Growth in demand for industrial robots halves as China, carmakers cut back

Robots work on automotive parts at a production facility of Austrian specialty steel maker Voestalpine in Linz

FRANKFURT (Reuters) – Growth in sales of industrial robots has halved from levels seen two years ago and is unlikely to recover those levels over the next few years because demand in China, the biggest market, has slowed.

Carmakers, the top buyers, have also cut back on investments, affecting demand for robots, although that should start to recover as they introduce new models and production techniques, the International Federation of Robots (IFR) forecast on Thursday.

Global shipments of industrial robots rose 15 percent last year, down from 29 percent growth in 2014, and are likely to increase by 13-14 percent annually over the next few years, the Frankfurt-based IFR forecast said in a report.

Shipments in China rose 20 percent last year, after surging 56 percent in 2014, as the world’s second-biggest economy slowed, IFR said, revising estimates given in June. Chinese demand, however, should start to accelerate again.

China has defined robotics as a strategic priority as it aims to become one of the top technological industrial nations within a few years.

“China will remain the main driver of the growth and will expand its dominance,” the IFR said. “The need to modernize and to further increase capacities will boost robot installations in the coming years.”

Chinese home appliance maker Midea is buying German robot maker Kuka for 4.5 billion euros ($5 billion), and the IFR said that home-grown Chinese robot suppliers increased their market share to 29 percent in 2015 from 25 percent in 2013.

Global sales of industrial robots by value rose 9 percent to $11.1 billion in 2015, while the estimated value of robot systems sold – including software, peripherals and systems engineering – was $35 billion, according to the IFR.

It expects global shipments of industrial robots to rise by 14 percent this year and by an average of 13 percent between 2017 and 2019, helped by rising demand from industries such as electronics and metals.

Compact and easy-to-use robots that collaborate with humans would have a breakthrough in the next few years and would drive the market, it said.

Such robots are more suitable than large, caged robots for the electronics industry, where demand for industrial robots jumped 41 percent last year, the IFR said.

Growth in demand for robots from carmakers slowed to 4 percent last year from an average of 20 percent between 2010 and 2015. IFR predicted it would rise again, driven by new models and materials that entail different production processes.

However, a study published by Ernst & Young on Thursday showed that investments by the world’s top 16 carmakers in plants and development centers dropped to 14.8 billion euros in the first eight months of this year, from 52.5 billion euros in 2015.

(Reporting by Georgina Prodhan; Editing by Susan Fenton)