The trend of intelligent upgrading in China's manufacturing industry is irreversible, and domestic manufacturers are moving from "replacement" to "leading," bringing long-term investment value to the Industry Chain upstream and downstream.
According to Zhitong Finance APP, Macquarie has released a Research Report indicating that in the first quarter of 2025, China's industrial robot and automation market will show significant recovery resilience, ending the inventory destocking cycle in the first quarter with sales in the industrial robot sector increasing by 11.6% year-on-year. Among these, the production of collaborative robots soared 41.4% year-on-year, becoming the "growth pole" of the industry. Despite facing price competition pressures, downstream demand in the automotive, Semiconductors, and Lithium Battery sectors is gradually warming up, along with continuous breakthroughs by domestic manufacturers in core technologies and market share. The industry is entering a key stage of simultaneous "quantity and quality improvement." The dual logic of "demand recovery + domestic substitution" in industrial automation is clear, and sub-sectors like New energy equipment and collaborative robots are expected to become new growth engines.
Macquarie's main viewpoints are as follows:
1. Industrial Robots: Demand Recovery, Collaborative Robots are the Growth Highlights
The Macquarie report shows that in the first quarter of 2025, China's industrial robot sales increased by 11.6% year-on-year, ending the previous inventory destocking cycle, with stable demand increases in automotive OEMs, Semiconductors, and Auto Parts. Notably, collaborative robots (cobots) continued to grow rapidly, with production in the first quarter surging 41.4% year-on-year, far exceeding traditional multi-joint robots (12.5%) and SCARA robots (11.2%), becoming the "growth pole" of the industry.
Market Competition and Pattern Changes
The share of foreign brands has slightly declined, while domestic leaders are rising: Although domestic manufacturers' market share has slightly fallen from 52.3% in 2024 to 51.4%, the top enterprises are performing well. Estun Automation (9.9%) and Shenzhen Inovance Technology (8.9%) are among the top ten in the industry, ranking second and fourth respectively, with continuous increases in market share; Fanuc (10.1%) remains in the first place, but foreign brands like KUKA, ABB, etc., expand their shares through price strategy adjustments.
Significant differentiation in downstream: demand from auto manufacturers increased by 45.4% year-on-year, the Lithium Battery industry rebounded sharply from -19.4% in 2024 to +10.5%, while only the photovoltaic sector saw a year-on-year decline of 15% due to capacity adjustments.
Future Outlook
Although the growth rate of industrial robots is expected to be adjusted to 6.3% in 2025 due to increased competition, it is predicted to rebound to 11.2% and 12.2% in 2026-2027. As foreign brands gradually raise their average prices to maintain profits, the pressure from price wars is expected to ease, and domestic manufacturers' advantages in customized services and delivery speed will further stand out.
II. Factory Automation: Bottoming Out and Accelerating Domestic Substitution.
In the first quarter, the demand for industrial automation increased by 2.4% year-on-year, ending four consecutive quarters of decline. The OEM market grew by 3.3% driven by the packaging machinery and Lithium Battery equipment sectors, ending a prolonged period of stagnation lasting 11 quarters.
Core product performance
Servos and Power Inverters: Shenzhen Inovance Technology remains the leader
Shenzhen Inovance Technology's market share in the servo system has increased to 31.4% (28.3% in 2024), and the market share of Power Inverters has reached 20.8%, both ranking first in the country, far exceeding foreign brands such as Mitsubishi and Siemens. With policy stimulation and the demand for New energy equipment, the annual growth rates for the servo and Power Inverter markets have been adjusted upwards to 2.6% and 1.3% respectively for 2025.
PLC Market: Siemens dominates, domestic rate improves
The localization rate of small PLCs increased from 38.2% in 2023 to 41.0% in 2024, with Shenzhen Inovance Technology ranking fourth (6.7%). In the large PLC market, Siemens occupies a share of 45.2%, but domestic manufacturers are gradually breaking through with price-performance advantages, increasing the localization rate from 5.9% to 8.3%.
Recovery in segmented fields
The EU market demand has grown by 1.8%, contributing to increments in municipal facilities, petrochemicals, Electrical Utilities, and other Industries; in China, 3C and Metal Fabrication are the largest application fields for automation, continuing to benefit from intelligent transformation.
3. Breakthrough in core components: The domestic share of Rotate Vector (RV) Reducers surpasses 60% for the first time
As the 'heart' of industrial robots, the RV Reducer saw a domestic demand growth of 9.7% in 2024, significantly surpassing the 3.9% growth rate of industrial robot Ontology, and for the first time, the market share of domestic manufacturers broke through 60%, breaking the long-term monopoly of Japan's Nabtesco.
Zhejiang Shuanghuan Driveline leads the domestic breakthrough.
Zhejiang Shuanghuan Driveline holds a solid second place in the domestic market with a 25% market share (the first being Nabtesco at 33.8%), and has already entered the supply chains of the four major international robot manufacturers (FANUC, ABB, Yaskawa, KUKA). With cost advantages (domestic RV Reducer prices are only 60-70% of foreign brands) and technological iteration, it is expected that the domestic RV Reducer demand will grow at a compound annual growth rate of 10.4% from 2024 to 2028, with the domestic share likely to further increase to over 70%.
Technical differences and market division.
RV Reducers dominate heavy-load robots (such as auto welding and handling) due to their high torque characteristics, while harmonic reducers have advantages in light-load scenarios (3C product assembly, Medical Devices). Domestic manufacturers are also accelerating breakthroughs in the harmonic reducer field, with companies like Leader Harmonious Drive Systems continuously increasing their market share.
Conclusion: The domestic substitution is irreversible, seizing structural opportunities.
Currently, the industrial robot and automation industry presents a dual logic of 'demand recovery + domestic substitution'.
Short-term: The reversal of the inventory cycle and the recovery of capital expenditure in downstream manufacturing drive sales growth;
Long-term: Customized service capabilities, rapid delivery efficiency, and cost advantages drive domestic manufacturers from market share enhancement to technological leadership. Macquarie points out that Shenzhen Inovance Technology (a leader in industrial automation) and Zhejiang Shuanghuan Driveline (a core supplier of Rotate Vector (RV) Reducers) are expected to continue benefiting from industry recovery and domestic substitution trends, while collaborative robots and New energy Fund equipment will become the "new engines" for future growth in their respective segments.
Despite ongoing challenges (such as price competition and fluctuations in macro demand), the major trend of intelligent upgrading in China's manufacturing industry is irreversible. Domestic manufacturers are moving from "substitution" to "leadership," bringing long-term investment value to the upstream and downstream of the Industry Chain.
Risk warning: Downstream demand may fall short of expectations, technological research and development may be below expectations, and international trade environment may change.
