Germany’s robotics industry is facing increasing pressure from Chinese competitors, adding to its struggles with declining domestic orders and a sluggish economy. The VDMA engineering association highlighted these challenges in a recent statement to Reuters.
“Competition is fierce,” said Frank Konrad, head of VDMA’s robotics and automation department, on Monday. “Many Chinese suppliers have grown strongly in their home markets and are now pushing into Europe.”
Germany, renowned for its engineering prowess, is grappling with an economic downturn driven by high energy costs, rising interest rates, and under-investment caused by bureaucratic hurdles.
According to Konrad, foreign orders are crucial for the growth of Germany’s robotic and automation industry. While domestic orders plummeted by 15% in the first four months of this year, international orders surged by 21%.
Major players in the sector include the Chinese-controlled factory robot maker Kuka and Siemens AG’s industrial automation business.
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The VDMA has revised its annual sales forecast for the sector, now projecting a modest 2% growth to 16.5 billion euros ($17.7 billion) in sales for 2024, maintaining last year’s level. In contrast, the sector experienced a 13% sales increase in 2023, driven by a post-pandemic surge in orders.
This year’s sales have been bolstered by the strong order intake from the previous year, Konrad noted.
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Germany’s robotic industry, once a beacon of technological innovation, is now contending with mounting challenges from multiple fronts. The most significant pressure comes from the rapid rise of Chinese competitors. Many Chinese robotic suppliers, having firmly established themselves in their home markets, are now aggressively expanding into Europe, directly challenging German dominance.
Frank Konrad, head of the Germany’s robotics and automation department at the VDMA engineering association, described the competition as “fierce.” This competitive pressure is exacerbated by Germany’s current economic woes. High energy costs, increased interest rates, and a burdensome regulatory environment have contributed to a broader economic downturn. These factors have collectively stymied investment and innovation within the sector.
The impact of these economic challenges is reflected in the order statistics for the Germany’s robotics industry. Domestic orders have fallen by 15% in the first four months of the year, highlighting the weakening demand within Germany. Conversely, international orders have risen by 21%, underscoring the industry’s growing reliance on foreign markets for growth. This shift emphasizes the global nature of the Germany’s robotics market and the critical importance of maintaining competitive edge internationally.
Major industry players like the Chinese-controlled Kuka and Siemens AG’s industrial automation business are central to this dynamic landscape. These companies exemplify the cross-border nature of the industry and the interconnectedness of global supply chains and markets.
Despite these challenges, the VDMA remains cautiously optimistic, albeit with a tempered outlook. The association has halved its annual sales growth forecast for the sector to 2%, anticipating sales to reach 16.5 billion euros ($17.7 billion) in 2024, roughly maintaining last year’s levels. This projection stands in stark contrast to the 13% growth witnessed in 2023, driven by a post-pandemic surge in orders.
The Germany’s robotics industry, though under strain, continues to be supported by strong international demand. The resilience of this demand will be crucial in navigating the current economic headwinds and fierce competition from China.
