China has been the world’s largest industrial robot market for four consecutive years. In 2016, China had a total sales volume of almost 90,000 units – a 27 percent increase compared to 2015 and representing 30 percent of the global market.
The market has been partly driven by massive subsidies, the number of companies in this sector increased from around 300 to around 5,000 companies in the past six years. Good relations between executives and government officials often were more important than technological competence when successfully applying for subsidies.
Many companies in this field are empty shells without any technological know-how. They are caught in a vicious cycle of barely differentiable products and low-profit margins.
In order to deal with this problem, the Chinese government issued a policy guideline declaring that robot producers below 50 million RMB ($7.23 million U.S.) and a production of less than 2,000 units per year are supposed to leave the market in the midterm.
According to these criteria, we currently see around 10 potentially competitive Chinese makers of industrial robots, including Siasun, Efort, GSK, Estun, STS, and Greatoo. In the past few years, they were continuously able to increase their market share, in simple applications like loading and unloading, followed by bending and welding.
Alibaba’s and JD.com’s homegrown developments of robots in the logistics sector are also noteworthy.
If you’re wondering who are the other heavyweights in China’s robotics industry, the major industrial automation providers are: ABB, KUKA, Yaskawa, and Kawasaki who all plan to double their production capacities. In terms of the hiring landscape engineers trained by these companies are in extremely high demand.
The Chinese robot market has been the most dynamic in the world for the past few years. Hence, domestic producers focused primarily on their domestic market.
If you recall in 2016 Midea Group announced its acquisition of German robotics company KUKA. Since then, KUKA’s “center of gravity,” in terms of projected sales and management, has shifted from Europe toward China.
I do not expect robot producers that originated in China to get a foothold in the European or North American market in the foreseeable future. Besides lagging behind from a technological point of view, there exist considerable reservations within the industry regarding issues like trust and data security.
Regardless if its a lack of trust from the West, or a lack of interest, leading robotics producers in China export less than 10% of their production.
According to the International Federation of Robotics (IFR), China has had the most industrial robots in operation globally since 2016. By 2020, China is expected to produce 150,000 industrial robot units and have 950,300 industrial robots in operation.
However, despite China having the most industrial robots in the world, its robot density is below the global average, with only 68 units per 10,000 workers in 2016. With China’s manufacturing prowess, this should give you an idea of just how much potential the domestic market presents and why no one is rushing to enter a market that’s skeptical of their trustworthiness.
Source: Robotics Business Review