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The global automated guided vehicle market was valued at USD 2 billion in 2021. The market is projected to grow from USD 2.17 billion in 2022 to USD 4.11 billion by 2029, exhibiting a CAGR of 9.6% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with automated guided vehicle experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a decline of 8.84% in 2020 as compared to 2019.
Automated guided vehicles are material handling automated machines that are programmed to move pallets, carts, and trays, among others between different manufacturing and warehousing facilities. They are installed by these facilities to enhance efficiency, which results in increased output, thereby increasing the profit margin of the company. The industries now tend to focus more on efficiency and not just increase productivity. This can be seen as many manufacturing facilities and others are considering implementing various methodologies such as JIT (Just in Time), KANBAN, and others.
AGV systems help move and carry products in industrial plants, warehouses, and distribution centers without the necessity of a fixed conveying system or user involvement. It follows adjustable guidelines to optimize storage, picking, and transportation tasks in a premium space environment. AGVs are widely used due to various advantages, including lower labor costs, less product damage, higher productivity, and the ability to grow to support automated operations. These significant benefits incentivize transportation and logistics companies to use AGVs to improve the efficiency of their operations.
Moderate Growth Expected Owing to Adoption of AGVs across Various Industries
Many businesses have suffered or are experiencing losses, owing to a production gap due to statewide imposed lockdowns to stop the virus transmission. The manufacturing industry witnessed a significant drop in earnings and income as a result of the COVID-19 pandemic. Business operations have seen a large reduction in workforce, resulting in overall loss in manufacturing activity. Due to significant layoffs, financial difficulties, and attrition, small & medium enterprises (SMEs) were the worst impacted.
Furthermore, during such instability, the deployment & industrial automation of AGVs played a critical role in safeguarding enterprises to achieve their production goals. The pandemic has formed several opportunities for this industry by enabling businesses to continue operating.
However, industry operations are rising as a result of mass vaccination in numerous nations. In 2021, this market was expected to grow rapidly as global economic conditions improved and demand for industrial products rose. Many businesses, including healthcare, e-commerce, and food and beverage have adjusted their operations as a result of the new normal.
Therefore, the market is expected to grow in 2021, owing to the adoption of automation in all industries, and the market size is predicted to grow faster than it was during pre-pandemic.
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Deployment of Industry 4.0 in Warehouses to Accelerate Market Growth
Conventional industrial facilities are gradually developing into smart, networked, and highly efficient automated facilities by integrating Industry 4.0 concepts. In addition, Industry 4.0 has the ability to transform a manufacturing facility into a self-contained operation as it is a single automated unit that incorporates computers, industrial automation systems, and robots. A smart architecture capable of making decentralized choices is created by a network of linked devices. Additionally, the rise of Industry 4.0 is transforming the way warehouses operate & Industry 4.0 also intends to establish a productive working environment in which people and robots can collaborate well.
Furthermore, the integration of Industry 4.0 and robots would turn processes into an industrial space with greater automation system coordination. In the extremely demanding and constantly expanding supply chain environment, this integration will enable high-velocity operations at lower costs along with making it time-critical.
In the extremely demanding and constantly developing supply chain environment, the deployment of Industry 4.0 technology has aided active communication between warehouse activities along with improving warehouse system coordination and assists warehouse operators in performing time-critical and high-velocity activities at a reduced cost, further contributing to the automated guided vehicle market growth.
Rising Automation Solution in Material Handling Process to Boost Market
Presently, improved technology in the material handling process has enabled industries to have linked factories, leading to the adoption of automated material handling operations with the help of advancements such as Big Data, machine learning, and others. This allows them to have more flexible production processes, better quality control, and better labor management. As the e-commerce sector is growing across the world, the use of automated material handling systems is also increasing its presence. Amazon, Walmart, Alibaba, and others are focused on material handling process automation to cut operational costs and expand inventory sizes.
In addition, the increasing demand for automation is further rising in the automotive, healthcare, e-commerce, and food and beverage industries due to the general requirement for high efficiency. Additionally, AGV-enabled industrial facility automation may assist satisfy material handling capacity needs while also lowering production time, minimizing the risk of human mistakes, improving safety, assuring high production volumes, and boosting precision and repeatability.
Hence, these systems are an aid in warehouses to save money in the long run by reducing labor expenses in various ways, thereby increasing the global automated guided vehicle market share.
High Installation Cost & Initial Investment Involved to Hinder Market Growth
The businesses that deploy AGVs to automate the production process or supply chain need to invest a significant amount of money. This includes the cost of purchase, installation, and the expense of making the working environment more AGV-friendly. In addition, the expensive cost of high-end AGVs may deter manufacturers from using them. As small industries are obligated to rely on traditional/manual forklift trucks as they cannot afford automated systems, AGV adoption could be slowed among smaller industries.
Additionally, the expense of maintaining AGVs, which varies depending on their age, kind, location, number of shifts each day, and condition, is also a stumbling block to the market expansion. Therefore, due to high capital costs and a long return period, organizations find it difficult to invest in automation solutions.
Furthermore, businesses are facing difficulty in adapting to changing requirements of the hour in the middle of a continuous pandemic. Therefore, companies are now experiencing a severe financial shortage, and as a result, they are being forced to lay off their employees and labor force.
Based on the severity of impeded economic activity due to the exceptional period, this is projected to damage businesses in the coming years.
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Automated Forklift Trucks Expected to Grow at Higher Rate
By type, the market is segmented into automated forklift trucks, tow vehicles, assembly line vehicles, underride/tunneling vehicles, and others (unit load carriers).
Automated forklift trucks are predicted to account for a significant amount of the market share. This is due to the machine's design and use, which gives forklift trucks improved stability, control, and storage capacity. Furthermore, the bulk of industry participants provides automated forklift trucks as standard equipment.
The others segment, which includes unit load carriers, is predicted to hold the largest market share over 2022-2029. Additionally, due to their specialized use cases in several sectors, underride/tunneling vehicles, tow vehicles, and assembly line vehicles are expected to grow at a modest rate during the forecast period.
Tow vehicles are predicted to show major growth in this market. These vehicles are used to pull non-powered carts with heavy loads. As they can carry greater loads with several trailers than a single fork truck, they are the most productive form of AGV utilized for towing and pulling.
Laser Automated Guided Vehicle to Hold the Largest Market Share
By navigation technology, the market is segmented into laser-guided, magnetic guided, vision guided, and others (wire-guided).
The material handling sector is expected to witness growth in the laser guiding sub-segment, owing to its functioning as an electronic eye to avoid impediments in the route. Laser systems are attractive due to their mix of flexibility and precision since they face problems in the environment with barriers while performing operations.
Moreover, magnetic AGVs and Vision Guided Vehicles (VGVs) are expected to witness considerable growth in numerous areas due to their flexible construction. Wire-guided and other forms of automated guided vehicles make up the others segment, which is expected to increase at a modest rate.
The autonomous guided vehicles' camera-based vision, which is supplemented by LiDAR sensors and computer systems, aids in accurate navigation throughout industrial facilities and warehouses. The cameras on these vehicles can help in information gathering and obstacle detection. It can also aid in real-time analysis of infrastructure within facilities. The data from the LiDAR sensors and cameras may be used to create a three-dimensional picture of the operational area.
Automated Transportation & Distribution Process to Bolster Market Growth
By application, the market is segmented into transportation & distribution, storage & assembly, and packaging.
The transportation and distribution segment is anticipated to grow at a rapid speed due to its adoption across a variety of sectors. AGVs are used in a range of industries and facilities to transport items and products from one location to another. Various industries employ the transportation and distribution process to transfer goods and commodities such as paper, plastic, metal, rubber, and steel.
For operations, such as the movement of empty bottles, containers, pallets, and carrying items from the end of the manufacturing line to storage, among others, storage & assembly as well as packaging applications are required.
Furthermore, the storage & assembly segment is expected to show considerable growth during the forecast period. It is attributed to the modern retrieval and automated storage systems, as well as other material handling equipment, which is being rapidly adopted by businesses modernizing existing facilities and developing new facilities to save labor costs and increase efficiency and production.
The packaging segment is predicted to witness considerable growth, owing to businesses trying to improve the efficiency of their operations. These companies are using AGV systems as they can navigate correctly and effectively across short aisles and compact layouts as well as improve the storage process' dependability.
Increasing Material Handling Process from E-commerce Industry to Accelerate AGV Market Revenue
By industry, the market is segmented into food & beverage, automotive, e-commerce, and others (healthcare).
The e-commerce segment is estimated to show strong growth due to the expanding business of major e-commerce firms such as Amazon, Alibaba, and others. AGVs are utilized in the automotive sector to transfer tools, automobiles, engines, chassis, and other items. Pickup, transfer, and drop are the three steps required.
AGVs also help in the integration of material handling systems, ERP systems, high-rack storage systems, and warehouse management in the food & beverage and e-commerce industries. Additionally, commodities in these businesses are identified with barcodes and RFIDs, making it easier for AGVs to detect the product and transport it to the needed location.
Moreover, the automotive industry is expected to show higher growth during the forecast period due to the AGV’s large presence in industries where bulk material of transportation is required such as the automobile and food & beverage industries.
The benefits of AGVs in terms of productivity, safety, and precision are driving their widespread adoption across numerous sectors such as healthcare and others. AGVs are outfitted with cameras, laser heads, and other sensors to aid in their safe operation around machinery, buildings, and people. While operators in a production or distribution facility might make mistakes that lead to accidents and disasters, AGVs can assist improve workflow precision, thereby decreasing waste and increasing efficiency.
North America Automated Guided Vehicle Market Size, 2020 (USD Billion)
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The report's scope comprises five major regions, North America, Europe, Asia Pacific, the Middle East & Africa, and South America.
North America is predicted to exhibit dynamic growth as the region with the largest automated guided vehicle market share during the forecast period. The growth is being driven by the increase in the number of import and export operations. To optimize warehouse operations and attain maximum productivity, warehouse operators are increasingly utilizing automation technology. To meet rising client needs, companies operating in the region are developing new items with modern technology. Pallets may be automatically loaded and unloaded with the equipment.
Strong Presence of Key Players in the U.S. to Fuel Market Growth
Moreover, the U.S. is expected to grow significantly as it is one of the world's most advanced nations. As a result of significant R&D, the businesses provide both customized and basic AGVs. This comprises practically all types of guiding systems such as laser, wire, and magnetic guided systems. The most cost-effective and efficient AGV solution is available with this vast selection of goods on the market.
Asia Pacific is expected to exhibit exponential growth owing to the rapidly increasing e-commerce industry in various countries, including China, India, and Japan. Several governments in Asia Pacific are adopting a variety of steps to encourage the growth of the region's manufacturing industry, presenting attractive market expansion potential. In this region, with rising economies, such as China and India, the e-commerce business has been rapidly rising. In addition, the e-commerce industry is surging and some e-commerce businesses are considering expanding into these regional markets. Therefore, competition in the e-commerce business has increased, and industry incumbents are attempting to differentiate themselves by reducing the time it takes to deliver items to end-users.
Furthermore, Europe is anticipated to show stable growth during the forecast period. The rising demand for material handling equipment by the manufacturing industry's incumbents is driving the regional market growth. Furthermore, automation in every industry has aided regional market expansion. Key players are also focusing enhancement of products to support the development of industry 4.0 and industrial automation. In addition, the market is likely to see an increase in governmental and private sector investments in the field of sustainable development.
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The Middle East & Africa and South America are expected to exhibit considerable growth during the forecast period. The rise in urbanization and growth in industrialization are significantly contributing to the market growth. In addition, AGVs in warehouses assisting e-commerce companies are automating the intralogistics processes such as sorting, picking, and palletizing, resulting in increased productivity. Additionally, a growing financial institution is assisting in the development of technologies, which might boost the industry in this region.
Leading Players Offering Variety of Solutions to Intensify the Competition
Leading players are enhancing their offerings in the market and using a variety of organic and inorganic development tactics, including new product releases, contracts, partnerships, collaborations, acquisitions, and business expansions. These market players are investing in R&D to integrate the latest technologies to improve performance.
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The automated guided vehicle market research report provides a detailed analysis of the types and applications of the product. It provides information about leading companies and their business overview, types, and leading applications of the product. Besides, it offers insights into the competitive landscape, SWOT analysis, and current key market trends and highlights key drivers and restraints. In addition to the aforementioned factors, the report encompasses several factors contributing to the market's growth in recent years.
Value (USD Billion)
By Type, Navigation Technology, Application, Industry, and Region
By Navigation Technology
Fortune Business Insights says that the market was valued at USD 2 billion in 2021.
The market is expected to be valued at USD 4.11 billion in 2029.
Growth of 9.6% CAGR is being observed during the forecast period (2022-2029).
The North America market size was at USD 0.56 billion in 2021.
Within the type segment, the others segment is expected to be the leading segment during the forecast period.
Rising automation solution in the material handling process is driving the current market scenario.
TOYOTA INDUSTRIES CORPORATION, Hyster-Yale Materials Handling, Inc., Daifuku Co., Ltd., and Oceaneering International Inc. are the top players in the market.
The major players in the market hold approximately 55% -60% of the market.
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