China Research and Intelligence Co., Ltd. (CRI)
Industrial robots are multi-joint manipulators or multi-degree-of-freedom machines for the industrial sector. They are widely used in the industries of automobiles, metal products, electronics, rubber, plastics, etc. In 2017, the global sales of industrial robots exceeded USD 14.7 billion, and the market size in China, Japan, South Korea, the U.S. and German accounted for over 70% of the global total.
According to CRI, from 2007 to 2017, the average wage in China's manufacturing industry more than tripled. Many manufacturers cannot afford the rising labor costs. Affected by government policies, cost pressures and other factors, the production and sales volume of industrial robots in China are rising. In 2013, China became the world's largest industrial robot market. The sales volume of industrial robots (including automatic guided vehicles) in China reached 141,000 units in 2017, increasing by over 58% YOY. However, the current density of robots in China's manufacturing industry is only about 5 per thousand people, far behind that in developed countries.
Due to high R&D costs, domestic enterprises are weak in the technologies of the core industrial robot components, which gives international robot giants strong bargaining power in the supply of the core components. In addition, international giants reduce their manufacturing costs by large-scale factory construction in China. Domestic enterprises are mostly small-sized and lack competitive strength. At present, China-made industrial robots are mainly supplied to low-end markets. The high-end industrial robot market is still occupied by international giants. The Bohai Rim, Yangtze River Delta, Pearl River Delta and Central West China have become the major clusters of China’s industrial robot industry. Domestic industrial robot manufacturers are emerging. Meanwhile, some Chinese enterprises have begun the acquisition of foreign industrial robot manufacturers to enhance their technologies and market share. For example, on Jan. 6, 2017, Midea Group (000333.SZ) announced that it had completed the acquisition of the shares of KUKA Aktiengesellschaft and had made full payment for the acquisition.
With the aging population and rising labor costs in China, low costs and high efficiency will open up the market for industrial robots. As the government promotes the transformation and upgrade of manufacturing and encourages the development of industrial robots, traditional manufacturing industries such as the textile industry and the machinery industry as well as electronic manufacturing have become big growth drivers for the industrial robot market. Moreover, with more mature technologies, domestic-made industrial robots are replacing imports and the market prices will continue to decline, which further stimulates Chinese enterprises' demand for industrial robots. It is estimated that the CAGR of China's industrial robot market will exceed 20% from 2018 to 2022, and the market size will exceed USD 5 billion in 2022.