Otis eyes growth expansion driven by lifecycle solutions

Otis Worldwide Corp is strategically targeting China's "replacement wave" of older elevators, capitalizing on national policies promoting large-scale equipment renewals to expand its local footprint.

China remains one of the group's most dynamic and promising markets with expanding opportunities in service and refurbishment, said Judy Marks, chairwoman, CEO and president of Otis Worldwide Corp, a United States-based elevator manufacturer.

Otis sees strong alignment between its strategic direction and the country's goals for the 15th Five-Year Plan (2026-30), which emphasizes high-quality development, smart cities, digitalization and urban renewal, she said.

"The emphasis on high-quality development, smart cities, digitalization and urban renewal aligns with Otis' current offerings and strategic direction," Marks said.

The government's push for urban renewal and the upgrading of public infrastructure to support an aging population present a significant opportunity.

"Government bond subsidies for elevator refurbishment and the recently announced program for adding elevators to existing buildings demonstrate the government's strong efforts in advancing high-quality living through good housing," added Marks.

The company secured a contract last year to upgrade 106 elevators in a residential community in Shanghai, while it also won additional bids in Shijiazhuang, Hebei province, and Hefei, Anhui province, to renovate elevators in several neighborhoods in the same year.

Nearly 200 aging elevators in the two cities are now slated for comprehensive modernization under the new projects, marking another step in expanding its equipment renewal footprint in China.

Marks noted that Otis strives to build a safer and more sustainable urban landscape in China by merging technology with customer demands, driving progress in areas like barrier-free transit, city upgrades and artificial intelligence-powered elevator safety.

This nationwide effort is particularly relevant given the country's aging infrastructure.

"Over 900,000 elevators have been in use for more than 15 years and require refurbishment to stay safe and efficient. The number of aging elevators is growing by about 10 percent annually," she said.

According to the Ministry of Commerce, China introduced an action plan in March 2024 to encourage large-scale equipment renewals and consumer goods trade-ins, aiming to stimulate domestic consumption and bolster economic expansion.

Industry experts suggest that by boosting both manufacturing and consumer demand, these policies are acting as a key engine for maintaining growth during the country's ongoing economic transition.

These initiatives have advanced the circular economy, drawn in foreign capital and innovative assets, and sparked new business models, said Guo Chaoxian, a researcher at the Institute of Industrial Economics of the Beijing-based Chinese Academy of Social Sciences.

Guo added that the measures have also accelerated the push for green and smart upgrades, subsequently enhancing the security and resilience of industrial and supply chains.

Otis is responding to this replacement wave by offering comprehensive lifecycle solutions rather than just providing equipment. The company has developed flexible refurbishment solutions tailored for complex scenarios in older residential communities.

"We are reshaping the refurbishment experience through digitalization," Marks explained. "Leveraging our global research and development center in Shanghai, we integrate AI and IoT (the internet of things) technologies into our newest elevator solutions. This allows elevators in older buildings to also feature predictive maintenance capabilities, shifting safety and performance to proactive rather than reactive."

Otis is also partnering with the China Development Research Foundation (CDRF) to train skilled elevator technicians, supporting China's urban modernization, integrating into CDRF's vocational program in South China and training over 800 students annually starting this year.

Furthermore, as China's population ages, accessibility is becoming increasingly critical. Otis is addressing this through its "Smart Cab" and accessibility technologies, supporting barrier-free city initiatives with solutions designed to maintain independence for the country's "silver economy".

The transition toward a services-driven economy in China also aligns with Otis' evolving strategy, which increasingly focuses on the after-market. The company's Otis ONE IoT service platform leverages smart sensors and AI for real-time monitoring, reducing downtime and enhancing reliability.

Otis views China not just as a market, but as a critical hub for innovation, said Marks.

She highlighted the company's Tianjin factory, recognized as a national-level "Outstanding Smart Factory", where technology-powered quality inspection and generative design have boosted efficiency by over 60 percent. These advancements are seen as benchmarks to be replicated globally.

Moreover, the company's global R&D center in Shanghai is developing new product platforms specifically tailored to the needs of China's dense, digital-first cities, she said.

China's push for high-quality, tech-driven growth is directly, and will continue, fueling the company's global product roadmap, said Marks.