Komatsu announced that its revenue reached a record high for fiscal 2025 due to the effects of a weaker yen and improved pricing. However, the company explained that profits fell below the previous year’s level due to declining demand for construction machinery in North America and rising costs.
In North America, the company reported that demand for residential construction remained sluggish and that machinery purchases by rental companies had also declined. It also noted that the Asian market remained generally weak.
Conversely, demand for mining equipment remained high, with the resources sector underpinning its performance. It also stated that its parts and services business had performed steadily.
Furthermore, although Komatsu acknowledged that ‘the business environment remains uncertain’, the company expressed the view that ‘infrastructure investment and mining demand will remain robust’.
Source: Komatsu Newsroom
PSR Analysis: Komatsu’s FY2025 results suggest that the global construction equipment market is no longer moving in a synchronized cycle. While North American construction equipment demand weakened due to high interest rates and softer residential activity, mining equipment demand remained resilient, creating an increasingly bifurcated market structure.
More importantly, the results highlight how aftermarket and service revenues are becoming strategically more important than unit sales growth. In previous downturns, OEM performance depended heavily on new equipment demand. Today, fleet digitization, predictive maintenance, and long-life mining assets are allowing major manufacturers to stabilize earnings even as equipment replacement cycles slow.
Another notable point is that weakness in Asia contrasts with continued strength in resource-related investment. This suggests that future equipment demand may become increasingly tied to energy transition infrastructure, mining development, and strategic commodity supply chains rather than traditional urban construction growth.
The regional divergence also creates a more favorable environment for lower-cost Chinese manufacturers in emerging markets. As financing costs remain elevated, contractors in Southeast Asia, the Middle East, and Africa are likely to prioritize acquisition cost over lifecycle efficiency, particularly in non-premium applications.
For Japanese manufacturers, this may accelerate a strategic separation between “premium lifecycle-oriented markets” and “price-driven replacement markets.” In that environment, competitiveness may increasingly depend not only on machine performance, but also on financing capability, parts logistics, uptime support, and digital fleet integration. PSR
