Interact Analysis downgrades mobile robot forecast by 18%

Interact Analysis reduced its forecast for the global mobile robot market by 18% in 2027 due to a series of macroeconomic factors it said are impacting demand. This challenging climate has resulted in manufacturers and retailers slowing their investment into automation, and the research firm no longer expects a rapid uptick in AMR deployments before 2027.

In its latest report, Interact Analysis outlines:

• How governments have struggled in the aftermath of the pandemic
• How the retail industry is still going through a post-Covid correction
• Why China’s economy is weaker than expected
• How automotive has been hit by slow uptake of electric vehicles

Interact Analysis said that these external factors, coupled with 60 countries holding elections in 2024 and conflict in Ukraine and the Middle East, have constrained demand for mobile robots. Price declines are also slower than forecast, which has in turn slowed uptake, according to Interact Analysis.

Despite its more cautious forecast, the outlook for 2030 is still for double-digit growth, and Interact Analysis has created optimistic, base, and pessimistic scenarios.

What’s holding back mobile robots?

Interact Analysis’ survey of 300 buyers of mobile robots shows it expects automation spending to increase in 2024 by a mean average of 18% compared with 2023. It now forecasts customer uptake will continue to grow at a linear rate rather than exponential rate, while price declines will be slower than previously anticipated as labor costs increase, preventing an avalanche in demand.

The industry has prolonged its post-Covid correction as consumers return somewhat to pre-2020 buying habits. Interact Analysis also said consumer spending has been impacted by high inflation and interest rates. Nonetheless, companies are continuing their automation plans to mitigate risks associated with labor shortages, rising wages, and economic uncertainties, ensuring business continuity and resilience.

Mobile robot investments are by and large getting much bigger in size, and the associated due diligence and internal scrutiny are prolonging sales cycles. Interact Analysis said this double-edged sword causes some turbulence for robot vendors and, at the same time, plenty of upside potential.

With that in mind, Interact Analysis predicts mobile robot revenues will reach $5.5 billion in 2024 and grow at more than 20% annually up to 2030.

China sees slow growth domestically

China remained the largest market for mobile robots in 2023, contributing over 70% to the increase in unit shipments – underscoring its role as a manufacturing powerhouse. However, due to lower relative prices in the region, this accounted for only 32% of the total revenue increase, according to Interact Analysis.

Weakening domestic demand in China has accelerated efforts by Chinese vendors to grow in international markets, the research found. Increasing discontent in Europe and the U.S. over Chinese vendors undercutting domestic suppliers (outside of the mobile automation sector) raises the prospect of tariffs being introduced, which could also impact mobile robots. However, Interact Analysis expects recently announced stimulus policies in China to boost domestic demand over the next few years.

Chinese vendors continue to dominate the global mobile robot market, generating nearly 50% of all global mobile robot revenues and two-thirds of shipments in 2023. Companies like Geek+, HikRobot, and Quicktron lead the market, with strong growth both domestically and internationally.

Despite numerous acquisitions, Interact Analysis said the mobile robot market is not consolidating, as most acquisitions to date are by non-mobile robot companies. For example, Rockwell Automation acquired Clearpath Robotics and OTTO Motors. More vendors emerge each year and more industrial companies are launching AMRs, so the share of the top 10 and top 20 leading vendors has barely changed since 2018.

Labor shortages, rising costs drive mobile robot demand

Interact Analysis projects the installed base of mobile robots to exceed 4.2 million at the end of 2030, with nearly 1 million to be added in 2030 alone (and this excludes those used by Amazon). The labor shortage remains the biggest driver of demand for mobile robots, exacerbated by rising labor costs and the near-shoring and re-shoring of manufacturing.

However, high upfront costs, lack of interoperability, competition from fixed automation, and rising inflation and interest rates are significant barriers to mobile robot adoption. Reducing prices and the introduction of Robotics-as-a-Service (RaaS) and leasing models are helping to overcome these hurdles.

Despite the less favorable mid-term outlook, Interact Analysis still anticipates double-digit revenue growth of 20-30% annually out to 2030 and the overall long-term picture remains positive. This follows the growth of shipments in 2023 of 23%, reaching almost 150,000 over the year.