REGIONAL REPORT
most important sales market [ for Germany ]. Positive developments were also seen in Poland and the Czech Republic. India stayed on course for continued growth and has since become the fourth largest market in the industry,” added the VDW.
Domestic German development remains strained. However, there are positive signs from the increase in domestic orders.
“ Total order intake has been heading in the right direction for six months now. It is crucial that this leads to a sustainable recovery,” concluded the VDW.
AI may close the digitalisation gap
According to Deutsche Bank, AI as a turning point for the economy and markets.
“ Artificial intelligence is increasingly becoming a key driver of growth, competitiveness and capital markets. Germany is at a structural turning point: while its industrial base remains stable, the transition to the age of agentic AI will determine how Germany compares to its international peers in the future,” said the bank on 25 June 2026.
Robin Winkler, Chief German Economist at Deutsche Bank Research, commented that Germany is facing a decisive crossroads. In his view, the transition from generative to agentic AI will determine whether Germany catches up with its global competitors as a business location or falls further behind.
“ The next phase of technological transformation will be key in determining Germany’ s future competitiveness,” Winkler said at a media briefing in Frankfurt. While the country’ s industrial base has proven innovative and has offset location disadvantages such as high energy and labour costs through high-quality research and development, Germany still has considerable catching up to do on digitalisation, said the bank.
“ At the same time, in many areas of the German economy, digital processes remain limited in scope – and this is precisely where opportunity lies. The use of AI could unlock particularly large productivity gains here— significantly greater than in economies that are already highly digitalised. The ageing German society makes these productivity gains especially important. Given the chronic shortage of skilled workers, it is unlikely that the use of AI will lead to higher structural unemployment,” added the bank.
Image: @ BMW.
The BMW factory at Regensburg.
For Winkler, the conclusion is clear: artificial intelligence is not an optional topic for the future, but a key lever for growth, competitiveness and structural renewal.
For Christian Nolting, Global
Chief Investment Officer of the Private Bank, AI will be the dominant structural theme in the coming years— embedded in a more complex market environment.
“ Artificial intelligence is and will remain the structural growth driver for the economy and capital markets— and we are only just beginning,” Nolting said. With the transition to AI agents, momentum is now noticeably accelerating. Within a year, global token consumption for AI applications has increased almost twentyfold, underscoring the exponentially rising demand for computing power.
Ulrich Stephan, Chief Investment Strategist for Germany at the Private Bank, expects investment opportunities to broaden structurally in the coming years:“ The AI boom is entering its next phase— and it will become significantly more impactful: from generative AI to agentic AI to physical AI,” he said. Against this backdrop, an active, broadly diversified approach is becoming increasingly important.
Total order intake has been heading in the right direction for six months now. It is crucial that this leads to a sustainable recovery
Image: @ Deutsche Bank.
“ Successful investing in the AI age means identifying trends earlier than the market, while at the same time managing risks in a disciplined way,” Stephan concluded.“ Anyone who focuses only on the big names will miss the true potential of the AI revolution.” n
Left: Robin Winkler, Chief German Economist at Deutsche Bank Research.
Image: Jan Philipp Thiele, Unsplash.
Image: @ Wolfgang Weiser, Unsplash.
Frankfurt Central Station. The port of Hamburg, Germany.
60 | ismr. net | ISMR October 2026