TECHNOLOGY AT WORK
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40<br />
Citi GPS: Global Perspectives & Solutions February 2015<br />
The Market for Industrial Robotics<br />
Industrial Robotics – Big Opportunity in China, the US and<br />
Japan<br />
Graeme McDonald<br />
Japanese Machinery & Shipbuilding Analyst<br />
Natalia Mamaeva<br />
Head of European Engineering Research<br />
Klaus Bergelind<br />
European Machinery Analyst<br />
Despite rapid growth the adaptation rates of<br />
robotics remains relatively low. In the US, for<br />
example, only ~10% of companies that<br />
would benefit from automated production<br />
have installed any robots so far<br />
Global manufacturing labour costs today account for $6 trillion annually and further<br />
adaptation of automation could represent considerable cost savings; according to<br />
McKinsey, in developed countries, across occupations such as manufacturing,<br />
packing, construction, maintenance, and agriculture, 15-25% of industrial worker<br />
tasks could be automated cost-effectively (based on estimated 2025 wage rates)<br />
and in developing countries (on average) 5-15% of manufacturing worker tasks<br />
could be automated across relevant occupations by 2025. McKinsey estimates a<br />
potential economic impact of $600 billion to $1.2 trillion per year by 2015 based on<br />
cost savings using the estimated annual cost of advanced robots compared with the<br />
annual employment cost of an equivalent number of workers.<br />
Industrial robotics in particular has been one of the higher growth segments<br />
amongst automation. However, despite the rapid growth, the adaptation rate of<br />
robotics world-wide remains relatively low. The Robotic Industries Association (RIA)<br />
estimates that only ~10% of US companies, for example, that would benefit from<br />
automated production have installed any robots so far. Figure 23 and Figure 24<br />
show the value and volume of shipments of robotics in North America and we see<br />
an ample opportunity for continued investments in this field.<br />
Figure 23. Value of robot shipments in North America<br />
Figure 24. Volume shipments of robots in North America<br />
(US$mn)<br />
500.0<br />
450.0<br />
400.0<br />
350.0<br />
300.0<br />
250.0<br />
200.0<br />
150.0<br />
100.0<br />
50.0<br />
0.0<br />
Q1: 05<br />
Q1: 06<br />
Value(LHS)<br />
Q1: 07<br />
Q1:08<br />
Q1:09<br />
Q1:10<br />
Q1:11<br />
Q1:12<br />
Q1:13<br />
Q1:14<br />
(YoY)<br />
80%<br />
60%<br />
40%<br />
20%<br />
0%<br />
-20%<br />
-40%<br />
-60%<br />
(Units)<br />
9,000<br />
8,000<br />
7,000<br />
6,000<br />
5,000<br />
4,000<br />
3,000<br />
2,000<br />
1,000<br />
0<br />
Q1: 05<br />
Q1: 06<br />
Q1: 07<br />
Q1:08<br />
YoY<br />
(RHS)<br />
Q1:09<br />
Q1:10<br />
Q1:11<br />
Q1:12<br />
Units<br />
(LHS)<br />
Q1:13<br />
Q1:14<br />
(YoY)<br />
80%<br />
60%<br />
40%<br />
20%<br />
0%<br />
-20%<br />
-40%<br />
-60%<br />
Source: Citi Research, Robotic Industries Association<br />
Source: Citi Research, Robotic Industries Association<br />
By 2025 there will be 25 million industrial<br />
robots sold worldwide, up by 15 million,<br />
growing at an average annual growth rate of<br />
25-30% from 2013...this will require<br />
investments totalling about $900 billion to<br />
$1.2 trillion<br />
According to McKinsey, the number of industrial robots installed globally by 2025<br />
will rise to 25 million, up 15 million from the current level, implying 25% to 30%<br />
average annual growth in robot sales, which is considerably higher than the<br />
average growth rate over the past two decades. This in turn would require<br />
considering investments totalling about $900 billion to $1.2 trillion. It is worth noting<br />
that McKinsey’s definition of industrial robots is much broader than the one<br />
presented by the International Federation of Robotics (IFR). The IFR which tracks<br />
units of industrial robots sold globally, measures articulated, SCARA, cylindrical,<br />
parallel and linear robots. Therefore the size of the addressable market differs<br />
considerably.<br />
© 2015 Citigroup