Magna CEO: Cheap robots may shift car-making from China to U.S.

Cites rising wages in China, import costs for heavy components
|hrreporter.com|Last Updated: 09/21/2015

FRANKFURT (Reuters) — The falling cost of intelligent robots may help repatriate some car manufacturing work away from low-cost locations like Chinaback to factories in Germany and North America, Donald Walker, chief executive of auto supplier Magna told Reuters.

Rising wages in China and the cost of importing heavy components like electric car batteries into Europe may lead established car makers to introduce more highly efficient automated manufacturing closer to home, Walker told Reuters in an interview at the Frankfurt auto show.

"If you have a high labour, easy-to-ship part, it has already gone, for the most part, to a low-cost jurisdiction," Walker said about the evolution of assembly work in the car manufacturing business.

"A bigger issue is how fast do you have intelligent robotics replace manual labour everywhere in the world," Walker said.

By 2025, the total cost of manufacturing labour is projected to fall between 18 and 33 per cent in countries which already deploy industrial robots, including South Korea, China, the U.S. Germany and Japan, a study on advanced manufacturing technologies by the Boston Consulting Group showed.

The emergence of hybrid and electric cars means auto makers have seen an increasing demand for large batteries, Walker explained.

"If you look at a battery, it is a big heavy thing to ship. The things that hold the battery, the bumpers, the wheels, those are big bulky parts," Walker said.

"I think you will still see cars made where the market is. And based on that, the big bulky parts and a lot of the technology in there, will probably be made locally," Walker said.

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