Omron 2010 Annual Report Download - page 28

IAB Sales Trends in the Greater China Region
070605 08 10
Forecast
09
(Millions of U.S. dollars)
(FY)
219
250
309
261
448
281
28
producing demand for compact cars and products that
appear relatively inexpensive. Local companies are
consequently becoming stronger and expanding their
production facilities. In addition, Chinese consumer
electronics makers, such as the Haier Group, are even
making bids to expand into overseas markets. Soaring
labor costs have become an issue in China recently,
but the flip-side of this trend is the potential that this
will lead Chinese manufacturers to introduce more
automation into their operations.
Meeting Specific Market Needs
The expanding production by manufacturers and the
growth of local companies are leading to rising demand
for control equipment, specifically programmable logic
controllers (PLCs), temperature controllers, sensors,
timers, and counters. In addition, the relays, switch-
es, and connectors are electronic components widely
used in industrial machinery, consumer electronics,
telecommunications equipment, and automobiles.
China’s unit production of automobiles surpassed
both Japan and the United States in 2009, making it
the world’s largest manufacturer of automobiles, and
this was accompanied by growing demand for power
window switches, keyless entry systems, and other
automotive electronic components.
In addition, Omron’s blood pressure monitors cur-
rently command an approximately 65% market share
in China, and the Omron brand is establishing a grow-
ing presence in the business-to-consumer (B to C)
arena. Further growth in demand for healthcare equip-
ment is expected along with the increasing urbanization
of China’s inland regions.
Moreover, global corporations are facing increasing
demands for “safety assurance of workers at produc-
tion sites” and “attention to the environmental burden.”
Omron is contributing to these issues by utilizing its
sensing and control technologies to provide control
equipment and solutions.
The Omron Group views the Greater China region
and other newly emerging countries as future growth
areas, and seeks to provide ever-improving products and
services with a specific focus on “safety and security,
health, and the environment” through its industrial
automation, electronic components, automotive elec-
tronic components, and healthcare businesses.
The Industrial Automation Business (IAB), the core
business segment of the Omron Group, suffered
from the global recession and sluggish demand
conditions in fiscal 2009. Yet the IAB posted an 8%
year-on-year rise in sales in China—the sole region
of sales growth for the year.
China is becoming increasingly important, not
only as one of the world’s manufacturing hubs
but also as a product development, production,
and sales center to meet the demand of the coun-
try’s massive consumer market. While corpora-
tions from around the world are increasing their
investments in China, local companies have been
growing as their technical capabilities improve.
Reflecting this trend, IAB’s customer base in
the region is rapidly broadening from leading
companies in Japan and other developed coun-
tries to include a growing number of local compa-
nies. The Chinese market makes up an expanding
presence in the IAB business, and China has
become essential to IAB’s growth.
This report looks at IAB operations, develop-
ment and production activities in the fast-growing
China region from the perspective of the industri-
al automation business.
Feature “Omron in China” China, Our Driving Force for Growth
IAB Development
in China