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Industry 4.0: German Car Industry Introduces Collaborative Robots

October 3rd, 2016

The automotive industry is already one of the most automated globally, but the German car industry is planning to increase its levels of automation even further by introducing collaborative robots on assembly lines for the first time. Collaborative robots are anticipated to help an ageing workforce in German factories cope with the workload. In addition, new types of robots will help to boost employee productivity and withstand increasing competition from Asian rivals.

Robot helpers to be employed for the first time in the German automotive industry

The automotive industry is already one of the most heavily automated industries, with the Fourth Industrial Revolution (Industry 4.0) anticipated to increase the number of robots in car manufacturing even further. The German car industry is at the forefront of Industry 4.0, introducing small-scale collaborative robots on the assembly line for the first time.

Previously, robots replaced human employees to perform monotonous or hazardous tasks. Now, however, German car manufacturers are introducing robots that will collaborate with humans and act as helpers.

Audi was one of the pioneers of the new technology, introducing a robot that hands coolant expansion tanks to line workers at its Neckarsulm production facility. Volkswagen has also employed similar helper robots to assist during car assembly, as have Mercedes-Benz and Opel.

The introduction of helper robots is necessary for German companies, as are they are faced with a looming shortage of workers and an ageing population. In addition, German car makers are hoping new types of robots will spur productivity growth, as Germany’s automotive industry is starting to fall behind South Korea, and is facing a potential threat from China.

Helper robots to ease the shortage of workers caused by an ageing population

Despite a common belief that automation eliminates jobs in the automotive industry, the opposite is happening in Germany as well as other nations. During the 2010-2015 period, the number of employees in the German automotive industry expanded by 14% to reach 710,000 workers in the latter year.

Premium car makers in Germany are offering highly individualised models in relatively low volumes. High levels of individualisation create great complexity, for example Audi stated that its 1,200 suppliers deliver 56,000 different components to its Neckarsulm facility. Such complexity requires dexterity and problem-solving skills, something that robots are not capable of, thus keeping German car manufacturers heavily dependent on human workers.

However, the German population is ageing, with the median age in Germany standing at 46 years. The ageing population alone is expected to create a shortage of 1.8 million workers by 2020. Long-term prospects also look dim, as the number of people aged 20-65 is expected to shrink by 7% to 2030.

Such demographic trends are forcing German automakers to invest in robots. Creating robots with human-like dexterity and problem-solving skills would be too expensive and inefficient, so the German car industry is investing in helper robots that will help an ageing labour force to cope with the workload.

Overall, the German automotive industry is forecast to expand at a CAGR of 3% over 2016-2025, sustaining the great need for new types of robots.

german-auto-industry-employee-population

Boosting efficiency to withstand competition

The German car industry fears that a lack of robots will make it harder to withstand competition from Asian manufacturers, and South Korean automakers in particular. Over the 2010-2015 period, the productivity of the German car industry (production value per employee) grew 11%. In comparison, productivity in the South Korean industry was raised by 23% over the same period. While the productivity of the Chinese automotive industry remained well below German levels, it nevertheless grew by an impressive 117%.

Motor Vehicle Industry Productivity in Selected Countries

auto-industry-productivity

Source: Euromonitor International from national statistics

Productivity growth greatly correlates with the number of robots. A panel of German scientists on the national commission claimed that the number of robots in the German car industry expanded by 7% over 2011-2014, compared to double-digit growth in China. The German national commission also found that the German car industry had 1,149 robots per 10,000 employees, fewer than Japan and on a par with South Korea and the US.

A lack of robots and high labour costs puts the German car industry at a disadvantage against its foreign rivals. As of 2015, Germany was the third largest car producer in value and fourth largest in volume. Germany’s global value share, however, declined from 13% in 2010 to 10% in 2015 due to increasing production in Asia and the US.

The growing number of helper robots in car factories could help reverse this trend and boost the efficiency of the German car industry. For example, BMW, the third largest manufacturer in Germany in 2015, has ambitious plans to cut costs by 5% per year. The manufacturer believes that investing in helper robots and optimised working stations will help to achieve this as well as cope with increasing car production volumes.

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Justinas Liuima

Justinas Liuima is a Senior Industry Analyst at Euromonitor International. He holds bachelor’s degree in Economics from ISM University of Management and Economics and now studies in International Marketing Master’s programme. Justinas started working in Euromonitor International in 2013 as an Industry Analyst in Passport Industrial team where he analyses transportation industries. Professional interests include motor vehicles, aircrafts and market research. You can find him on LinkedIn.

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