NEW YORK • This piece of news may not give you a lift if you are faint of heart.
At a testing site in south-western Germany, one of the world's largest lift companies is stepping up trials of the first system to operate without cables.
Thyssenkrupp's futuristic lift defies a basic design that has varied little over hundreds of years. Instead of being attached to ropes and pulleys, it soars up and across shafts with the help of magnets.
"Psychologically, there's no difference," said Mr Andreas Schierenbeck, chief executive of the Thyssenkrupp Elevators division, dismissing any fear factor that comes with the technology.
"Some people were afraid to step into elevators even with a cable."
With the first commercial deployment planned for 2020 in a building in Berlin, the maglev elevator - called Multi - will put the German engineering company a step ahead of rivals Otis, Kone Oyj and Schindler Holdings.
Ranked fourth in the world by sales, Thyssenkrupp is betting that the lift will provide an edge just as the market - estimated at €60 billion (S$96 billion) by investment bank Jefferies - is poised for growth, driven by demand in dense urban centres for tall buildings.
"Thyssenkrupp's main advantage right now is being first in the field," said Mr David Varga, an analyst at Bankhaus Metzler, who recommends buying the stock.
Developing a new technology will help the company to at least retain market share in an industry where gaining significantly on rivals is "very hard".
"It's interesting from a branding perspective," he added, noting that the company will have certain short-term advantages even though the new product will not contribute to the bottom line for at least a few more years.
Thyssenkrupp's elevator division started out as a sideline for the parent company, which is Germany's biggest steelmaker.
In the past six years, amid a global steel glut that led to a collapse in prices and a planned merger with rival Tata Steel, the unit has emerged as a cash cow, earning more than the company's other businesses.
Thyssenkrupp's Multi elevator will be in a category of its own, technologically.
Kone is focusing on making cables lighter for ultra-tall buildings like Saudi Arabia's Jeddah Tower.
The Finnish company, which has a testing site 350m underground in a limestone mine, also offers double-decker elevator cabins.
Otis, owned by United States giant United Technologies, has developed high-speed lifts.
Unlike traditionally designed systems, Thyssenkrupp said the Multi will make ferrying people around buildings more efficient. For instance, more than one of the elevator cabins can use the same shaft, zipping up and down and even moving horizontally to get out of the way of another cabin in its path.
This flexibility could allow greater architectural leeway and ultimately change city skylines.
"You get your freedom back - you don't have to use the elevator shaft as the main element" of the design around which buildings are conceived, Mr Schierenbeck said in an interview at the company's headquarters in Essen.
The new lifts could run on the outside of buildings or move sideways between parking lots and concierge desks, he added.
While the magnetic system is more expensive than traditional designs, developers can save money by using fewer and smaller shafts, freeing up precious floor space, according to Mr Schierenbeck.
Company estimates show the investment becomes worthwhile for buildings taller than 250m or about 80 storeys.
While the key Chinese market has slowed amid weaker property development and tougher competition, Mr Schierenbeck sees rising demand in the coming decades as hundreds of millions of Chinese move to urban centres.
"The progress we are making is maybe good, but maybe not fast enough," he said. "We could do better. Maybe that's me being the typical German engineer, always looking at the things that are not working."
BLOOMBERG
