Foreign robot companies find success in China as exports boom
Following the article we wrote on Monday about foreign robotics firms benefiting from a technology gap in China, the Business Insider has released its 2020﻿﻿ ﻿estimates for global industrial robot installations. According to the estimates, by 2020﻿﻿﻿, global installations will reach 416,000 up from 224,000 this year and during 2015﻿ foreign companies will﻿ have contributed 41,000 out of the﻿ 56,000 industrial robots currently deployed in Chinese factories. Many of these﻿ foreign robot makers are situated in Europe or Japan. Despite ﻿﻿domestic robotics companies falling behind﻿ in China,the report suggests that companies like Foxconn plan to catch up with foreign robot makers, and provide more competition in the industry over the next few years.

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The Chinese market is one of the biggest for industrial robots because of its enormous size. The Chinese manufacturing sector employed nearly 100 million people during 2009, according to the US Bureau of Labor Statistics. In comparison, the US manufacturing sector employed 14.2 million people that year.

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And as many of China’s biggest manufacturers look to automate more of their factory work, demand for industrial robots will increase. For example, Foxconn, an electronics assembler and Apple's supplier, employs 1 million people in its factories, but its CEO Terry Gou said earlier this year that the company plans to automate 70% of its assembly line work with robots over the next three years. Gou explained that as wages rise in China, the next generation of Chinese workers will look for better work outside of the manufacturing sector, leading to labor shortages at Foxconn’s factories. So robots will have to take on a bigger role in the assembly line.

Many of those robots deployed on Chinese factory floors will be foreign-made though, according to Reuters. Despite government efforts to push the country’s robotics industry forward, foreign robot manufacturers still have a significant lead in the market for manufacturing robots in China. Foreign companies built 41,000 of the 56,000 industrial robots currently deployed in China, according to statistics from the International Federation of Robotics cited by Reuters.

Many foreign robot makers in Europe, Japan, and elsewhere hold a significant technological advantage over Chinese robotics firms. The Chinese government has provided subsidies for hundreds of new robotics startups in China, but these startups are struggling to compete with foreign robotics companies that have simply been around longer, and have more well-developed technology and supply chains.

Domestic robotics companies in China hope to catch up technologically with their foreign competitors over the next few years. But Chinese manufacturers like Foxconn are already demanding industrial robots, so foreign competitors will likely enjoy fast growth in China as the domestic robotics industry tries to catch up. BI Intelligence expects that more than 250,000 industrial robots will be shipped globally next year.

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