Has the rise in robot prices subsided？

"Affected by the global economic environment, the prices of raw materials such as chips, labor costs, and logistics costs are rising, which have led to a significant increase in the overall cost of robot products..."

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"To ensure continuous provision of higher quality products and services, the company has decided to adjust the price of the whole series of robot products after research..."

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"The price of signed orders remains unchanged, and the project and product orders signed after the price adjustment takes effect will be subject to different increases according to the cost growth of robots of different models..."

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From January to July 2022, domestic and foreign robot ontology enterprises issued price increase letters (please click for details). In August, with the normalization of epidemic prevention and control and the gradual flow of logistics, the "price rise tide" seems to be gradually calming down.

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In fact, in addition to the reasons mentioned in the notification letter, several domestic robot ontology enterprises that have always been "cutting prices" have welcomed this wave of price increases. What are the deep reasons?

From January to July 2022, domestic and foreign robot ontology enterprises issued price increase letters. In August, with the normalization of epidemic prevention and control and the gradual flow of logistics, the "price rise tide" seems to be gradually calming down.

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In fact, in addition to the reasons mentioned in the notification letter, several domestic robot ontology enterprises that have always been "cutting prices" have started this wave of price increases. What are the deep reasons?

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As the first one to raise the price of domestic robots, Inovance Technology, when receiving a survey in March, said that the company's product prices were affected by two factors on the whole: market demand and the supply situation of raw materials. "For the company, at present, it is mainly affected by the supply of raw materials."

Since the end of 2020, the prices of copper, rare earth, silicon steel, aluminum, and other bulk materials have continued to rise. According to Gaogong Robot, the main raw materials of the robot industry chain include electronic materials, magnetic steel, aluminum metal structural parts of the robot, reducer, etc. Among them, the price of metal raw materials required for magnetic steel, reducer, and other components remained high, and the shortage of chips and some parts continued, which had an impact on the normal production and delivery of automation core components and robots.

Affected by the global macro-economy, trade war, epidemic prevention and control, natural disasters, etc., if the raw materials continue to rise and the supply of chips and other key materials continues to be unbalanced, the cost of robot enterprises' products will change significantly.

For example, when talking about the impact of the epidemic in the second quarter, Effort analyzed that most of the company's manufacturing resources were in Wuhu, which was relatively less affected by the epidemic. However, the company's supply chain is mainly in Jiangsu and Zhejiang provinces. At the same time, some secondary and tertiary materials come from overseas. For example, some parts of the motor and some chips of the controller purchased by the company need to be imported from abroad. The logistics in Jiangsu and Zhejiang provinces are blocked due to the epidemic, and the imported materials in Shanghai cannot be picked up on time, which has a certain impact on the company's robot business.

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Based on this, in China, the rise in prices was initiated by domestic enterprises with a certain scale in the field of robot core parts, such as Delta, Inovance Technology, HCFA PAC, iNextbot, and Laifual Harmonic, and then transmitted to industrial robot enterprises, such as Eston, Effort, Peitian Robot, Rokae, Atom Robot, and IBD Robot.

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In recent years, smart cars, smart home appliances, and other industries have developed rapidly, and there is huge room for growth in the future. Most chip manufacturers choose to focus on industries that "earn big money and high gross profit", such as binding tier manufacturers of new energy vehicle enterprises to "occupy a place" for the future. Therefore, chip manufacturers will invest most of their production capacity and energy in these areas, and then strategically give up the market with slow growth, such as the robot industry market.

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That is to say, chip manufacturers will choose to "fill up" in the new energy industry before transferring their production capacity to other industries. As a result, the supply and demand of chips and other key materials are unbalanced, and the prices rise.

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In the robot field, chips are usually used in control systems and servo systems. An industrial robot generally needs to carry MCU (micro control chip), DSP (digital signal processing chip), and other chips.

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According to insiders, in recent years, the price of chips for robot applications has risen from more than 20 yuan to more than 100 yuan, and then skyrocketed to more than 600 yuan. Due to tight delivery, the cost is higher to catch up with the handover. Recently, due to the shortage, chips in stock have even been speculated by the market to be thousands of yuan.

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According to the analysis of insiders, the price rise of chips is one aspect, but the shortage is the most fatal. After all, there is still a standard for the price increase, but the shortage means that the purchaser needs to buy from the secondary market and the agent market. As a result, it is more difficult to buy materials and the procurement cost rises.

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He further analyzed that the price increase of robot ontology enterprises had no impact on the shipment. "Enterprises with orders are basically out of stock. The reason for being out of stock is not because of the price rise, which does not mean that I can buy raw materials at a higher price if I want to buy them, but because I can't buy them. In other words, if I can buy raw materials now, robot enterprises can buy raw materials at a higher price, even if they buy raw materials at a higher price, it is OK to seize the market by losing a little." He said with a smile: "That is to say, I will pay twice as much as others for the chip, and lose tens of millions of RMB a year. But I am also very willing to deliver 20,000 to 30,000 units a year."

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This is why it is difficult for foreign first-line robot brands to deliver when they have money and orders. The key point is the shortage of raw materials.

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For industrial robots, there is a basic pricing logic. Domestic robot enterprises will price their products concerning foreign first-line brands. This is one of the reasons why the price increase of foreign robot brands will be about 10% in 2022, and that of domestic robot brands will be about 2% - 8%. Industry insider analysis: "The prices of the four major companies have risen substantially, while those of domestic companies have risen a little, and the price gap is still 15%."

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Mr. Wang Fukang, deputy general manager of Effort, pointed out that in fact, the price increase of foreign robot brands has even reached 50% - 60%, thanks to the dependence of end customers on brands, while the influence of domestic robot brands is not enough to form strong dependence from customers.

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In the field of cooperative robots, Mr. Cao Yunan, chairman of Elite Robot, analyzed that the main suppliers of collaborative robots are domestic manufacturers. Collaborative robot enterprises, including Elite Robot, are growing rapidly, and the purchasing number of domestic harmonic reducers is increasing, so the supply chain side is reducing prices, but the decline is not enough to make up for the price increase of other materials, so the overall cost is rising.

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However, for collaborative robot enterprises, the market is currently competitive, and there is no condition for a price increase in the short term. This situation also applies to mobile robot enterprises. Mr. Zhang Chaohui, CEO of Youi Bot, pointed out that the price of components generally increased by about 10%, "while the bigger problem faced by mobile robot enterprises is the delivery date. The original delivery date was only 30 or 60 days, but now it has become 180 days, 270 days, and 360 days, resulting in a double pressure on the stock."

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On the whole, in 2022, the overall prosperity of the industrial manufacturing market is not high. In the past, robot enterprises "cut prices to ensure the quantity". This year, even if they cut prices, they will not be able to increase the quantity. Because downstream end customers are also in dire straits, the demand, in a big possibility, will not increase significantly.

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Therefore, when the domestic robot brand becomes effective and gets the recognition of the terminal big customers, the domestic robot manufacturers will have the confidence to selectively give up small customers, to ensure the supply of big customers. Because the price reduction logic of robot ontology is batch, and even if the price is reduced for small customers, it is impossible to increase the purchase volume in a short time.

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For foreign brands, the price increase is based on the consideration of the profit priority strategy. For domestic brands, due to the transmission of the cost pressure of the upstream supply chain, industrial robot parts and robot products have a strong desire to increase the prices, but more use the internal digestion strategy, such as "the upstream may have increased by 15%, we have digested 10%, and slightly increased by 5%." "It's not going up at this time, but when."

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The underlying logic behind the price increase is on the one hand to hedge against the loss of the decline in delivery, and on the other hand, the price is determined by competition to a certain extent. When talking about specific projects, there is a situation of "one single discussion for one single case". The enterprise issues a notice of price increase for major end customers, more to gain customers' understanding and reduce the game on product prices. That is, "form is greater than reality".

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For this reason, each listed company in the robot industry has taken a series of measures to continuously improve the gross profit margin, such as realizing the localization of raw materials through research and development, reducing costs, and achieving self-control; Strengthen lean management in supply chain management, manufacturing efficiency improvement and other aspects to control management costs; According to market changes, timely adjust product prices and transfer the impact of some cost increases; Actively promote market expansion, reduce the allocation of fixed costs through business growth, and constantly improve the level of gross profit margin.

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It can be predicted that the robot body manufacturers still have the pressure to prepare goods, and the delivery problem is still serious. For this reason, based on the fact that the products supplied by domestic robot ontology enterprises to customers are not completely unified standard products, the product price strategy can be selected in a more flexible way as a whole and combed according to different customers and different competitive situations. The ultimate goal is to maintain the delivery advantage and give full play to the competitiveness of "available goods, fast delivery".