The state of mechanical engineering in France

The International Monetary Fund (IMF) is not very optimistic about the growth forecasts for our western neighbor in its latest 'World Economic Outlook' from October 2025. Although the gross domestic product in France is expected to increase slightly in real terms by 0.7 and 0.9 percent in the current year and 2026, respectively, after a real 1.1 percent increase in 2024, the forecast for 2026 was lowered by 0.1 percent compared to the last prediction.

"These growth forecasts, which at first glance appear more positive compared to Germany, should not be overestimated," cautions Dr. Frauke Schmitz-Bauerdick, correspondent for Germany Trade & Invest in France. "The most important driver of French growth is the service sector, with tourism as the leading force, as well as public and health services." The aerospace, defense sector, and pharmaceutical industry are also doing well. "The situation, however, is difficult - as in Germany - especially in the automotive and automotive supplier industry, the chemical industry, construction, and plastics manufacturing," adds the GTAI expert. "And for political reasons, the (renewable) energy sector is now developing particularly poorly."

Domestic political crisis and national debt paralyze the economy

"The ongoing domestic political crisis combined with the massive national debt of the country paralyzes the manufacturing economy and consumption. Industrial companies are holding back on investments in light of a difficult domestic and geopolitical environment," states Dr. Schmitz-Bauerdick further. "According to forecasts by the Banque de France, corporate investment will decline by another 0.6 percent in 2025 after a drop of minus 1.6 percent in 2024. It is only in 2026 that the Banque de France expects a slight increase in corporate investment of 1.2 percent," continues the GTAI correspondent.

Despite these turbulences, Germany remains France's most important trading partner, while France remains Germany's second-largest export market with an export volume of 116 billion euros in 2024, emphasizes the German-French Chamber of Industry and Commerce, which will celebrate its 70th anniversary with its 950 member companies in 2025. With more than 3,000 companies based locally, Germany maintains its position as France's second most important investment partner. And German investments contributed to the creation of more than 4,400 new jobs in 2024, according to the AHK France.

France is export market no. 1 in Europe for German mechanical engineering

"Even for the export-driven German mechanical and plant engineering sector, France remains the third most important sales market worldwide and the most important export market in Europe," reports Yvonne Heidler, Western Europe/EU consultant at VDMA. "In the first half of 2025, German mechanical engineers delivered plants worth 6.5 billion euros to France."

According to data from the Federal Statistical Office and VDMA, this represented a decline of 9.5 percent compared to the previous year. Even in the full year 2024, the record export value of 2023 (14.9 billion euros) was clearly missed with machinery and plant exports of 13.4 billion euros. Nevertheless, Germany remains by far the most important supplier country for machinery and plants for France, with a share of 27 percent.

"The German machinery deliveries across the Rhine mainly come from the sectors of agricultural technology, conveyor technology, general air technology, drive technology, fittings, construction machinery, and building material plants," the VDMA expert continues. "In the opposite direction, the trade volume is also significant. Because in terms of machinery imports from Germany to France, the country ranks 7th with a volume of just under 5 billion euros in 2024."

Industry and economic situation: This is how the French mechanical engineering sector is structured

Traditionally, the French mechanical engineering sector is strongly represented in aerospace, defense industry, energy production (especially nuclear power), automotive industry, as well as in the fields of robotics, manufacturing technology, automation solutions, and agricultural machinery.

Significant players here include well-known names such as the Airbus Group (aerospace, but also production of turbines, structural components), Valeo (automotive technology, drive systems, electronics), Dassault Systèmes (software for mechanical engineering and product development), Safran (aerospace and defense industry, turbines, drives), the Renault Group (automobile manufacturing, mechanical engineering supplies), PSA Group/Stellantis (automobile manufacturing, drive technology, systems), Alstom (railway and transport solutions), Schneider Electric (energy management, automation technology), Saint-Gobain (materials and construction, mechanical engineering components, processing solutions), Vallourec (pipe and steel products for mechanical engineering), Fives Group France (engineering for various industrial sectors, precision machinery), Leroux & Lotz (renewable energies), TechnipFMC (project and mechanical engineering solutions in the oil and gas sector), Manitou (handling solutions, lifting and earthmoving machines), Legrand (electrical and digital infrastructures, automation solutions for buildings and industry).

"95 percent of French mechanical engineering companies are SMEs that manufacture specialized solutions for the overall French industry, particularly for the aerospace industry as well as the agriculture and food processing industries," adds Schmitz-Bauerdick.

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"Currently, the French mechanical engineering sector is under significant pressure," the expert continues. The revenues of the overall mechanical engineering industry fell by 2.3 percent in 2024 compared to the previous year to 155.6 billion euros, according to the umbrella association Fédération des industries mécaniques (FIM). The subsegment 'Équipement de production et équipements mécaniques' (comparable to the German mechanical engineering segment) generated around 76.1 billion euros in 2024.

"Above all, French machine tool manufacturers are currently suffering from the ongoing weakness of important customer industries such as the automotive and supplier industries, the chemical, plastics, and paper industries, construction machinery manufacturers under the weak construction economy," emphasizes Schmitz-Bauerdick further. "The US tariff war and the rising Chinese competition in robotics and production equipment are putting additional pressure on the sector."

Hope for the defense sector, the German infrastructure fund, and large projects

According to expert opinions, impulses are expected thanks to France's traditionally strong defense industry, which is increasingly moving towards mass production of military consumables (ammunition, projectiles, drones). Companies from outside the industry, especially from the struggling automotive supplier industry, are turning to the defense sector and need to adapt their facilities. A French car manufacturer (presumably Renault, but - according to GTAI - not yet officially confirmed) is said to be setting up drone production in Ukraine.

"The adoption of the German infrastructure fund also lifts the mood in French mechanical engineering. French construction companies active in Germany hope for new orders from the special fund. And construction machinery manufacturers expect increasing demand for equipment and construction machinery," continues the GTAI expert.

Large projects by French and international investors are repeatedly announced. For example, the Franco-German joint venture H3 Marseille Fos, a collaboration between the German company Hy2gen and the French company H2V, intends to invest 1.5 billion euros in building a facility for the production of synthetic fuels in Marseille-Fos sur Mer.

And in February 2025, French, but especially foreign companies announced investments of 109 billion euros in the construction of data centers and the AI value chain. To make these centers environmentally friendly and resource-efficient, technological solutions are needed to increase water and energy efficiency, recycling, or waste heat utilization. In particular, manufacturers of pumps and valves, heating and cooling technology, and water treatment systems are expected - according to the assessment of VDMA and GTAI - to benefit from this. In general, production companies are increasingly relying on artificial intelligence. This makes AI compatibility of machines a prerequisite for sales.

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Indirectly, the French mechanical engineering sector also benefits from European-supported programs such as the French innovation program 'France 2030'. This focuses on promoting deep tech companies in particular in developing innovative solutions in areas such as mobility, decarbonization of industry, as well as new space and deep-sea mining. Future fields such as AI, robotics, new materials, and medical technology are also being specifically promoted.

A well-educated, industry-focused start-up support particularly assists young companies in the sector. Additionally, the machinery industry benefits - usually indirectly - from European-supported IPCEI projects, such as in the hydrogen sector, according to GTAI and VDMA.

Moreover, France, like Germany, is trying to attract ambitious, sustainable large-scale projects in future industries to the country with financial support. For example, the state is supporting the semiconductor plant of STMicroelectronics with 2.9 billion euros, the Taiwanese battery production of ProLogium with 1.5 billion euros, and the gigabattery project of the French start-up Verkor with nearly 660 million euros.

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Strong German presence: These companies are strong in France

All well-known German machinery manufacturers have generally been present in France for many years or even decades, often with their own production facilities. For instance, Claas, with plants in Clermont-Ferrand and Le Mans, is among the leading agricultural machinery manufacturers in the country. The pump manufacturers KSB and WILO are also strongly represented in the country. KSB primarily produces in France for export, with 80 percent of production going abroad. Bosch is also very active on-site. The demand for process optimization and resource-efficient production continues to offer good participation opportunities for German companies, according to GTAI.

Many industry giants are closely intertwined and cooperate (despite the naturally existing and intense competition) in areas such as research and development and start-up support, especially within the framework of EU projects. For example, the corporate investment fund Bosch Ventures invests in the French photonics start-up Scintil Photonics.

As a French-German large-scale project with German mechanical engineering elements, Airbus is certainly well-known. Although it is not a typical joint venture, there are intensive cooperation structures in turbines, structural components, and manufacturing processes between French and German locations.

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There is also intensive Franco-German collaboration in mechanical engineering or in the closer environment of industrial automation and manufacturing between Siemens and Renault/Nissan, which pursue joint projects in the field of industrial automation, production processes, and digital factories in various production lines (often in the context of Industry 4.0 initiatives) or Siemens France and Peugeot Citroën (PSA Group), which cooperate in the field of automation, drive technology, and production optimization in French plants.

Bosch Rexroth and French OEMs are also jointly developing drive and control solutions for robotics and conveyor technology projects in France or Saint-Gobain, which collaborate with German mechanical engineering companies in production processes, material processing solutions, and manufacturing technology.

"The business relationships between companies on both sides of the Rhine have traditionally grown and are intense," emphasizes Yvonne Heidler from VDMA. "German technology is highly valued in France, and German companies can especially prevail against cheaper technologies when they lead to cost savings in production and operation."

Currently, changing market conditions and the political situation demand a lot from the players on both sides. "Added to this are intercultural aspects and bureaucratic obstacles such as reporting obligations for work assignments in France," she continues. "Cultural differences between the two countries should not be underestimated in everyday business. And those who master the local language clearly have an advantage," Heidler knows from experience.

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AI and sustainability are on the rise

The French government supports AI and Industry 4.0 through programs like AI Factory France, Investissements d’Avenir, and national strategies for the Smart Factory. Often, funding goes hand in hand with initiatives for CO₂ reduction and resilience in supply chains.

Companies use AI in manufacturing primarily for predictive maintenance, process optimization, quality assurance, and energy management. Typical examples include predictive maintenance of equipment, data-driven process control (SCADA/PLC integration), and digital twins to optimize production flows.

Particularly active players include Schneider Electric (with a focus on energy management, automation solutions, MES/SCADA integrations), Siemens France (automation, drives, digital twins, AI maintenance), Bosch Rexroth France: (drives, control technology, robotics), Dassault Systèmes (with the 3DExperience platform for digital twins to optimize energy consumption and material flows), Saint-Gobain (with a focus on recycling solutions, industrial optimization), Airbus (lightweight construction in aerospace, digital production processes, sustainability goals in supply chains), Eiffage (digital maintenance, AI-supported construction and industrial processes in large projects). In addition, many French industry clusters and startups often work on AI-based solutions for energy efficiency and waste reduction.

Revised by Julia Dusold