Investments drive the market

Why mechanical engineering in Romania is interesting for German companies

Romanian mechanical engineering continues to gain importance for German companies as a sales, production, and procurement market. The traditionally close economic relations coincide with a high need for modernization in numerous industrial sectors. Opportunities arise in particular in automation, production lines, digitalization, as well as in service, repair, retrofit, and engineering services.

“The business opportunities for German mechanical engineering companies in Romania continue to be very good - both in sales and in the area of sourcing and nearshoring,” emphasizes Sebastian Metz, Executive Board Member of the German-Romanian Chamber of Industry and Commerce. “Romania has a broad industrial base, a strong tradition of engineers and technicians, as well as a strategic location between the EU, the Black Sea region, and the Western Balkans. At the same time, there is a high need for modernization in many industrial sectors, especially in automation, production lines, service, repair, and digitalization. This creates supply opportunities for German providers of machines, components, automation solutions, maintenance, retrofit, and engineering services,” the head of AHK Romania further reports.

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The industrial base is broadly diversified. “There is already a relevant industrial environment on site of around 12,300 companies in metal processing and construction as well as about 1,800 companies in mechanical engineering. In addition, Romania continues to be heavily dependent on machinery imports: Around a quarter of all machinery imports come from Germany. This underscores the strong market position of German suppliers and the trust in German technologies. The strengths of Romanian mechanical engineering lie above all in the combination of industrial experience, complexity of the offering, technical expertise, competitive costs and good integration into European supply chains,” Sebastian Metz continues.

The VDMA also points to the industry's long-standing connections. “The relations of German mechanical engineers with Romania are traditionally close,” adds Yvonne Heidler, Consultant Western Europe/EU at the VDMA. “Many of our members are represented in Romania with branches - often for many years already - both in the area around Bucharest and in the west of the country, especially in Transylvania. The country is also becoming increasingly important on the topic of "nearshoring",“ the VDMA expert further reports.

How is Romania's economy developing?

In addition to the industrial structure, the overall economic development also plays an important role. According to the assessment of Germany Trade & Invest, Romania is one of the growth markets within the European Union.

“Romania's economy is one of the growth markets in the EU and will continue to develop dynamically in the long term,” also emphasizes Dominik Vorhölter, correspondent of Germany Trade & Invest for Romania, Bulgaria and the Republic of Moldova. “Romania's real GDP growth over the past five years was on average 2.8% per year, almost three times higher than the average annual real GDP growth in Germany during this period. Although Romanian economic output is currently losing momentum, the EU Commission is again expecting real growth of 2.3% in 2027,” the GTAI expert further reports.

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In the short term, however, there are burdensome factors. “Private consumption, structurally the largest driver of the Romanian economy, is likely to contribute hardly at all to growth in 2026, but recover in the medium term,” Vorhölter continues. “Inflation of 7%, driven by high energy prices, and real wages that have recently stagnated are currently slowing demand. In addition, high interest costs are a burden. The negative foreign trade balance, the high state deficit and the high capital outflows abroad also cause problems.”

GTAI expects impetus for medium-term growth from the expansion of road infrastructure, the defense industry, the food industry, and the energy sector.

EU funding programs drive modernization

An important factor for investments in Romanian industry is state funding and programs of the European Union. Among other things, they are intended to enable investments in energy efficiency, automation, digitalization, and modern production technology.

“State and EU support and financing programs in particular play an extremely important role for the modernization of Romanian industry,” emphasizes Sebastian Metz, the CEO of AHK Romania. “The most important instruments include the recovery fund with around 30 billion euros, the modernization fund, the innovation fund, as well as the EU program SAFE.
The EU funds sustainably support investments in energy efficiency, digitalization, automation, modern production facilities, and new technologies and improve the competitiveness of local suppliers, which makes Romania more attractive as a nearshoring location.”

VDMA also sees this as an important impetus for investments. “That the Romanian mechanical engineering sector is placing great hopes on the EU is quite understandable, because Bucharest can draw down up to 13.5 billion euros in grants in Brussels this year, above all for roads, railways, power grids, hospitals, and digitalization”; adds VDMA expert Heidler. “That should stimulate business with equipment in construction, energy, environmental, and automation technology.”

According to the VDMA, growth opportunities are also emerging in the defense and aerospace industry, food processing, as well as in packaging and conveying technology.

Which technologies are in demand in Romania's mechanical engineering sector?

A specific field of investment is production technology. “As we hear from the Romanian mechanical engineering association, CNC machines are currently in particularly high demand,” Yvonne Heidler continues. “Investment orders are also likely to come through nearshoring as well as wind power and rail transport projects, provided that tenders and approvals make better progress. Other than that, the biggest challenges for Romanian mechanical engineers include the often outdated machinery, increased energy and labor costs, high inflation, and the high tax burden.”

Private investments also carry great weight for Romanian mechanical engineering. Nearly one third of foreign direct investment goes to manufacturing. In 2024, according to the GTAI, the stock of foreign direct investment by German companies in Romania amounted to EUR 18.7 billion. According to the Romanian central bank, the largest part of this flowed into equipment and the construction of new production facilities.

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High export ratio shapes Romania's mechanical engineering industry

The Romanian mechanical engineering sector is strongly export-oriented. According to GTAI, its export ratio is around 80%. Exports include, among other things, electronic components for machines, batteries, ball bearings, household appliances and CNC machines. The most important competitors of Romanian companies include suppliers from Italy and China.

At the same time, the sector has an important function as a supplier for other branches of industry. “Romanian mechanical engineers, on the other hand, play an important role as suppliers of components and assemblies for the country's key industries, the automotive and electrical industries, metal processing, the rubber and plastics industry and the defense industry,” Dominik Vorhölter further reports. “Romania's mechanical engineering industry is also an important sourcing market for German companies. According to UN Comtrade data, in 2025 Germany sourced machinery and equipment worth approximately 2 billion euros from Romania.”

The flow of goods is significant in both directions. “In the opposite direction, according to data from the Federal Statistical Office and the VDMA, Germany reached a share of 24.4% in 2025 with deliveries of 2.6 billion euros of the total Romanian machinery imports of 10.7 billion euros,” adds Yvonne Heidler from the VDMA. “This was followed by the increasingly strong Chinese competition with a supply share now of 13.5% and mechanical engineering companies from Italy (12.5%). In the ranking of machinery exports from Germany, Romania ranks 25th; in German machinery imports, it ranks 16th,” the VDMA expert continues.

According to VDMA data, drive technology was in particularly high demand in 2025 among German machinery deliveries to Romania, with a share of 14.3%. This was followed by agricultural machinery with 10.9%, conveying technology with 6.0%, and general air technology with 5.2%.

Why German companies are strongly represented locally

For German mechanical engineering companies and industrial groups, Romania is both a production location and a sales market for industrial technology. As the German-Romanian Chamber of Industry and Commerce reports, Germany is the largest foreign investor in the country, with around 8,500 active companies and 220,000 direct jobs.

Around 45% of investments accordingly go to manufacturing industry. This is followed by trade with 21.5% and research and development with 10.5%. Since 2007, Germany has also been Romania's most important trading partner.

Many German machinery manufacturers operate their own sales or production subsidiaries. The companies come from classical mechanical engineering as well as from areas such as automation, drive technology, industrial equipment, and automotive. Schaeffler, Bosch Rexroth, Kuka, Dräxlmaier, and Diehl are named as significant German investors in the Romanian mechanical engineering environment.

The Kärcher Group also announced in August of this year an expansion of its commitment in Romania. With investments of 115 million EUR, a Global Business Services Center is to be opened in Timișoara, which supports the group's international business processes. Kärcher is already represented with a sales company and three production sites in Curtea de Argeș and employs around 1,000 employees there. Further investments in Argeș are planned.

“In the past three years, German manufacturers of electric motors, components, and household appliances have also opened new production facilities in Romania or expanded existing ones,” adds Dominik Vorhölter. “They form a strong cluster. This includes companies such as Zollner, Stiehl, emz-Hanauer, or ebm-Papst. The German machine tool builders Trumpf, DMG Mori, and Homag serve Romania as a sales market.

The German-Romanian joint ventures in the defense industry include Rheinmetall Automecanica, Rheinmetall Pirochim, and Airbus Helicopters Romania, a cooperation between Airbus and the Romanian aviation company IAR S.A. Brasov,” the GTAI expert continues.

Some medium-sized companies have also, in some cases, already been present locally for decades. ifm electronic opened a “Green Factory” in Sibiu in 2023 on an area of 13,000 sq m, which was certified with the gold medal of the German Sustainable Building Council. The family-owned company develops, produces and markets sensors, controls, software and systems for industrial automation.

The site in Transylvania was expanded with a new factory including headquarters for sales. In 2025, ifm electronic already celebrated 20 years of presence on the Romanian market.

In Sibiu, Gühring KG from Albstadt is also represented with a plant. The family-run Wittenstein Group from Igersheim has also been present since 2008 with a plant in Șura Mica in the Sibiu region. As a university city, Sibiu is one of the drivers of innovation and technology in the region.

German companies operate their own tech centers there, often in cooperation with local universities, for the development of software and service processes. In doing so, they use the qualifications of Romanian skilled workers and contribute to positioning the country as an IT and outsourcing location in Europe.

What matters when entering mechanical engineering in Romania

For new market participants, AHK Romania recommends a long-term-oriented approach. “Newcomers should not view Romania only as a cost-effective location, but as a market with regional differences, industrial competencies and long-term development potential,” advises Sebastian Metz.

AHK in Bucharest sees favorable prospects, among other things, in the Romanian steel and light metal construction sector, the largest sector within the metal segment. For companies looking for suppliers for metal components, structural parts, assemblies or industrial manufacturing services, Romania can therefore be of interest as a sourcing market.

Requirements should be clearly defined, potential partners carefully reviewed, and sufficient time planned for building trust and resilient business relationships. AHK Romania supports companies, among other things, in finding business partners, market analyses, location consulting, and personnel recruitment.

“In our experience, German-Romanian cooperations are particularly successful when they are not only geared toward short-term cost advantages, but toward long-term partnerships, quality assurance, and joint process development,” concludes the CEO of AHK Romania.