Unhappy with Europe's AI adoption speed, robotics maker Kuka to focus on Asia and US; says: In Germany, a lot of companies still believe this is …

European robotics maker Kuka is reportedly shifting its focus toward Asia and the US. This shift comes as the company, which is one of the largest industrial robot makers, is unhappy with the pace of artificial intelligence (AI) adoption in Europe. The company said many industrial companies in the region are slow to modernise, relying on legacy systems and gradual upgrades, which could affect their ability to compete with global peers. In an interview with Bloomberg, Kuka CEO Christoph Schell said that this trend is particularly visible in Germany. Referring to the widening gap in digitisation and automation, Schell said, “In Germany, a lot of companies still believe this is just a temporary thing, we’re going to come back out of this, in particular in automotive. The problem is that many competing products are not only cheaper but also better.

Kuka CEO Christoph Schell: ‘The problem in Europe is…’

“The problem in Europe is there are so many companies that are fighting right now for fewer opportunities. It’s almost like who is more desperate today? Who is willing to lose 20%, 30% gross margin?” Schell told Bloomberg.Kuka, which counts European automakers such as BMW AG and Stellantis NV among its key customers, is operating in a region where demand has remained subdued since the pandemic. The company is now exploring investment opportunities in other markets, the German-born executive said.Schell noted that the US is attracting more investment due to import tariffs that are encouraging domestic manufacturing. He added that markets such as China, India and Southeast Asia are seeing growth driven by technology adoption and infrastructure development.Kuka, which was acquired by China’s Midea Group Co in 2016, also provides industrial robots to companies including Volkswagen AG and Airbus SE for production line operations.The acquisition of the Augsburg-based company, which earns approximately €3.9 billion ($4.5 billion) in annual revenue, sparked discussions in Germany about the influx of foreign investment into key industries. After the acquisition, the German government increased its scrutiny of technology-related acquisitions, including those related to robotics.Starting out as a manufacturer of mechanical devices, Kuka has ventured into software engineering and artificial intelligence development while continuing to manufacture industrial robots used in factories. Some of its rivals are ABB Robotics and Japanese Yaskawa Electric Corporation. The company recently introduced a platform aimed at linking “hardware-defined, software-defined, and AI-defined” manufacturing, Schell added.Germany’s economy has also been dealing with a prolonged period of weak growth, the report added. While recent public spending plans on defence and infrastructure showed early signs of improvement, the situation has been affected by the recent Middle East conflict. Export-oriented industries such as automotive, machinery, and chemicals, including BASF SE, continue to face challenges from high energy and labour costs.