ELITE ROBOT: The European Cobot Market at the End of the Pandemic
From ELITE ROBOT, the emerging Chinese cobot startup, I received the order to represent the European market. I received permission to publish excerpts here. The company is aiming at the local market and is looking for distributors, sales professionals and technicians. If you are interested, please contact the partners already located in Portugal and Italy(link).
The pandemic seems to be nearing its end in Europe - sooner or later, depending on the risk assessment. Time to look back and consider what impact the pandemic has had on robotics.
Economic development
In the first year of the pandemic, i.e. 2020, there was a sharp drop in economic output in all European countries. The main reason for this was the shock, including plant closures as a protective measure and lockdowns. In 2021, the economy recovered, although the previous level has not yet been reached again. The reason was further closures as well as material shortages. The economy has recovered in the meantime, but is still below the level before the start of the pandemic. This may be due - especially in Germany - to the previously unknown supply bottlenecks. In 2021, various automakers had to close their plants for weeks. The German car manufacturer VW produced as few cars at its main site in Wolfsburg as it had last done over 60 years ago. In the meantime, numerous sectors have been affected by supply bottlenecks. However, the mood in most manufacturing sectors is positive.
Some of the main industries relevant to robotics are very optimistic. The mechanical engineering sector expects another peak year and should have generated more sales at the end of 2022 than before Corona. In addition, there is the transformation of the automotive industry with a correspondingly high level of investment in new production facilities for electromobility including battery production. In return, there is hardly any investment in the production of combustion engines. Nevertheless, there is potential for cobots in the automotive industry. An example of this is the Fiat 500 use case, whose assembly is supported by 11 cobots. This is also because the average age of Fiat workers is steadily increasing, making ergonomics more important (link). This is likely to apply to almost all automotive plants in Europe, with one exception.
The development of the gross domestic product of important countries can be taken from this table:
| 2019 | 2020 | 2021 | 2022 Forecast. | |
|---|---|---|---|---|
| Germany | 1,1% | -4,8% | 2,7% | 4,0% |
| Great Britain | 1,4% | -9,8% | 6,8% | 5,1% |
| Spain | 2,1% | -10,8% | 5,7% | 6,4% |
| France | 1,8% | -7,9% | 6,5% | 3,9% |
| Italy | 0,4% | -8,9% | 6,2% | 4,2% |
| Sweden | 2,0% | -2,8% | 3,9% | 3,4% |
| Unemployment rate | ||||
| 2019 | 2020 | 2021 | 2022 Forecast. | |
| Germany | 5,0% | 5,9% | 5,1% | 5,3% |
The table shows that countries with a particularly sharp downturn in 2020 grew more strongly in 2021 than those with a more moderate downturn. Optimism for 2022 appears to be more important: A positive growth expectation is significant for two reasons: On the one hand, rising revenues make it easier to implement price increases, so that profits then also rise, and even more so, a positive assessment can be cited as the most important prerequisite for investment. The German state bank KfW published a survey on the investment behavior of small and medium-sized enterprises in October 2021. 62% of the companies then expand their investments if the sales expectation for their own company is positive. Conversely, 43% of companies reduce their investments when revenues are falling.
China - ELITE ROBOT
After his re-election, our Federal President Steinmeier said that the West had weathered the pandemic best. Well, he probably wasn't thinking about China. The country had far fewer fatalities than Germany or the USA. While Europe was paralyzed for a while, normality largely prevailed in China. Cobot manufacturer ELITE ROBOT, a partner in the article, has even built a major new production facility, stepped up its development and closed another round of financing. Since the company hardly uses any bought-in parts, the video shows more employees on the shop floor than in other companies.
Has consumer behavior changed as a result of the pandemic?
Since the beginning of the pandemic, there have been "winner" and "loser" industries. The "winners" in 2020 in particular included all industries that promote protection and/ or entertainment of the individual. These included leisure sectors such as two-wheelers (bicycles, also with electricity as well as motorcycles), mobile homes or consumer electronics. Construction suppliers were also among the winners. During the lockdown, do-it-yourselfers became active. On the other hand, gastronomy and culture lost out, suffering and still suffering from the often strict regulations imposed by the state. Sometimes they were closed completely, then they were only allowed to serve vaccinated people. The catering industry was and is being financially compensated, but is likely to suffer from a lasting exodus of its staff. The pandemic has shown that companies are unlikely to change their operations even in the face of severe staff shortages and extreme capacity shortages: Corona test labs in particular were very busy, but did not automate.
How has the European cobot market developed?
Significant for robotics was the cancellation of almost all trade fairs and often the dates of visits. Many entrepreneurs see a cobot for the first time at a trade show. This opportunity for often casual viewing was eliminated. Companies rarely buy cobots online or on the phone. They first want to meet their contacts and learn more about robotics. To do this, they want assurance that there is a custom solution that is just right for them. This was difficult to achieve at times in 2020/ 21. Regional network meetings at which entrepreneurs exchange information with each other were also hardly possible. After the first wave, which lasted until the end of May, the second wave began in October 2020. This was associated with a ban on visits to companies and, ultimately, a lack of willingness to make new contacts. Up to the present day, trade shows have practically ceased to take place, at best virtually. However, the benefits of virtual trade shows were very limited.
At the beginning of the pandemic in particular, robotics sales slumped massively. From the 3rd quarter of 2020, the development improved significantly and since then new sales records have been achieved. The figures of the market leader provide the necessary transparency here (blue line = estimate). Since its market share in Europe is unlikely to have changed much, its development is exemplary for the cobot industry:
In relative terms, the importance of cobots stagnated worldwide in 2020, as this graph illustrates:
In 2021, the development is likely to have been significantly more positive.
Development in Great Britain
At the start of the pandemic, Universal Robots' then-new Scottish distributor, SP Automation & Robotics, announced plans to sell £1 million worth of cobots in the first year of the collaboration. For a country with a population of just 5.5 million, that's a considerable sum. Since the company has been busy uploading cobot videos for the past two years, it should have been quite successful. This shows that an established company can launch a new product even in more difficult circumstances.
WMH Transmissions, the Universal Robots dealer with the largest showroom in the UK, generates less than €6 million. Preliminary balance sheet figures show recent stagnation.
Overall, then, development in the UK appears to have been stable. In contrast to Germany, however, there seems to be less competition in the UK. Companies founded in Germany such as Franka Emika, Yuanda, Neura Robotics, Agile Robots or RobCo are virtually unknown. And startups like Kassow Robots still seem to have a weak base in the UK.
Portugal: A country with considerable ELITE ROBOT market share
Portugal seems to be a special country for the robotics and cobot industry. On the one hand, there are only 10 million people living in the country and then also with their own language. On the other hand, there are many interesting manufacturing companies in Portugal, especially in electronics and precision mechanics.
In addition, the Chinese cobot manufacturer ELITE ROBOTS has a very active partner in Portugal. This has already been reported on here.
Italy: AutomationWare has invested heavily in its Cobot business
Automation specialist AutomationWare (Venice) has not gone into shock during the pandemic, but has invested in new partnerships. First it became a partner of ELITE ROBOTS, the partner of this article, and more recently of Geek+. In the video, Automationware introduces the Cobot as an in-house development, but I assume it is an ELITE ROBOTS.
Globalized robotics companies fared better
In Germany, there are many accessory companies in addition to some robot manufacturers. Schunk, Zimmer, Sensopart and many others are now compatible with various Chinese brands. Since ELITE ROBOT is configured like Universal Robots out of the box, some manufacturers were able to benefit from the more stable Chinese market without switching.
Which robot manufacturers are preferred?
Presumably because demand for cobots in the individual countries is still too low, there is no detailed breakdown by cobot manufacturer and country. However, it seems remarkable that the market leader in cobots, Universal Robots, is mentioned more frequently.
| # | Spain | Netherland | Portugal | France | Italy |
|---|---|---|---|---|---|
| Kuka | 60 | 17 | 74 | 20 | |
| Fanuc | 56 | 11 | 17 | 95 | 21 |
| ABB | 48 | 14 | 28 | 83 | 26 |
| Stäubli | 75 | ||||
| Universal Robots | 31 | 8 | |||
| Automotive | 54% | 58% | 45% | ||
| Food & Beverage | 48% | 35% | 36% | ||
| Pharma & Chemistry | 35% | ||||
| Metal & Machinery | 34% | 30% | 60% | 32% | |
| Logistics | 50% | ||||
| Electronic & Technology | 41% | 31% | |||
| Aerospace | 39% | ||||
| Energy | 36% | ||||
| Defense & Military | 29% | ||||
| Source: Interact Analysis |
High demand can be served
Now the sales are being achieved that were actually already expected for 2019. More astonishing than the sales development itself appears the extensive ability to deliver in times of chip shortage. From today's perspective, Germany and Eastern Europe have above-average growth potential in Europe. It should be borne in mind that it is not only the expected growth that counts, but also the starting point. This is likely to have been quite low everywhere. In absolute terms, the potential in Eastern Europe - and especially in Poland - is probably greater than in Italy. In Italy, on the other hand, the bulk of the cobots seem to be sellable in the north of the country. It also seems important to note that the data shown below was collected before electromobility took off and new chip plants were being built in Europe. In Germany in particular, a great deal is currently being invested in battery production and also further chip plants. This means that growth here could be even higher.
The further prospects for Cobot sales are very good. When differentiating by country, the typical industrial structure in the countries is also likely to be important. Are there more large-scale or small-scale production?
Complete solutions are gaining in importance
New Cobot customers in particular welcome complete offers. Ideally, one contact person sells them a complete workstation. This ensures cost transparency, one contact person, lower risk, and simpler processes in themselves. Complete welding cells, palletizing stations and placement robots are particularly worthy of mention. For the supplier, this offers the possibility of scaling; he only has to coordinate a system once. Any fine-tuning at the customer's site takes far less time. For the cobot manufacturer, this also offers the possibility of scaling, of reducing the workload, but also the risk of interchangeability. Brand-strong cell suppliers don't even name the cobot manufacturer. I.e. they could replace it at any time.
Perhaps the world's largest tool distributor, the Hoffmann Group, offers machine tipping based on an industrial robot (Nachi), but this also has a payload of only 12 kg. The reason for this is likely to be that strict regulations apply anyway due to handling with heavy parts, etc. At present, the solution, which is said to be available from €60,000 including area scanner and CE certification, is only offered in German-speaking countries.
It is also interesting that new providers who do not yet have a name themselves do not put the Cobot in the foreground. Cooking box manufacturers such as Aitme or Davinci Kitchen advertise their technology, but not the cobot they use. Why would they? The potential customer will be unfamiliar with the cobot manufacturer.
Only in the case of palletizing robots does the cobot manufacturer appear to be a purchasing criterion. This means that the supplier usually mentions the name of the robotics partner. This may result from the fact that the suppliers also come from the automation industry and are therefore just as familiar to potential customers as Demmeler, Lorch, Fronius, Heidenbluth, etc. in the case of welding.
New suppliers
Online platforms increasingly appeared during the pandemic. However, their emergence probably occurred independently of the pandemic. It was simply time. After all, cobots or robots are still not bought at the click of a mouse. For initial contact, however, a good online presence, including price information, offers the opportunity to reduce the inhibition threshold for making contact. There are about a handful of manufacturer-independent online providers. The business models differ:
- https://unchainedrobotics.de/: Largest marketplace for cobots (not industrial robots), also available in English. In Germany, they are also installed on site.
- https://www.go2automation.de/ Brings together integrators, manufacturers and users (mediation)
- https://coboworx.com/: The well-funded startup around ex-Fanuc Europe boss Gehrels began as an online integrator and now develops its own low-cost industrial robots that are installed in its own stations. A palletizing solution up to 30 kg is available from €2,800/month. Further complete solutions are in the pipeline.
Individual robot manufacturers offer online services themselves. ABB and igus are worth mentioning, and Doosan has an integrator online.
Vowever, are we networking? LinkedIn
-> To the Cobot group on LinkedIn(Link)
In my own account/advertisement
The author of this blog is significantly involved in the AI/robotics project Opdra. He advises robotics companies and investors on market analysis and funding/subsidies. More about him can be found here.