The fall and rise of the KUKA are tempestuous subjects for any technological researcher or in the management school. One of the strong pioneers and a remarkable name in the robotic industry in Germany saw a major downfall and crashing in the stock exchange market. Finally, turn the table downside up with the help of a Chinese company, Midea, six years ago.
The key takeover of the Ausburg-based company was not appreciated but had to face heavy criticism due to uncertainty of its employee’s position, skepticism about the Chinese owner’s influence, and the fear of Midea taking over the German subsidiary off the stock exchange.
One cannot judge the fears or the critics’ opinions as it is a tough battle and anything is expected in the unexpected world of competitors. However, Peter Mohnen, CEO of KUKA AG, made sure that operationally nothing will be changed in KUKA. Midea promised no change in terms of governance and still, independent representatives are present on the Supervisory board.
In 2021, across the world, around 487,000 robots were delivered. By 2025, around 800 million euros to be invested in R&D in three quarters. The new operating system is built entirely in Germany and hence ensuring the core business of the German company remains at its core.
The main goal of the partnership with Midea is the reason for KUKA to make a solid position in China as it has become one of the most important technology markets in the world.
In China, around 590 million euros of KUKA robots were sold, way lesser than the promised sales of One billion. The companies in China are also fearing about cluster risk and also Midea plant managers are reluctant for using expensive KUKA robots.
“Last year Midea helped us to get a boost in China for the first time,” explains Peter Mohnen, CEO of KUKA AG.
The company is also focusing on solving special needs in China, such as customers in the electronics industry who are new to automation to use small robots, Delta. KUKA robots are also extensively used by Midea in household appliance factories.
In my opinion, the strategy for KUKA is appreciative of a new market that is language bound. It provides the needed time to observe the market with a trusted partner. Even though Germany is known for being hostile to foreign products and more acceptable to its local products.
It is one of the kinds of partnership (or accurately acquisition) with people from different mentalities, languages, and cultures and also the way business is conducted. Well, for 6 years, it’s proved to be beneficial to both sides. Now can it be the foundation for other companies to collaborate on special needs or applications?