Manufacturing AUTOMATION

Emerging economies drive growth of automation expenditures in automotive industry

April 1, 2013
By Manufacturing AUTOMATION

Automation expenditures for manufacturing processes in the automotive industry had strong growth in 2011, according to ARC’s Global Market Research Study.

The globalization environment drives manufacturers and other industrial operations to address initiatives for energy cost savings and reducing energy consumption, as well as for safety and sustainability needs.
As the economic recovery continued, the globalization environment resumed, which spurred automotive companies to invest in new automation equipment as companies faced challenges to raise productivity, lower product costs, and reduce plant operating expenses.

According to ARC’s recent report “Automation Expenditures in Automotive Industry Global Market Research Study,” automation expenditures in the automotive industry will grow at a compound annual growth rate (CAGR) of 3.6 per cent over the next five years.

“Automotive companies continue to demand energy efficiency, higher productivity, better quality, and flexibility in their operations. These demands directly benefit the automation suppliers and help foster their faster recovery from the past recession,” said Sal Spada, research director, ARC Advisory Group.
The developing economies are still the primary market growth engine for the global automation marketplace. Countries such as China and India are still investing heavily in a variety of industries. Developing economies continue to need improvements in their infrastructure. Investments in roads, water & wastewater facilities, airport facilities, and power plants will drive the direct use of automation equipment in these industries as well as supporting industries, such as automotive.


The rapidly expanding middle class in Asia, Eastern Europe, and Latin America is creating tremendous demand for new products. This new middle class is purchasing products across all segments, and more importantly, ones tailored to their tastes. Consumption is expected to grow in various industries in the coming years. As a result, industries will benefit, generating demand for more automation.
Automation suppliers recognize globalization is not only expanding business opportunities; but is also intensifying competitive pressures and causing the center of economic gravity to shift to new regions. Emerging economies will be the growth engines of the future. That is why the challenge for suppliers is to ensure global competitiveness by taking strategic actions to become leaders in the markets they plan to serve.
Despite the overall positive forecast for the automation expenditure in the automotive industry market, risk remains due to many factors such as looming debt crisis in developed nations and continuing political turmoil in the Middle East which could upset the growth trajectory.
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