The global economy is currently facing a set of uncertainties that are severely impacting the economic activities, and this does not leave the robotics and automation sector unaffected. After several years of double-digit growth rates, the number of global robot installations grew by only 6% in 2018, but still reached another record level with almost 420,000 units. After a difficult year for the two main customer industries (automotive and electronics) and two of the main destinations – China and North America – the growth nevertheless came as a surprise. Even more as a surprise came the robotics market in India.
India is one of the strongest growing economies among the emerging markets in Asia. Prospects for further increasing robot installations are promising and companies across many industries intend to expand capacities. The country needs to expand its manufacturing industry to create more job opportunities. Higher wages and the rising share of affluent citizens in India are the main drivers of a growing and promising consumer market.
To stay competitive in the market for fast-moving consumer goods, India needs to automate its industries and move from manual labour to robotised manufacturing. The motivation is obvious – by providing repeatable, reliable accuracy to the production process, the failure rate reduces and product quality increases. The overall productivity and thus, the achievable output, are increasing, which is needed in order to saturate the growing demand.
Not surprisingly, the strongest growth driver in 2018 was the general industry, consisting mainly of the rubber and plastics industry, the metal industry and the electrical/electronics industry in India. Compared to the size of the economy, installation figures in the general industry, are still rather low but use of robots in the non-automotive manufacturing is catching up with the automotive sector. So far, the latter remains the largest customer industry with a share of 44% of total installations, but with a modest growth rate of only 10%.
India’s automation potential is illustrated by its low robot density figures: with a value of only four industrial robots per 10,000 employees in the manufacturing industry, India resides at the bottom end of the global ranking. With its 99 industrial robots per 10,000 employees in the automotive industry, the country has less than a fourth of Indonesia’s density (440 units) and is far away from China (732 units) and the front runner, Korea (2,589 units).
We expect the automotive industry to remain the key driver of growth in India. Numerous new projects are announced by car manufacturers aiming to expand production capacities. Moreover, OEMs increasingly require local supply of automotive parts. Therefore, we can expect further robot sales growth for India between 2019 and 2022.