Summary

The Latin America Automated Storage and Retrieval System market is expected to grow at a CAGR of 9.88% during the forecast period (2021-2026). The COVID-19 outbreak and lockdown restrictions across the globe have affected industrial activities across the world. Some of the effects of lockdown include supply chain disruptions, lack of availability of raw materials used in the manufacturing process, labor shortages, fluctuating prices that could cause the production of the final product to inflate and go beyond budget, shipping problems etc. All businesses across the region with crucial assets for manufacturing goods and services offering revenue have been experiencing a rapid decline due to the COVID-19 pandemic. The management of such companies has been feeling extreme urgency and panic, thereby, more emphasis being paid to cutting costs. Since manufacturing activity was low, companies were tempted to eliminate maintenance, resulting in significant expenses in the coming future.

Key Highlights
Latin American nations have transformed themselves into a set of fast-growing, emerging economies. Companies with manufacturing plants in China are moving some production to Mexico and Brazil to reduce supply chain risk and serve the American market.
Moreover, automation has revolutionized the warehouse business in the region, thereby helping companies reduce overhead costs and increase productivity with consistency and accuracy. Artificial intelligence plays a significant role in achieving this. Online retailers are making every effort to reduce the time it takes to deliver products to customers.
Many automotive and electronic companies are investing in new technologies to reduce their cost and attain efficiency. For instance, Mecalux, a prominent vendor in the warehouse robotics market, installed automated stacker cranes for boxes in Continental’s plant (Mexico), along with other conveyor systems and computerized operations at cargo entrance and exit. Such use cases of cranes as a complementing solution are expected to increase over the forecast period.
The primary driving forces for the growth of the Latin America regional segment are the rising urbanization, rising e-commerce sales, and the significant presence of technology providers. These players invest in research and development activities to offer innovative solutions to stay competitive.
Further, with virtually zero market access barriers and a highly developed industrial base, Mexico has evolved to become the largest purchaser of automation from the United States. The proximity of the Latin American region with Europe and North America has helped the emergence of component suppliers, impacting demand for AS/AR systems suited for such needs.


Key Market Trends

Automotive is Expected to Hold Significant Market Share


The automotive industry is undergoing a positive transition in Brazil and Columbia. Moreover, Brazil and Argentina signed a free trade agreement for the automotive sector. Both the countries will gradually phase out trade tariffs for each other in the automotive industry. These are expected to bring automation to the automotive industry, thus paving the way for AS/RS in this region.
Further, organizations like Festo are preparing strategic locations for shipments to Mexico and Central America. Recently, Festo published a news release stating that a facility in Cincinnati, which is strategically close to the airport and could support the expected growth in Mexico, is becoming a recognized hub for the automotive industry.
The coronavirus crisis has struck auto production around the world but hit Brazil the hardest. According to the automakers association, Anfave, Brazil’s automobile production rose in June 2020 from May 2020 by 129% but remains 58% lower compared with the same month in 2019. It also expects auto production to fall by 45% in 2020 compared to a year ago, while exports will lose 53% in the same period.
Moreover, the advent of electric vehicles and hybrid cars has revolutionized automobile manufacturing in the past decade. Automobile production has become far more sophisticated and complex. The ever-evolving government safety regulations and industry standards are further complicating the assembly line tasks.
This has created a significant demand for automation in the automotive sector. Minimizing products damage during transit (caused by human error) and increasing the speed of handling the chassis between workstations (which would allow interaction with assembly-line workers) are receiving the utmost priority. Such trends are expected to boost the adoption of warehouse robotics across industries in the region.


Mexico is Expected to Account For Significant Market Share


The expanding millennial population and the increase in disposable incomes create many opportunities for retailers like Amazon to introduce new product lines, creating a considerable need for advanced warehouse facilities. In such high throughput warehouses, AMRs can help scale up the efficiencies and mitigate labor challenges.
In October 2020, Amazon announced USD 100 million logistics investment in opening new warehouses in Mexico, including its first shipping centers outside the populous capital area, to offer faster deliveries. The new sites include two fulfillment centers, one near the northern city of Monterrey and another near the central city of Guadalajara. Additionally, the company is also striving to make inroads in Brazil, where it recently opened its fifth and biggest fulfillment center in the country, with 100,000 square meters. All these investments are expected to drive the utilization of ASRS in the warehouse.
Further, many people in the country opting for e-commerce for their daily necessities, such as drinks, biscuits, and shampoos. The retail market is expected to experience rapid growth during the forecast period and help increase the adoption of automation in retails.
Moreover, advanced technology has given rise to equipment and processes that have transformed the country's food and beverage sector. The food and beverage industry has traditionally relied on human workers to handle functions like distribution and storing; robotics are being developed and implemented to streamline the process and produce more consistent output.
In food automation, it is essential to ensure properly sanitized machinery to avoid product contamination, resulting in consumers contracting foodborne illnesses. The current trend of automation has witnessed the development of new technologies that can provide end-to-end automation for the production of certain processed foods in Mexico.


Competitive Landscape

The Latin American automated storage and retrieval system market is moderately concentrated due to higher initial investments. It is dominated by a few significant players like KION GROUP AG, Bastian Solutions, LLC, SSI Schaefer AG, Murata Machinery Ltd., and KNAPP AG. With a prominent share in the market, these significant players are focusing on expanding their customer base across foreign countries. These companies are leveraging strategic collaborative initiatives to increase their market share and increase their profitability. However, with technological advancements and product innovations, mid-size to smaller companies are growing their market presence by securing new contracts and tapping new markets.


September 2020 - KUKA AG launched the KR SCARA horizontal jointed-arm robots that are ultra-compact and at the same time deliver maximum cost-effectiveness. The robot reaches 500 or 700 millimeters, a short cycle time of just 0.36 or 0.38 seconds. The KR SCARA robots are ideal for pushing ahead with automation in cost-sensitive markets. ​
August 2020 - Geek+ Inc is expanding with its first South American project, following the US & Mexico deployments. The company announced its expansion into South America with its first robotics project, providing intelligent logistics solutions to Walmart Chile, the largest supermarket chain in the country. Walmart Chile brought Geek+ AMRs to South America, upgrading its supply chain operations.


Additional Benefits:

The market estimate (ME) sheet in Excel format
3 months of analyst support

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