Industrial Automation Magazine India

Automated Guided Vehicle (AGV) Market size to grow by USD 1,395.15 million

Published on : Tuesday 06-06-2023

From 2022 to 2027, 36% of the overall growth will originate from Europe; rapid growth in E-commerce retail to boost the market growth – Technavio.

New York, June 5, 2023 – The automated guided vehicle (AGV) market size is expected to grow by USD 1,395.15 million during 2022-2027, progressing at a CAGR of 8.97% as per the latest Technavio market research report. Europe is going to have lucrative growth during the forecast period. About 36% of the markets overall growth is expected to originate from Europe. Europe is seeing strong demand for large warehouse spaces. There is also a growing demand for warehouses near metropolitan areas to support last-mile delivery models. In Europe, increasing online sales are increasing the demand for warehouse space in the region, increasing the demand for warehouse space among e-commerce merchants. This has increased demand for the companys AGVs in Europe. Increased acceptance of AGVs and continued growth in the corporate sector are also stimulating demand for AGVs in the region. Furthermore, the European energy industry is undergoing major changes due to investments in smart grids and renewable energy. Several European countries are planning to increase the share of renewable energy in their energy mix to reduce CO2 emissions from fossil fuels. Such factors drive the growth of the market during the forecast period.

The rapid growth of e-commerce retail is driving the growth of the AGV market. Consumer preferences are rapidly shifting from traditional retail to e-commerce due to various factors such as diversified product portfolio, competitive prices, and shopping convenience. E-commerce is experiencing significant growth not only in developed markets such as the United States, but also in emerging markets such as India and China, with several major companies such as Amazon and Walmart having a presence in emerging markets in the Asia-Pacific region. Additionally, as e-commerce retail becomes more popular, the need for warehouses and distribution centers is increasing, especially in emerging markets. Therefore, e-commerce retail growth is expected to continue to drive the growth of the global AGV market during the forecast period.

Rising warehouse automation is the key trend driving the AGV market. End-users require products in a variety of package sizes. Different packaging systems increase the quantity of goods in a consumer goods warehouse. The proliferation of SKUs is driving warehouse automation around the world. To maintain many of these SKUs, the consumer goods manufacturer will face productivity and cost-efficiency issues. This has led manufacturers and wholesalers to choose automated warehouses. In addition, warehouse automation improves the speed and accuracy of fulfilling orders before product expiration dates (for perishables such as groceries). In addition, warehouse automation allows the supply chain to remain efficient even with seasonal product demand. Warehouse automation also reduces the time it takes to replenish shelves.

Fluctuating prices of raw materials are the key challenge in this market. Raw materials and parts used in the manufacture and construction of AGVs include mild steel, forged and machined steel bars, steel tubes, steel bars, electric motors, reducers, bearings and other electromechanical parts. Steel is one of the most important raw materials for manufacturing various AGVs. Since steel is made from iron ore, fluctuations in iron ore prices have a direct impact on steel prices.

For example, iron ore prices increased by about 90% in July 2019 compared to January 2019. As commodity prices reach a threshold, commodity suppliers are forced to pass on higher prices to downstream industries. Such decisions by raw material suppliers affect the growth of various industries as well as manufacturers of handling and lifting equipment. This may pose challenges to the growth of the global AGV market during the forecast period.