Wire Harnesses/Connectors Market Expected To Grow

Autoparts Report, Dec 3, 2001

As the number of electronic components in cars increases and become more sophisticated, the demand for wire harnesses will grow at the original equipment level, according to new study. The introduction of onboard computers, navigation, telematics, and infotainment systems will bolster the need for complex harnesses and smaller connectors over the forecast period, according to research by Frost & Sullivan.

In its latest review of the this segment, entitled "North American Automotive Original Equipment Wire Harness and Connector Markets ," Frost & Sullivan said that revenues for the wire harnesses markets reached $10.62 billion in 2000. Market revenues for electrical connectors, which attach harnesses to other vehicle components, reached $2.28 billion, the company added.

Although the decline in vehicle production may slow revenues for a short term, the market is expected to rebound as production of new vehicles increases through 2007. "Suppliers must evaluate the entire electronic design of vehicles and work to become systems providers," says Frost & Sullivan Analyst Jasmine Sachdeva. "As automakers move toward common vehicle platforms, suppliers should look towards optimizing manufacturing efficiencies to be able to provide modules."

The challenge for harness and connector manufacturers is to remain profitable while reducing costs, the study said. Smaller participants will be significantly affected by pricing pressures, as they struggle to maintain profit margins while competing with higher-volume, full system vendors. Simultaneously, harness and connector manufacturers will need to develop innovative products that meet automobile manufacturers' needs in order to win contracts, the Frost & Sullivan report stated.

A top priority for automakers is to reduce the size and weight of wire harnesses and connectors, Frost & Sullivan said. "Growth in flat flexible cable and flexible printed circuitboards provide opportunities for growth as automakers are continually striving for space and weight savings," says Sachdeva. "Suppliers that can design and develop new technologies that allow for size, weight, and cost savings will definitely have a competitive advantage over other market participants."