Growth Elsewhere, Stagnation in Europe. Chinese Factories Won't Improve Situation

• Post-coronavirus support programs scheduled to launch in 2023 and 2024 are ending, causing a slowdown, says WNP Christopher Mueller, head of statistics at the International Federation of Robotics.
• On a global scale, the electronics industry is now the largest consumer of robots, displacing the automotive industry from first place, after being the leader for decades.
• New generations of robots with greater capabilities enable the robotization of an increasingly wider range of processes, also in industries where manual labor predominated.

Where are we today, especially in this part of Europe, in terms of increasing the level of robotics?

- We are on the right track and, especially in Eastern Europe, we see some areas of growth, which is unfortunately at a low level. Some mature markets are struggling at the same time. We see this is especially true in Germany, where we have seen a very low level of orders over the last year and a half. Companies are hesitating to invest , which is of course related to the emergence of numerous sources of uncertainty in the economy and politics.

The slowdown is also the result of many support programs launched by many countries after the coronavirus pandemic ending or entering their final phase. I am thinking, for example, of tax relief programs launched in 2023 and 2024. The exhaustion of these programs is causing a certain slowdown in Europe .

Asia and America are the markets where the use of robots is the highest

At the same time, on other continents, in Asia and America , we are currently seeing very high, even soaring levels of orders. These are the main markets where the use of robots is the greatest. We hope that this is just a delay and that soon the volume of orders in Europe will also increase.

What could be causing this increase?

- Growing conflicts and trade barriers that favor regionalization of production and bringing it closer to sales markets may be a development stimulus. An example may be the tariffs imposed by the American administration, which wants to force the location of production in the United States .

To produce, companies need production capacity, and that includes lots of robots, because otherwise they won't be competitive. Incidentally, the labor market, especially for skilled labor, is quite limited in the U.S., so there aren't enough workers to produce everything domestically.

If increasing trade barriers reduce imports into Europe, we will have to increase local production.

Does this apply to all industries?

- We feel the lack of production capacity especially in some very specific areas. In other segments, however, it may turn out that there is even too much of it.

I mean, for example, the automotive industry, which is strongly oriented towards export, also to the United States. This segment may have a difficult period ahead of it if, due to customs conflicts, it has to limit exports, it will not need greater capacity and investments, and it is one of the most important buyers of robots.

Yes, but on the other hand we hear announcements of new factories being launched in Europe by Chinese companies. Won't that increase orders in the industry?

- Our observations show that Chinese companies usually use Chinese-made robots. So they will bring their own, instead of using European suppliers. So if we look at the increase in the number of robots, Chinese factories offer such a perspective. From the point of view of European suppliers, however, this may not be a stimulus to increase demand for new robots.

Over the past five years, China has invested heavily in expanding its production capacity.

On the other hand, it is also not known what the production level of these factories and the location of supply chains will be. To what extent will they buy components manufactured in Europe, and to what extent will they assemble cars from imported components?

China has invested heavily in expanding its manufacturing capacity over the past five years and in some areas now has far more than its own market requires.

You mentioned that the level of orders for robots is soaring in Asia and America. Does this mean that we will continue to lose competitiveness to these economies, since they are growing and we are at a standstill?

- Not necessarily, because in Europe we already have a fairly high level of automation and robotization of production, especially in the automotive industry.

In what segments are we lacking capacity?

- Primarily in electronics production. On a global scale, it is currently the largest consumer of robots, which has knocked the automotive industry from the top spot, which was the leader for decades. For several years, especially in China, the largest number of robots have been installed in electronics industry plants.

There is a shortage of such producers in Europe, which in some way seems to be contributing to the creation of demand for new production capacities, and therefore robots in this industry.

Technological progress is causing the emergence of robots with new capabilities

Growth in this industry is also one of the reasons for growth in Asia. In addition, the electronics industry has relatively short product cycles. It changes products more often, so it needs new devices, which also pumps up demand.

We also still have technological progress, which causes the emergence of new models of robots, with new possibilities, a wider horizon of application. This is also a stimulus for the growth of demand for new robots.

Is it always necessary to reach for new devices? When the Stellantis Group factory in Poland changed its production profile from A-segment cars to B-segment cars, and this was around the time of the pandemic, when new devices were hard to come by, they were greatly helped by reprogramming and reusing old, already owned robots .

- This is one of the trends observed in the world. The possibility of reuse depends on many factors, such as the age, degree of wear of the robots and their technical capabilities. Production is accelerating, so robots also have to work faster, and this favors new machines, which are usually lighter, faster and more energy-efficient than previous generations.

However, we have departments within robot manufacturing companies that deal with refurbishing used robots and putting them back into circulation. Independent integrator companies have also emerged that specialize in this. For now, however, the market for this type of service and the level of demand is rather low.

You mentioned that there are some growth areas in Eastern Europe. What are they?

- They result from, among other things, the mixing of production, from the search for cheaper production locations. In recent years, Poland has recorded an increase in costs, for example resulting from the increase in wages and living standards. Currently, some new investments are located where labor costs are lower than in Western Europe or in Poland. So we see growth in Romania or Bulgaria, and in the case of the automotive industry, we have many investments in Hungary.

And what is the situation in Poland?

- Much depends on strategic decisions here. For example, we have growth in the medical industry, because during the pandemic in Europe, a high level of dependence of drug production on supplies from Asia and the dangers that resulted from the interruption of these supplies were noticed.

We also see an increase in automation in the food industry, where it is difficult to find people to work in many positions. In such situations, we usually have two options - increase the salary to make the job more attractive or robotize these positions.

Raising wages is often impossible due to the profitability of production, which drives manufacturers to robotize more and more activities.

Yes, but a few years ago it was said that many activities had to be done manually, because robots can't do everything yet. Has the situation changed today?

- The capabilities of robots continue to expand , new designs appear, and the number of places where robots can be used increases.

Maybe we will start using humanoid robots in such places? BMW is already experimenting with such solutions in one of its American factories .

- In my opinion, the tendency to create humanoid robots results, among other things, from the desire to create a machine with which one can not only cooperate, but also communicate as with another human being. The question is, is this really what we need on the production line?

Why create humanoid robots for industry?

In my opinion, when we have a flat, even floor in the factory, we don't need robots with hips and legs. We also don't need devices with a "human" head.

It's different when we think about manipulators imitating human hands. This significantly increases the robot's capabilities compared to the classic gripper. In the near future, we can therefore expect this type of solution to appear in more new types of robots.