German robotics industry faces stiff competition from China, VDMA says

BERLIN (Reuters) - Growing competition from China is weighing on the outlook for Germany's robotic industry, which is already struggling with falling orders in a weak domestic economy, a representative of the VDMA engineering association told Reuters.

"Competition is fierce," Frank Konrad, head of VDMA's robotics and automation department, said in comments published on Monday. "Many Chinese suppliers have grown strongly in their home markets and are now pushing into Europe."

Germany, known for its engineering might that once pioneered many technologies, is now dealing with an economic downturn triggered by high energy costs and interest rates, as well as under-investment due to red tape.

Foreign orders are the main driver for the German robotic and automation industry's growth, Konrad said. Domestic orders fell 15% year on year in the first four months of this year, while those from abroad increased by 21%.

Major players in the sectors are Chinese-controlled factory robot maker Kuka and Siemens AG's industrial automation business.

The VMDA has halved its annual sales outlook for the sector, according to data seen by Reuters. It now expects 2% growth to 16.5 billion euros ($17.7 billion) in sales in 2024, roughly at last year's level.

In 2023, the sector saw sales grow by 13% on the back of a post-pandemic uptake in orders.

This year's sales so far are still supported by the strong order intake of the previous year, Konrad added.

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(Reporting by Klaus Lauer, Writing by Andrey Sychev, Editing by Rachel More and Ludwig Burger)