China’s Automation Market Rebounds: Dual Momentum from Recovery and Localization
According to a recent Macquarie Research Report, China’s industrial automation and robotics market showed a strong rebound in Q1 2025, marking the end of the inventory correction cycle. Industrial robot sales grew 11.6% year-on-year, while collaborative robot (cobot) production surged 41.4%, emerging as a key growth driver.
Despite competitive pricing pressures, robust demand from automotive, semiconductor, and lithium battery industries, along with steady advances in domestic technologies, has positioned China’s automation sector for simultaneous growth in scale and quality.
Industrial Robots: Collaboration Leads the Next Growth Wave
The industrial robot market has entered a new phase of steady recovery. In Q1 2025, sales rose 11.6%, driven by strong investment from automakers, semiconductor producers, and component manufacturers.
Collaborative robots (cobots) stood out, with production skyrocketing 41.4%, far surpassing traditional six-axis and SCARA robots. Cobots’ adaptability, safety, and ease of integration make them a key engine for future smart factory deployments.
Market Shifts and Competition Dynamics:
-
Foreign brands like FANUC (10.1%) remain dominant but are losing ground as domestic leaders rise.
-
Estun (9.9%) and Inovance (8.9%) climbed into the top tier, showing rapid gains in market share.
-
Automotive demand surged 45.4%, while the lithium battery sector rebounded to +10.5% growth after last year’s contraction.
Outlook: Macquarie projects moderate growth of 6.3% in 2025 due to price competition, with acceleration to 11.2–12.2% in 2026–2027 as the market stabilizes and domestic firms leverage their customization and rapid-delivery advantages.
Factory Automation: Bottoming Out and Rebounding
China’s factory automation sector grew 2.4% year-on-year in Q1 2025, ending four consecutive quarters of decline. Demand from OEMs in packaging, lithium battery equipment, and general machinery rose 3.3%, signaling a cyclical recovery.
Key Product Performance:
-
Servo Systems & Inverters: Inovance leads with a 31.4% share in servos and 20.8% in inverters, outperforming Mitsubishi and Siemens. Policy support and rising renewable equipment demand are boosting both segments.
-
PLC Market: Siemens maintains leadership with 45.2% share in large PLCs, but domestic small PLC localization increased from 38.2% to 41.0% year-on-year, with Inovance ranking fourth (6.7%).
Subsector Recovery:
European demand grew 1.8%, while municipal, petrochemical, and energy projects added momentum. Domestically, 3C electronics and metal processing remain key automation application fields benefiting from intelligent upgrades.
Core Components: Domestic RV Reducers Surpass 60% Market Share
As the “heart” of industrial robots, the RV reducer market expanded 9.7% year-on-year in 2024, outpacing robot unit growth. Domestic manufacturers achieved a landmark breakthrough—capturing over 60% market share, surpassing Japan’s long-term dominance led by Nabtesco.
Key Player – Twin Rings Transmission (Double Ring):
-
Holds 25% market share, second only to Nabtesco (33.8%).
-
Now supplies all four major global robot makers (FANUC, ABB, Yaskawa, KUKA).
-
Domestic RV reducers are priced 30–40% lower than imports, driving adoption.
-
The market is expected to grow at a 10.4% CAGR (2024–2028), with localization likely to exceed 70%.
In addition, harmonic reducers, ideal for light-load applications such as 3C assembly and medical robotics, are witnessing rapid advances led by Leader Harmonic (LHDS) and other domestic innovators.
Conclusion: From Substitution to Leadership
China’s industrial automation and robotics sector is entering a dual-driven growth phase—combining demand recovery and localization breakthroughs.
-
Short-term: Rebounding capital expenditure and inventory normalization are fueling sales.
-
Long-term: Domestic players’ strengths in customization, delivery speed, and cost efficiency will drive a transition from “import substitution” to technological leadership.
Macquarie identifies Inovance Technology (automation leader) and Twin Rings Transmission (RV reducer supplier) as top beneficiaries of this structural trend. Subsegments like collaborative robots and new energy equipment are poised to become the next major growth engines.
While challenges such as pricing pressure and macro uncertainty persist, the smart manufacturing transformation of China’s industrial base is irreversible, paving the way for domestic manufacturers to shift from followers to global leaders in the automation value chain.