Why KUKA's CEO Thinks European Markets are Behind on AI

European industrial companies have been too slow to adopt AI compared to their counterparts in China and the US, according to KUKA's CEO Christoph Schell in an interview with Bloomberg.

This sluggish uptake could mean European manufacturers are falling behind in a race that McKinsey has argued represents a US$1tn opportunity for AI in industrial sectors.

KUKA, a German-Chinese leader in industrial robots and autonomous mobile robots, is now prioritising investments in the US and Asia, citing Europe's lagging AI adoption as a key driver of this strategic shift.

The company's repositioning highlights broader concerns about European competitiveness in an increasingly AI-driven industrial landscape.

Europe's reluctance to embrace transformation

Speaking to Bloomberg, Christoph argued that many of Europe's industrial companies are moving too slowly on AI adoption, putting faster-moving global rivals in a position to overtake them.

Christoph told Bloomberg that the burden of legacy systems and a reluctance to change mean many factories remain disconnected and make poor use of their data.

This challenge could be particularly acute in Germany, where a strong engineering-led mindset favours incremental improvements over transformational shifts.

The result is a business environment where companies may be underestimating the permanence of current market changes.

"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," Christoph tells said.

KUKA is a world leader in supplying automotive companies with production systems, with clients including Mercedes-Benz and Volkswagen. However, the competitive landscape is shifting rapidly.

"The problem is that a lot of the competition products, they're not just cheaper, they're better," Christoph explains.

Christoph also highlighted the intense pressure on margins as European companies compete for a shrinking pool of opportunities.

"The problem in Europe is there are so many companies that are fighting right now for fewer opportunities," Christoph told Bloomberg. "It's almost like who is more desperate today? Who is willing to lose 20%, 30% gross margin?"

Strategic pivot to growth markets and competitive reality

As a result of these European challenges, KUKA is prioritising investments in the US and Asia, where market conditions could be more conducive to growth.

Christoph argued that America is more attractive for spending because of import tariffs driving domestic manufacturing, whilst China, India and Southeast Asia are fuelled by technology adaptation and infrastructure build-out.

This strategic pivot reflects KUKA's evolution since its acquisition by Midea, a Chinese listed appliance company, in 2016. Though the company remains headquartered in Augsburg, Germany, it is now more globally orientated than ever before.

According to the company, 2025 revenue is evenly split, at around one third each, across EMEA, the Americas and Asia-Pacific.

The data surrounding robotics adoption paints a stark picture of Europe's position. China is the world's largest robotics market, accounting for more than 50% of global demand.

KUKA is ranked among the top robotics companies operating in China, and for the first time in the company's history, revenue from its China business has exceeded the €1bn (US$1.168bn) threshold.

According to the International Federation of Robotics's (IFR) World Robotics 2025 report, 295,000 industrial robots have been installed in China - the highest annual total on record.

By contrast, IFR data shows industrial robot installations in Europe fell 8% to 85,000 units in 2024.

The decline could be particularly concerning in Europe's major economies. In Germany, the largest robot market in Europe, installations fell 5% to 26,982 units in 2024.

The IFR data from 2024 also showed Italy's installations fell 16% and France was down 24%. In the UK, industrial robot installations were down 35% to 2,500 units in 2024.

McKinsey has argued that AI is expected to herald a new age of efficiency in operations. In manufacturing and supply chain alone, the consultancy says AI could reduce expenses by up to half a trillion dollars.

For European manufacturers, the question may no longer be whether to embrace AI-driven automation, but whether they can afford to delay any longer whilst competitors in other regions advance their capabilities and capture market share.