China's Robot Wars: Domestic Champions Seize Market Share As Broader Automation Market Sputters
A detailed research note published by Goldman Sachs on October 30, 2025, offers a granular look into China’s fiercely competitive industrial automation and robotics landscape for the third quarter. The report, based on MIR sales data, is critical for investors as it not only quantifies the accelerating dominance of domestic manufacturers over their foreign rivals but also flashes warning signs of a significant market deceleration and a worrying inventory build-up, painting a complex picture for the sector heading into 2026.
The headline finding is the relentless march of local Chinese brands. After a strong year, they have consolidated their control over the industrial robot (IR) market, pushing foreign competitors into a defensive crouch. As Goldman notes, the shift is undeniable and backed by hard numbers.
"China local IR players’ total market share reached 55% in 3Q25, increasing by +2pp yoy/+1pp qoq, outpacing overseas brands (-2pp yoy/ -1pp qoq) and continuing the trend of domestic players gaining market share in 2025 to date. This was fueled by +12% yoy sales volume growth for domestic brands, outpacing overseas brands (+2% yoy)."
This trend has propelled local champions to the top of the leaderboard. ESTUN Automation has successfully defended its top spot, even as its performance shows some quarterly volatility.
"Overall, ESTUN and Inovance continued to lead local players in the IR market, maintaining their No.1/No.4 positions for all three quarters in 2025 and ytd with 10%/8% market share. ESTUN continued to edge out peers e.g. FANUC who had 9% market share."
A Decelerating Market Flashes Warning Signs
However, this domestic triumph is set against a backdrop of a cooling market. The broader industrial automation (IA) sector contracted, signaling weakening capital expenditure. The full-year outlook for 2025 is now a stagnant 0% growth.
"Total industrial automation (IA) market was -2% yoy in 3Q25 with the project/OEM markets -4%/+2% yoy, respectively, and we expect the full year to be 0% yoy in 2025E."
The robotics segment, while still growing year-on-year, has hit a speed bump. The sharp deceleration from the second quarter's blistering pace is a cause for concern.
"3Q25 total industrial robot (IR) unit sales according to MIR data reached 81k, marking +7% yoy but -6% qoq, a notable slowdown compared to 2Q25’s strong of +20% yoy/+12% qoq."
Perhaps most worryingly, the report uncovers a significant inconsistency between production figures and actual sales, pointing to a potential inventory glut. Even after accounting for robust exports, the channel appears to be building stock at an uncomfortable rate.
"Substantial discrepancy between industrial robot production and domestic sales (c.123k units in 3Q25) was partially explained by exports of c.51k... However, after netting exports, residual build still equates to about 1.6 months of inventory vs. 3Q shipments."
A Tale of Two Giants: ESTUN vs. Inovance
Diving into the company-level battles, the strategies and performance of China's two leading players—ESTUN and Shenzhen Inovance Technology—reveal different paths to victory.
ESTUN solidified its number-one ranking in the overall robot market, showing particular strength in the high-value large robot segment. The bank’s data shows a clear divergence in its performance:
"For Large 6-axis robots, domestic brands maintained their market share at 33%... ESTUN ranked #3 with 15% share (+1pp qoq/+6pp yoy, +71% yoy/+14% qoq sales volume)." However, in smaller robots, its leadership is less pronounced, with its market share in small 6-axis robots falling 1pp both sequentially and year-over-year.
Inovance, meanwhile, tells a story of component dominance and strategic rebounds. While ranked #4 in the overall robot market, the company is an undisputed titan in the core components that power automation systems. Goldman highlights its iron grip on key segments:
"For IA components in 3Q25, Inovance maintained its #1 ranking in Servo (32% share...) and Low Voltage Inverter (21% share...). In Mid-to-Large PLCs, Inovance held its #4 position... as the sole domestic player in the top 5."
Furthermore, Inovance executed a remarkable turnaround in SCARA robots, a highly competitive field. After a poor Q2, it bounced back aggressively to reclaim the top spot, largely at the expense of foreign leader Epson, whose share plummeted from 21% to 15% quarter-over-quarter.
The report ultimately confirms a structural power shift in one of the world's most critical technology sectors. Chinese firms are no longer just competing on price but are winning on technology and market access. Yet, the victory comes at a time when the market is showing clear signs of fatigue, and the looming inventory overhang could mean the next few quarters will be a bumpier ride for everyone involved.