Robotics Industry Insights
The European Robotics Market and How the Germans Lead
by Gordon Feller, Contributing Editor
Robotic Industries Association Posted 03/04/2008
As the EU economies continue to expand, Germany, the largest of the 26 EU economies, offers profitable market opportunities for producers of innovative automation technology and peripheral equipment. The German automation sector is highly international with exports amounting to 80%, and imports at 67%. Germany produces 14% of the global automation technology. Due to Germany’s central location in Europe, major European distributors of automation are operating out of Germany to supply the neighboring European markets.
In 2006, the overall economy in Germany recovered from stagnation, and the German automation market showed good growth. The German automation market sales increased by 8.8%. Exports soared to 12.4%, or EUR 24.3 billion, and imports reached EUR 12.3 billion, an increase of 15.4% over the previous year.
After stagnating in 2005, the market improved in 2006. Despite decreasing demand for robots in the European automotive industry, the European robotics market grew by 11%. The good results were due to the upswing in the metal processing and chemical industries, offsetting the 14% order decline in the automotive industry.
Major European suppliers of robots are: KUKA Roboter GmbH, MOTOMAN, FANUC Robotics, ABB and Reis Robotics; in the servicing and electronics fields: Philips and Electrolux as well as Safran, EADS, Thales and Finmeccanica, which are mostly OEMs or system providers for robotics.
FANUC Robotics is just one example of how important the European Market is to robot suppliers. FANUC continues to invest heavily in building a strong infrastructure in Western and Eastern Europe. The building of a new EUR 11 million facility near Stuttgart is aimed at meeting the needs of the German Market.
The use of industrial robots is increasing steadily, particularly in the following sectors: Plastics and rubber, food and packaging, household appliances, wood and furniture, glass and ceramics. Insiders report that in Europe about 30% more robots were installed in the food industry than in both America and Asia in 2006. European manufacturers use more robot systems in industries other than in automotive or electrical/electronics applications than any other region in the world, including both the USA and Japan.
Germany is by far the largest market for multipurpose industrial robots in Europe -- followed by Italy with about half the size, and then France and Sweden. Germany also is the country with the highest robot density in Europe: 171 robots are used per 10,000 employees in the German manufacturing industry (2005). Insiders forecast that installations of industrial robots in Germany will reach a total of 13,000 units in 2009.
According to the International Federation of Robotics (IFR, http://www.ifr.org/) based in Paris, France, best market prospects globally are in the following application areas: Underwater systems, defense, rescue and security applications, laboratory robots, professional cleaning robots, medical robots, and mobile robot platforms for multiple uses.
The European robotics industry and the EU have recently agreed on a special “i2010 initiative,” to foster European robotics technology. In October 2007, the European Robotics Platform (EUROP) was launched to secure Europe’s leading position in robotics, and to encourage and support new companies and supply networks to meet new technological needs.
Part of EUROP (http://www.robotics-platform.eu.com) is an end-user forum encompassing representatives from industrial sectors that are major users of robotics technologies (aerospace, automotive, food and security applications).
This forum is expected to state expectations, requirements, and validation principles. Working groups are set up, as needed, to focus on specific pre-defined tasks, either permanently or on an ad-hoc temporary basis.
In 2006, imports of electrical automation equipment into Germany totaled EUR 12.3 billion, an increase of 15.4% over the previous year. Over 50%, EUR 6.52 billion, of these imports originated from the former 25 EU countries (today 27); followed by imports from southeast Asia amounting to 18%, or EUR 2.2 billion, and the United States with EUR 1.5 billion (12%). Imports of automation technology from the United States increased by 18.5%.
In the first half of 2007, German sales of process automation, in particular, increased by 9-10%, to meet demands of a booming plant engineering industry. It is expected that this positive trend will continue in 2008. The energy and raw materials industries are the two major driving forces of today’s process automation industry. The chemical, pharmaceutical and food processing industries are also important users of automation technologies.
Security and quality are important sales factors. Intelligent solutions for safety and security management and automated systems for quality control and data generation are of major interest. The use of field bus communication in process automation, amounting to a mere 10% five years ago, has grown to nearly 30%.
Ethernet is the basis of communication between the automation systems. The use of web-based technology will continue to grow in importance. Wireless communication is a major trend. Integration and compatibility of different automation components are of high importance. Integrated RFID solutions are increasingly appreciated, facilitating reliable identification and location of parts and products.
This new trend calls for highly precise and intelligent sensors. With regard to plant automation, flexibility and easy configuration are essential. Simulation and virtual planning of production processes, with the help of special software, are of high interest. Easy integration of plant components spread over different locations with standardized wireless IT solutions is also important.
As is the case in other industry sectors, energy saving and efficiency are essential for cost reduction. According to market insiders, electrical drives and systems offer the highest energy saving potential together with the pumps, compressors, and centrifuges connected. In Germany, 30 million drives are in operation. Their refitting with electronic speed controls would bring substantial energy savings; thus offering additional opportunities to U.S. firms.
Receptivity to innovative U.S. products is high. U.S. manufacturers enjoy a good reputation. German industry increasingly purchases standard products from the Internet. Distributors and commercial agents are the two major channels of distribution for sophisticated controllers and measurement equipment in Germany.
Distributors typically serve as intermediaries between U.S. manufacturers and German OEMs or end-users. In general, agents and distributors specialize in selling to specific industries (i.e., the chemical market) which they supply with a particular range of products.
American firms should appoint an agent or a distributor who can provide full service, parts back-up and maintain a stock sufficient to answer short-notice (replacement) orders. German distributors usually prefer to sign contracts that cover more than a 12-month period or contain a clause which renews the contract automatically for another year, should none of the parties wish to terminate the relationship.
Reliable service is essential in addition to the distributor’s technical expertise. In the case of automation systems, producers or system integrators usually provide their clients with a custom-tailored automation solution via their own agent/distributor networks.
Presently, the EUR-USD exchange rate is very favorable for U.S. products. Several important global players have operations in Germany. Among them are: Siemens AG, FANUC Robotics, MOTOMAN Robotec GmbH, ABB Asea Brown Boveri AG, Alstom Group, Robert Bosch GmbH, Yogokawa, Babcock Borsig, Endress + Hauser, Krohne, Danfoss and others.
In addition to the innovative edge of a specific U.S. product, successful market entry depends on pricing, compliance with EU standards and regulations, and effective marketing.
It is essential that products undergo full testing, are labeled with the CE mark or have hazardous environment safety compliance, where appropriate. The CE mark certifies that the product is in compliance with EU standards.
Information, in English, on testing and approval procedures can be obtained from ANSI (http://www.ansi.org), or from the U.S. offices of the German testing authority, TUEV (http://www.us.tuv.com), which also provides testing. U.S.-based companies can provide testing and standards information for the EU market as well. FM Global Group (http://www.fmglobal.com) is one such example.
Sources for data included in this article:
The German Association of the Automotive Industry (VDA)
Verein Deutscher Werkzeugmaschinenfabriken (VDW)
German Federal Statistics Office
The British Automation and Robot Association
Danish Industrial Robot Association
Japan Robot Association
GERMAN ENGINEERING FEDERATION (VDMA)
"2007 World Machine-Tool Survey" (GardnerWeb)
This article has been reviewed by members of the RIA Editorial Advisory Group.
For more information, you may contact any of the experts listed in this article or visit Robotics Online, Tips & Tech Papers.