German Maker of Robots Gains as Chinese Wages Rise

Kuka, the largest European maker of industrial robots, is creating a regional hub in China to develop sales in a country where rising wages are lifting demand for automated factory gear [..] “China alone bought 15,000 robots last year, and we expect that number to rise to about 20,000 this year,” Mr. Reuter said. The company’s target of an operating margin of 10 percent at the robot unit “is within reach,” after having reached 9 percent in the fourth quarter, he said [..]

Rising wages, a push for quality and demands for faster production are prompting the Chinese manufacturing industry to buy more robots, helping European companies like Kuka and ABB turn lagging businesses into profit centers. Kuka’s robots have become twice as profitable as the company’s larger systems unit; ABB turned its robot unit around in 2010 [..]

“Salary inflation is the driving force behind robot demand in China,” Michel Demare, the ABB chief financial officer, said in February.