaction Value：29.4 billion euros (approx. 34.4 billion USD) (Company disclosed figure as of 2026, unverified independently)
- Projected Annual Revenue Post-M&A：Over 20 billion euros (Company disclosed figure as of 2026, unverified independently)
- Total Maintained Equipment Post-M&A：3.2 million units (Company disclosed figure as of 2026, unverified independently)
- KONE China Annual Revenue：Over 20 billion RMB (Company disclosed figure as of 2026, unverified independently)
- KONE China Cumulative Shipped Equipment：1.8 million units (March 2026) (Company disclosed figure as of 2026, unverified independently)
- Listing Venue：Nasdaq Helsinki, Finland (Class B shares) (Company disclosed figure as of 2026, unverified independently)
Competitors / Peers
The global elevator industry has traditionally been characterized by an oligopolistic structure comprising Otis, KONE, Schindler, Mitsubishi Electric, Hitachi, and ThyssenKrupp. As the industry pioneer, Otis commands North American maintenance install-bases and brand-first mover advantages; Swiss-based Schindler is strong in public transit and supertall projects; Hitachi and Mitsubishi Electric leverage Japanese conglomerates to deeply cultivate the Asia-Pacific region; and ThyssenKrupp was spun off independently before its acquisition. KONE built a high-retention customer base through machine-room-less elevator innovations, maintenance subscriptions, and modernization. Following its 2026 acquisition of ThyssenKrupp, its annual revenue exceeds 20 billion euros with 3.2 million maintenance units, overtaking Otis to rank as the world's number one in scale, though cross-border integration, low-cost competition from local manufacturers, and Otis's counter-attacks remain long-term tests.
Sources
- https://www.company-histories.com/Kone-Corporation-Company-History.html
- https://www.mg21.com/knyjy.html
- https://www.kone.cn/zh/about-us
- https://baijiahao.baidu.com/s?for=pc&id=1864048161661368173&wfr=spider
- https://news.qq.com/rain/a/20260429A087RB00
- https://finance.jrj.com.cn/2026/04/29145756941829.shtml
- https://www.163.com/dy/article/JAMO29JC05563I3C.html