In recent years, against the backdrop of declining low-cost labor supply, rising wages, and industrial transformation, "machine replacement" has been frequently mentioned.
In 2015, Siasun Robot & Automation Co., Ltd. (hereinafter referred to as "Siasun Robot", 300024.SZ) pioneered the use of robots in a stamping production line. This production line was used to process parts for BMW's 2016 new models, making it the first production line in which domestically produced robots provided stamped parts for an international high-end automotive brand.
Xu Fang, director of the Siasun Robot Research Institute, told China Business News, "This is the result of many years of accumulation." Siasun Robot was involved in stamping lines and final assembly more than a decade ago.
Currently, Siasun Robot & Automation Co., Ltd. has sold over 1,000 industrial robots. Siasun offers dozens of industrial robot products, covering applications in welding, grinding, polishing, palletizing, painting, stamping, and other fields, providing systematic services to industries such as automotive, electronics, power, food, and pharmaceuticals. Financial reports show that in 2015, Siasun's industrial robot product revenue increased by 8.63% year-on-year, reaching 518 million yuan, with a gross profit margin of 33.74%.
However, although China has been the world's largest market for industrial robots since 2013, the density of industrial robots in its manufacturing sector remains very low. In 2013, China's industrial robot density was only 30 units per 10,000 industrial workers, less than half the global average. The gap is even wider compared to countries with higher levels of industrial automation, such as South Korea (437 units per 10,000 industrial workers), Japan (323 units per 10,000 industrial workers), and Germany (282 units per 10,000 industrial workers). The domestic industrial robot market still has enormous potential.
In contrast, the operating conditions of most domestic robot manufacturers are not satisfactory.
Fueled by favorable policies, the number of robot companies in the domestic market has reached nearly a thousand in just two years. According to statistics from the OFweek Industry Research Center, in the first half of 2015, over 80% of manufacturers saw year-on-year growth in their robot body business, with only 20% experiencing a decline; however, in terms of profitability, the loss rate for robot body business was as high as 70%. In other words, over 70% of companies were operating at a loss in their robot body business.
Data released by the International Federation of Robotics (IFR) shows that in 2014, 70% of the world's industrial robots were sold to China, Japan, the United States, South Korea, and Germany. Among them, China's industrial robot sales reached 57,000 units, a year-on-year increase of 56%, accounting for approximately one-quarter of global sales. It is worth noting that Chinese domestic robot manufacturers sold 16,000 units, a year-on-year increase of 78%; while foreign robot manufacturers sold 41,000 units, a year-on-year increase of 49%.
Although Chinese robot manufacturers have outpaced foreign manufacturers in sales growth, they are primarily focused on the low-to-mid-range market and lack core technologies. Nine out of ten Chinese companies have a scale of less than 100 million RMB, mainly concentrating on low-to-mid-range three-axis and four-axis robots, while high-end robots rely heavily on imports. In 2013, China purchased and assembled 36,500 industrial robots. Foreign-made robots were predominantly high-end, almost monopolizing high-end industries such as automobile manufacturing and welding, accounting for 96% of the market. Domestically produced robots, on the other hand, were mainly used for material handling and loading/unloading, placing them at the low end of the industry.
The root of the problem lies in the lack of core components. Many core components required for domestically produced robots, such as reducers, servo motors, and controllers, are directly sourced from abroad, making it difficult for domestically produced robots to compete with foreign products. Zhao Yong, CEO of China Robot Network, told the First Financial Daily that currently, most Chinese robot manufacturers sell no more than 1,000 units per year, which is insufficient to cover the R&D costs of core components. "Because they cannot meet the '24/7' requirements of production lines in industries such as automobiles and ships, some domestic robot manufacturers can only survive in the field of component manufacturing," Zhao Yong said.
To enhance its R&D capabilities, Siasun Robot & Automation Co., Ltd. has been increasing its R&D investment every year, amounting to RMB 41 million, RMB 68 million, and RMB 84 million in 2013, 2014, and 2015 respectively. The proportion of its annual operating revenue has also been increasing, reaching 3.1%, 4.47%, and 5% respectively.
The gap between domestic and international robot manufacturers (ABB of Switzerland, FANUC and Yaskawa Electric of Japan, and KUKA of Germany) is multifaceted, including product performance (directly reflected in precision and speed), spare parts, and control systems.
The gap between domestic manufacturers and the "Big Four" robot manufacturers also lies in their accumulated experience in product applications. The "Big Four" have over 20 years of history, Siasun Robot & Automation Co., Ltd. has 15 years, while some other domestic robot manufacturers have only two or three years of experience. Xu Fang believes that Siasun Robot & Automation Co., Ltd. currently has a relatively complete product line, and the biggest gap between it and the "Big Four" is scale.
Speaking about plans for the next few years, Xu Fang stated that Siasun Robot & Automation Co., Ltd. has fully developed the controllers and software for all its robots in-house. They are currently working on servo drives, while collaborating with other domestic manufacturers on motors and reducers. Drawing on the development experience of the four major international robot manufacturers, Xu Fang believes that the government only needs to support a few large companies to grow stronger, or allow market forces to weed out weaker players; there is no need to support all robot manufacturers.
