Visitors look at industrial robots displayed during the 2012 China International Industry Fair in Shanghai. (Photo : www.english.cri.cn)
China’s ambition to develop a national robotics industry is facing a challenge as local robotics firm grapple with the technology gap between Chinese and foreign industrial automation firms, the weakening economy and a slump in the automotive sector, the Global Times reported.
Three years after the government issued policies to spur the development of robotics, industry insiders foresee a market bubble.
"Last year everybody thought they could produce a robot," Alan Lee, director of Asia sales and business development at Boston-based Rethink Robotics, said. "When you have market saturation you'll have filtering and M&A. These guys will be the first layer to suffer."
According to the report, government policies on robotics development have driven low-margin, low-cost companies to jump into the bandwagon, but without having a technology of their own, they compete on price alone.
As wages are rising at 10 percent a year and labor shortages rose as high as 30 percent in some areas, Chinese policymakers are concerned about the growth of the local robotics industry.
According to the International Federation of Robotics, the number of Chinese-made robots surged from an estimated 3,000 in 2012 to 15,000 in 2014, when the government started introducing proposals for automated manufacturing.
During the same period, the growth of foreign-made robots had been slow but they dominated Chinese factories, increasing their number from 22,000 to 41,000, the report said.
Although government subsidies have sparked an explosion of Chinese robotics firms from 200 to 815 in two years, only 30 of those firms have done meaningful research and development, according to Wang Baomin, senior analyst at Shenzhen-based consulting firm MIR Industry.
Xu Wenjiu, an executive at Shenzhen-based robot maker LEN, said that about a third of domestic robot firms are expected to collapse within three years because they do not offer after-market maintenance for products that break down.
Ma Junqing, DTMG president, also acknowledged the "obvious gap" between Chinese and foreign firms in robot and automation technology. He said he hoped to catch up with Japanese rivals in three years and German competitors within five.
"The complete product chain takes a long time, as does researching technology and developing the market," said Ma, whose firm has longstanding government links and receives subsidies and loans.
The report added that local firms like Shanghai Siasun Robot & Automation are making advances in robot technology, while companies like DMTG and Shenyang Machine Tool Co. are investing into more sophisticated products.
Rethink Robotics founder Rodney Brooks, a consultant for local Chinese governments, predicted that with the level of investment and technology required, a local firm may emerge to champion Chinese robotics.
Brooks identified e-commerce giant Alibaba Group Holding, which has invested in robotics with Foxconn and Softbank, to become a major player in the future.
"It may not be the traditional players but the transformation is still going to happen in China," Brooks said.
