Equipment suppliers benefit from OEM BRIC investments
By: Martin Kahl, Thursday, December 22, 2011, AutomotiveWorld.com
Despite the challenging economic conditions for which this year will be remembered, leading manufacturing equipment and machinery suppliers have enjoyed some of their best ever results in 2011, with much of the growth seen in emerging markets. Forecasts of little or no growth in many of the mature automotive markets are counter-balanced by anticipated growth in emerging markets, specifically the BRIC (Brazil, Russia, India and China) nations.
Ralf Dieter, Chief Executive of paint line and robotics supplier Durr, recently told Automobilwoche he expects to report record turnover in 2011, thanks to strong performance in China, Brazil and Eastern Europe. 66% of the company's new business comes from China, says Dieter, and he does not expect this ratio to change significantly over the next few years. For the full year, the company is expecting new business to total €2.5bn, and the Application Technology business unit - which houses the automotive robot and application technology activities - is set to see full year sales rise 48% to €400m.
Despite the worsening financial situation in many regions, ABB says “demand for robotics solutions remains robust” as companies seek to invest in ways of improving energy efficiency and productivity.
Power and automation systems supplier ABB reported a 12% increase in orders in its Q3 2011 results, but orders for the company’s Discrete Automation and Motion division in Q3 2011, in dollars, were up 61% year-on-year.
KUKA, the supplier of robotic and automation systems, also reported strong performance in 2011, with orders booked in the nine months to October exceeding 2010's full year total. The company reported a 35% improvement in Q3 revenue to €369m, with nine-month revenues up 37% to €1.03bn. At the end of November 2011, it annouced - without providing details - that it had secured a contract to supply a major premium OEM with two complete assembly lines, with "a volume in the medium double-digit million euro range".
Despite the worsening financial situation in many regions, ABB says "demand for robotics solutions remains robust" as companies seek to invest in ways of improving energy efficiency and productivity. Similarly, Durr said that, "despite the troubles on the financial markets and the weakened economic expectations (it) currently sees no signs of a decrease in demand in the automobile industry".
In the combined BRIC markets, KUKA's nine-month sales in 2011 were up 165% year-on-year.
Like ABB, KUKA expects order bookings to continue to rise as manufacturers turn to robotic automation to support an increase in the number of vehicles built and models offered, as well as cost pressure-driven factory automation, the growing demand for energy-efficient manufacturing and continued growth in emerging markets.
In the combined BRIC markets, KUKA's nine-month sales in 2011 were up 165% year-on-year. It said sales rose 18% in Brazil, a country which has seen massive light and heavy vehicle manufacturing investments in recent months. And whilst sales in China may currently appear to be decelerating, manufacturing investments are not. Plastic Omnium said last week it expects to open 20 new factories by 2015, 17 of which will be in BRIC countries, including 11 in China.
Robotics and factory automation do not come cheaply. But faced with the need to improve manufacturing quality, increase capacity utilisation and energy efficiency, and raise quality and accuracy levels in rapidly growing markets, manufacturers are increasingly seeing the upside of up-front investments, especially if this helps maintain profitability in challenging economic conditions.
Martin Kahl is Features Editor at AutomotiveWorld.com
The AutomotiveWorld.com Expert Opinion column is open to automotive industry decision makers and influencers. If you would like to contribute an Expert Opinion piece, please contact editorial@automotiveworld.com
Published on Thursday, December 22, 2011
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