German Robotics Struggle as Chinese Competition Heats Up

Ever wonder who builds all those cool robots? Germany’s been a frontrunner, but China’s catching up fast, meaning the future of robots might get a whole lot more competitive, with both countries vying to create the next big thing

Germany’s robotic industry, which is already grappling with declining orders in a feeble domestic economy, is being further impacted by the increasing competition from China, according to a representative of the VDMA engineering association who spoke to Reuters.

Frank Konrad, the director of VDMA’s robotics and automation department, stated in comments published on Monday that competition is intense. “Many Chinese suppliers have grown strongly in their home markets and are now pushing into Europe.”

Germany, which was once renowned for its engineering prowess and was the origin of numerous technologies, is currently experiencing an economic decline precipitated by high energy costs, interest rates, and underinvestment due to red tape.

Konrad asserted that foreign orders principally drive the German robotic and automation industry’s expansion. In the first four months of this year, domestic orders experienced a 15% year-over-year decline, while those from abroad increased by 21%.

Kuka, a factory robot manufacturer under Chinese control, and Siemens AG’s industrial automation division are the two most significant sector players.

According to data obtained by Reuters, the VMDA has reduced its annual sales forecast for the sector by half. It anticipates a 2% increase in sales to 16.5 billion euros ($17.7 billion) in 2024, about the same as the previous year’s level.

The sector experienced a 13% increase in sales in 2023 due to a post-pandemic surge in orders.

Konrad further stated that the robust order intake from the previous year continues to underpin the sales thus far this year.