Forsa Study: One in four manufacturing companies considers itself at a competitive disadvantage compared to Chinese suppliers / 28 percent have already lost contracts to them / There are no signs of a widespread withdrawal from business in China

• The results can be considered representative of companies in the automotive, mechanical and plant engineering, and energy-intensive industries (chemicals, paper, ceramics, and metals) with annual revenues of 10 million euros or more
• In the machinery and plant engineering sector, 77 percent consider themselves superior to Chinese suppliers; at the same time, 38 percent in that sector have lost orders to Chinese suppliers—the highest figure among all three sectors
• 21 percent of respondents have established partnerships with Chinese companies, and 9 percent have opened up their own production capacities to Chinese partners

The majority of companies (52 percent) consider themselves superior to Chinese suppliers in the European market, while 25 percent consider themselves inferior (17 percent slightly, 8 percent significantly). In energy-intensive industries, the perception of inferiority predominates: 39 percent consider themselves inferior, while 34 percent consider themselves superior. By contrast, the mechanical and plant engineering sector (77 percent to 4 percent) and the automotive industry (72 percent to 13 percent) view themselves as clearly superior.

When it comes to the consequences, a different picture emerges. Since the beginning of 2025, 28 percent of companies have lost orders or bids to Chinese suppliers; in mechanical and plant engineering, the figure is 38 percent—by far the highest in any sector. Thirteen percent have lost existing customers to Chinese suppliers; here, too, the machinery and plant engineering sector is the hardest hit (22 percent; energy-intensive industries: 9 percent; automotive industry: 5 percent). Automotive companies have largely been spared so far: about four out of five (79 percent) report no consequences whatsoever, while 16 percent have lost orders. Among larger companies with annual revenue of 100 million euros or more, the percentages are higher: 34 percent have lost orders, and 26 percent have lost existing customers. Fifteen percent of all companies have permanently lowered their prices in response; in the energy-intensive industry, one in five (21 percent) has done so.

“No company readily admits to being at a competitive disadvantage, not even in an anonymous survey. The fact that a significant portion of the industry does so anyway is remarkable,” says Ralf Winzer, Senior Managing Director at FTI-Andersch, the consulting unit of FTI Consulting specializing in restructuring, business transformation, and transactions. “It is striking that the sector that perceives itself as being in the strongest position is the one that loses orders most frequently. A competitive position deemed superior does not automatically protect a company from losing customers and orders.”

“In a cross-sector comparison, automotive companies have so far reported fewer instances of orders or existing customers being lost directly to Chinese suppliers,” says Ralf Winzer. “However, this does not mean that the supplier industry is less affected by Chinese competition. The pressure is currently coming primarily from declining volumes at established European manufacturers, Chinese component imports, and the shift of value creation toward future technologies. In many cases, Chinese OEMs initially relied on existing Chinese supply networks when entering the European market.”

Response: Differentiation through Origin and Quality; One in Five Companies Collaborates with Chinese Partners

In response to the increasing activity of Chinese companies in Europe, companies have so far relied primarily on differentiation: 60 percent have used “Production in Europe” as a seal of quality since early 2025, while 47 percent have placed greater emphasis on quality or system expertise. By contrast, only one in five companies (21 percent) has reduced its own product or process costs. At the same time, 21 percent have also established partnerships with Chinese companies, and 9 percent have opened up their own production capacities to Chinese partners. The machinery and plant engineering sector (30 percent of partnerships)—the industry with the highest order losses—cooperates most frequently.

“The two most common responses to Chinese competition so far have been to use European origin as a seal of quality and to emphasize quality or system expertise. Currently, only one in five companies is working on reducing its own costs or streamlining its processes,” says Ralf Winzer. “With rising price pressure, this is likely to put a strain on profit margins. That is why financiers are also paying closer attention to this.”

The fact that the machinery and plant engineering sector reports both the highest losses in orders and the largest share of partnerships with Chinese companies is not necessarily contradictory. “The survey does not indicate whether these are the same companies in each case or whether competitive pressure triggered the cooperation,” says Ralf Winzer. “However, based on our experience with clients, we see that companies under high competitive pressure are increasingly considering partnerships as a strategic option—for example, to improve access to markets, technology, or to reduce costs.”

No Signs of a Withdrawal from China

Even though “de-risking” has been a frequent topic of public discussion recently, there are no signs of a significant withdrawal from their own business operations in China. Forty-eight percent of companies have conducted business in or with China over the past three years—62 percent in the machinery and plant engineering sector and 25 percent in the automotive industry. For 36 percent of these companies, the Chinese market has actually gained in importance over the past three years, while for 22 percent it has lost importance. In energy-intensive industries, the market has gained importance for 43 percent of companies active in China, and in the machinery and plant engineering sector for 31 percent (loss: 21 percent in each case).

The specific measures taken by companies in China over the past three years paint the same picture. Where companies have taken action, they are moving closer to the market: 20 percent of all companies have organized development, procurement, and production more extensively in China (“local for local”), and 12 percent have increased their investments in China. The machinery and plant engineering sector has gone the farthest in this regard (“local for local”: 26 percent; focus on profitable segments: 27 percent; products specifically for the Chinese market: 25 percent). By contrast, only 4 percent have deliberately decoupled their business from the global supply chain, and 4 percent have also scaled back their activities in China.

Larger companies with annual revenue of 100 million euros or more are the most committed to China: 58 percent do business there, and they are expanding their operations there the most: 31 percent have established or expanded partnerships with Chinese companies; 28 percent have organized development, procurement, and production more heavily in China; 23 percent have developed products specifically for the Chinese market; and 18 percent have increased their investments in China. At the same time, they are the most likely to report losing orders and customers to Chinese competitors.

“Many companies are diversifying their supply chains and adopting a more regional approach to reduce one-sided dependencies in procurement,” says Ralf Winzer. “On the sales side, there has been no fundamental withdrawal from China so far. Companies are thus pursuing a differentiated approach: they are increasing the resilience of their supply chains without foregoing the opportunities offered by the Chinese market. This makes good business sense, as China remains of great importance to many companies both as a sales market and as part of their value-added and procurement structures.”

Ralf Winzer says: “At the same time, competition with Chinese suppliers is intensifying—both in China and in Europe. It will therefore be crucial to consistently align business operations with profitability and strategic relevance, limit dependencies, and strengthen one’s own competitiveness. Individual German companies can maintain their leading position. For the industry as a whole, however, more intense competition is to be expected.”

About the German Economic Pulse 2026

For the German Economic Pulse 2026, the polling institute Forsa, commissioned by the management consulting firm FTI-Andersch, conducted a telephone survey in the summer of 2026 of a total of 151 executives at German industrial companies: 37 companies from the automotive industry, 51 machinery and plant manufacturers, and 63 companies in the chemical, paper, ceramics, and metal (energy-intensive industries).

The results can be considered representative of companies in the automotive, machinery and plant engineering, and energy-intensive industries (chemicals, paper, ceramics, and metals) with annual revenue of 10 million euros or more. This press release defines “larger companies” as those with annual revenue of 100 million euros or more.

About FTI-Andersch

FTI-Andersch is a management consulting firm that supports its clients in developing and implementing sustainable strategies for the future, performance improvement, and restructuring. FTI-Andersch actively supports companies that must address strategic, operational, or financial challenges and change processes—or that wish to proactively align their business models, organizations, and processes for the future. Its clients include, in particular, medium-sized companies and corporate groups that operate internationally. FTI-Andersch is part of the FTI Consulting Group (NYSE: FCN), which has more than 8,100 employees worldwide.

www.fti-andersch.com