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The automated guided vehicle (AGV) market is estimated to grow from $2.0 billion in 2019 to $2.9 billion by 2024 at a CAGR of 7.8%.
The key factors driving the growth of the market include growing demand for automation in material handling across industries, the rising popularity of e-commerce, improved safety standards at workplaces, and shift in demand from mass production to mass customization. However, high installation, maintenance, and switching costs; and increasing use of mobile robots in retail and e-commerce industries are the key restraining factors for market growth.
Other types of AGVs - hybrid AGVs and customized AGVs - are witnessing high adoption rates. Manufacturers are designing hybrid and customized AGVs to cater to the varying material-handling requirements of different industries. The selection of the most suitable type of AGVs varies according to the requirements of industries. Customized and hybrid AGVs are being manufactured to cater to the varied needs of end-users, which is likely to contribute to the high growth of the market for this segment during the forecast period.
The projected high growth of vision-guided AGV market can be attributed to ease of technology as the users don't need to modify the existing infrastructure for installing these AGVs in an industrial facility. Static barriers or infrastructure modifications, such as magnets or reflectors, do not hinder the navigation of these AGVs through warehouses or industrial facilities. The technology rather enables them to build a three-dimensional map through a series of images taken when an operator tours the vehicle through the warehouse. Once the maps are created, AGVs are ready to work around the facility.
Distribution is a key element in various operations such as order fulfillment, cross-dock facility, bulk break, and package handling. The growing e-commerce industry is causing a significant increase in the number of warehouses, thereby creating huge demands for AGVs in distribution centers. The rise in adoption of AGVs in the distribution application is attributed to their ability to handle materials carefully with negligible damage.
Europe is expected to lead the AGV market, in terms of size, from 2019 to 2024. The presence of a large number of key players in this region, along with a large customer base, is among the major factors driving the market in Europe. The region has an exceptionally high labor cost; therefore, manufacturers in European countries have been adopting automated solutions to reduce overall operational cost. Implementing these solutions helps manufacturers maintain a competitive edge by facilitating efficient management of overall warehousing operations.
Also, several automotive players have their manufacturing facilities in European countries, and this industry is a major market for AGVs. Furthermore, the presence of large companies with global warehousing and distribution operations sustained the growth of the e-commerce industry, and developed third-party logistic (3PL) networks are driving the growth of the AGV market in Europe.