In the fields of economics and game theory, a zero-sum game is a special and cruel competition model. It means that the total interests of the participants are fixed, and one party's gain necessarily means another party's loss. It is like a cake-cutting game: the size of the cake is fixed, so if you take one more slice, someone else inevitably gets one less.

Today, the concept of the zero-sum game is increasingly applicable to the global construction machinery market. In the early days, the global construction machinery market was still in a phase of incremental expansion, and almost all enterprises had the opportunity to get a share of this rapidly growing market; now the situation is entirely different. As the market matures and growth space narrows, competition among enterprises has shifted to a battle over existing stock, and the fighting is extremely fierce.

Entering 2025, a number of leading overseas construction machinery enterprises have seen declines of varying degrees in both revenue and net profit, vividly demonstrating the cruelty of market competition.

Multiple overseas leaders see both revenue and profit decline

1 Caterpillar

In the first half of 2025, Caterpillar's sales were approximately US$30.8 billion, down 5.19% year on year; operating profit was approximately US$5.439 billion, down 22% year on year. Among this, Caterpillar's second-quarter 2025 sales were US$16.6 billion, slightly down from US$16.7 billion in the same period last year, and operating profit was US$2.860 billion, down 18% year on year.

2 Komatsu

In the first quarter of fiscal 2025 (April 1 to June 30, 2025), Komatsu's net sales were 909.5 billion yen, down 5.2% year on year from 959.8 billion yen in the same period of 2024; operating profit was 140.4 billion yen, down 10.6% year on year.

3 John Deere

In the first three quarters of fiscal 2025 (John Deere's fiscal year runs from November 1 to October 31 of the following year), John Deere's operating revenue was US$33.290 billion, down 17.95% year on year; net profit attributable to the parent company was US$3.962 billion, down 32.33% year on year.

4 Volvo Construction Equipment

In the second quarter of 2025, Volvo Construction Equipment's net sales were SEK 22.906 billion, down 6% year on year; adjusted operating profit fell to SEK 2.993 billion, down 23% year on year.

5 Hitachi Construction Machinery

In the first quarter of fiscal 2025 (April 1 to June 30, 2025), Hitachi Construction Machinery's net sales were 306.1 billion yen, down 6.7% year on year; operating profit was 13.4 billion yen, down 49.8% year on year.

Fierce competition under the zero-sum game

In sharp contrast to the "chill" felt by overseas giants, China's construction machinery industry export data are steadily rising. According to customs data, in July 2025 China's construction machinery exports amounted to US$5.238 billion, up 19.3% year on year; from January to July 2025, China's construction machinery exports totaled US$33.486 billion, up 10.8% year on year.

The strong contrast between the decline in revenue and profit of overseas leaders and the continued growth of China's construction machinery exports shows that China's construction machinery giants, relying on advantages such as technological innovation, layout in emerging markets, and taking the lead in the new energy track, are steadily increasing their share of the global market. Influenced by the characteristics of the zero-sum game, competition in the global market is now increasingly fierce, with all parties doing everything they can to secure more gains.

1 Obstruction from trade barriers among countries

In 2025, after Trump took office, the tariff war quickly began. In January 2025, he announced an additional 10% tariff on Chinese goods; in April, US tariffs on China rose to as high as 145%; in May, China and the US reached a 90-day tariff reduction agreement, with US tariffs lowered to 30% and China's to 10%; in August, the China-US tariff truce was extended by 90 days to November 10. The US tariff increases have undoubtedly dealt a considerable blow to China's construction machinery industry; the profits of some enterprises will decline, and export business will be restrained to a certain extent.

On April 28, 2025, the European Commission announced tariffs of up to 66.7% on mobile elevating work platforms (MAE) imported from China. The new tariffs will apply to Chinese companies including Zoomlion Intelligent Aerial Work Machinery Co., Ltd., Zhejiang Dingli Machinery Co., Ltd., and Hunan Sinoboom Intelligent Equipment Co., Ltd. These additional tariffs have dealt a certain blow to Chinese companies' market share in the EU, and the 41% market share they previously held may be difficult to maintain, facing the risk of being seized by local EU enterprises or other non-Chinese competitors.

In July 2024, Russia significantly raised the recycling fee for certain categories of imported construction machinery, which will be reflected in the prices of imported heavy bulldozers, mining dump trucks, and loaders. For example, for heavy bulldozers with 600 to 800 horsepower, a new imported unit requires a disposal fee of 5 million rubles (about RMB 410,000); for new dump trucks with 200 to 650 horsepower, the recycling fee is 8.5 million rubles (about RMB 700,000); the recycling fee for new loaders will increase nearly 2.3 times to 1.8 million rubles (about RMB 147,800); this undoubtedly sharply raises the export costs of Chinese enterprises.

2 Dislocation competition in China's product going global

In the global construction machinery sector, the wave of electrification is quietly rising, and the Chinese market is undoubtedly at the forefront of this wave, ushering in an unprecedented window for "overtaking on the curve." At present, the electrification rate of global construction machinery is less than 10%, but the Chinese market is showing explosive growth. Taking a sub-category as an example, in July 2025 China's electric loader sales reached 2,391 units, with a penetration rate of 26.6% for the month.

By contrast, foreign construction machinery giants appear relatively lagging in their electrification layout, still focusing on upgrading fuel-powered products. Internationally renowned enterprises such as Caterpillar and Komatsu, although they have long occupied a leading position in the construction machinery field, are slow in their electrification transformation. This provides an excellent opportunity for Chinese enterprises to achieve dislocation competition in the field of electric construction machinery; Chinese enterprises can rely on their first-mover advantage in electric technology to quickly seize market share and enhance brand influence.

In addition to the dislocation competition between electric products and fuel products, the dislocation competition between China's used machines and foreign new machines is equally notable.

At present, regions such as Southeast Asia and the Middle East are in a period of accelerated industrialization, with large infrastructure gaps and strong demand for cost-effective small and medium-sized equipment; China's used machines precisely meet this demand. Compared with new machines from mature markets such as Europe, the US, and Japan, China's used machines have a significant price advantage. For example, a used all-terrain crane with 80% of the performance of a new machine may cost only 30% of a new machine, and it is suitable for the diverse construction scenarios of developing countries. With this "high cost-effectiveness + flexible service" model, China is gradually replacing countries such as the US, Japan, and South Korea to become the largest importer of used construction machinery in emerging markets such as Southeast Asia, South America, and Africa.

Who can win under the zero-sum game

At present, in the global market, long-established construction machinery enterprises such as Caterpillar, Komatsu, and John Deere still hold an absolute advantage. Although, as mentioned earlier, their revenue and profit have declined, their total revenue and profit figures remain enormous. Caterpillar in particular: the revenue of this single company exceeds the combined revenue of multiple Chinese construction machinery enterprises.

However, even with established enterprises holding an absolute advantage, Chinese construction machinery enterprises also have their own relative advantages.

First, as global carbon emission requirements continue to rise, the advantages of China's equipment in electrification and green development are becoming increasingly obvious. For example, the European market has quite strict environmental requirements for equipment, and China's electric products perfectly meet these requirements in this regard; combined with the products' strong performance, this has led to very rapid growth of China's electric construction machinery equipment in the European market in recent years. As overseas customers use them for longer, the economic benefits of electric products will also become prominent, which will further enhance the recognition of China's electric products in the international market and then drive the continued expansion of market share.

Second, China's construction machinery equipment has relatively large advantages in emerging markets such as Southeast Asia, the Middle East, and Africa. These regions are in a period of accelerated industrialization, with large infrastructure gaps and strong demand for cost-effective products. China's products, while offering decent performance, are also relatively cheaper than equipment from overseas enterprises, which makes Chinese products widely popular in emerging markets. Especially in the used machine sector, in 2024 China's used excavator exports reached 120,000 units, exceeding for the first time both domestic demand for new machines (100,500 units) and exports of new machines (100,600 units).

Combining the above two points, although overseas established enterprises still hold an advantage in the global market at present, if the timeline is extended, in the future, as the core competitiveness of Chinese construction machinery enterprises continues to improve, it is not impossible for them to take the lead in the global construction machinery market.

Looking ahead, competition in the global construction machinery market will remain extremely fierce. The enterprises that will stand out in this zero-sum game in the future will certainly be those that can continuously innovate and dare to change; only such enterprises can lead the industry toward a more prosperous future.