How automation firms are rushing to invest in Chinese factories

There is an automation revolution in China. Factory owners are turning to robots amid rising labour costs, worker-protests and greater demand for quality. In 2013, the country overtook Japan as the world’s largest market for industrial robots, accounting for 20 per cent of global supply, according to the International Federation of Robotics, an industry group based in Germany.

As robots march into Chinese factories, global automation companies are racing to invest. Demand is primarily driven by the car sector, which accounts for 40 to 50 per cent of robot demand in China, according to consultancy Solidiance.

But the big race is now in the electronics sector.  Adapting robots to the needs of fast-changing production lines is a challenge for global players such as Japan’s Fanuc Corp, Yaskawa Electric Corp, German’s Kuka Corp and Swiss robot maker ABB.

“Robotics has the limitation of requiring intensive change-out to adapt to a new product model or production line scenario,” says Pilar Dieter, a partner at Solidiance. “If a robotics manufacturer can solve this dilemma, they will certainly hold a coveted position in the market.”

Top international robot makers are involved in a fierce struggle in the China market, which ABB forecasts will grow at 15 per cent in the next two years.  In 2012, Fanuc had 15 per cent, Yaskawa 14 per cent. Kuka and ABB had 13 per cent and 12 per cent, respectively, according to Dieter.