Midea eyes top spot for Kuka in China’s robot market

Bloomberg

Kuka AG, the German robot maker acquired last year by Midea Group Co. of China, needs to lower costs and win government recognition as a local brand to achieve its goal of becoming the No. 1 supplier in the Chinese market, according to an executive.
“Kuka has a reputation for reliability, but as you know, as a German company, they are not really well-known for low-cost products,” Midea Vice President Andy Gu said in an interview Wednesday in Shanghai. “We need to really work very hard to figure out how we can really reduce these costs.” In the meantime, Japanese competitors “are very aggressive in terms of grabbing market share,” he said.
Midea spent about 3.7 billion euros ($3.9 billion) last year taking over Kuka through a cash offer that faced both political opposition in Germany and scrutiny by the American government. The deal gave China’s top appliance maker control over one of the world’s leading industrial robotics companies just as the country embarks on an ambitious plan to automate its vast manufacturing sector. Demand is being spurred by rising labor costs, making China the biggest robot market in the world.
Capturing the top spot in China is a “clear goal,” Kuka CEO Till Reuter said in a separate interview, adding that the company is currently among the three biggest suppliers in the country with a 14 percent share, and aims to double annual sales over the next two years to 10,000 units.
The executives offered no details on how Kuka plans to lower costs as it strives to compete with Fanuc Corp. and Yaskawa Electric Corp. of Japan as well as Switzerland’s ABB Ltd. The four companies combined make almost all of the robots working inside global factories. Ahead of the takeover, Foshan, Guangdong-based Midea agreed to protect jobs and plants in Germany until the end of 2023 and not to pursue a domination agreement or delisting of the company’s shares.