Automotive Connectors Market Analysis

Automotive Connectors Market (Global, 2024)

Introduction

The Automotive Connectors market is set to play a key role in the evolution of modern vehicles, driven by the increasing complexity of vehicle electronics and the growing demand for enhanced connectivity features. As vehicles become more and more integrated with advanced technologies such as electric powertrains, self-driving systems and infotainment systems, the need for reliable and efficient connectors has never been greater. These components are essential for enabling the communication between the various vehicle systems and for ensuring their proper functioning and safety. The shift towards electric vehicles and the implementation of stricter regulatory standards is driving the development of new and improved connector designs and materials, which offer improved performance and long-term reliability. The industry is expected to witness a great deal of innovation in the coming years, as manufacturers seek to keep up with the rapid pace of change in the car market.

PESTLE Analysis

Political

By 2024, the market for automobile electric connectors will be influenced by various political factors, such as government regulations aimed at improving vehicle safety and emissions standards. In the European Union, for example, the General Regulation on Vehicles for Personal Use (GRPPU) will require all new vehicles to be equipped with advanced safety features by 2024. This regulation will affect about 15 million vehicles per year. Consequently, the market for advanced automobile electric connectors that support advanced safety systems will grow.

Economic

The economic conditions are also determining the market for automotive electrical connectors, especially in the context of global supply chains and the cost of production. In 2024, the average price of raw materials for the manufacture of automotive electrical connectors will have risen by 12 percent due to inflation and supply chain disruptions, thereby affecting the profits of manufacturers. The labor market in the United States, which is expected to employ around 9.5 million people in 2024, is also expected to be strong, thereby affecting the production capacity and cost of the industry.

Social

Social trends are increasingly favouring electric vehicles and sustainable mobility solutions. In 2024, in the major markets, more than 70 per cent of consumers are willing to pay a premium for electric vehicles. These vehicles usually require special charging and battery management connections. In this rapidly growing market, which will account for 25 per cent of new vehicle sales in the coming year, manufacturers are developing special vehicle connections.

Technological

TECHNICAL ADVANCEMENTS ARE FASTLY CHANGING THE CAR INTERFACE MARKET. In 2024, the integration of smart devices into vehicles will lead to the development of high-speed data transmission connectors. For example, 10 Gb/s will be the standard for new models, resulting in a demand for high-speed data transfer connectors that is up by 30% compared to the previous year. This trend is being driven by the growing complexity of vehicle electronics and the need for better connectivity.

Legal

Legal requirements, in particular the compliance with international standards, are of paramount importance to the market for automobile electrical connection devices. In 2024, the International Organization for Standardization (ISO) revised its standards for automobile electrical connection devices and required manufacturers to meet the requirements of the ISO 26262 standard for safety. This standard applies to more than 5,000 manufacturers of automobile components and necessitates the investment in quality assurance and testing processes to meet the legal requirements.

Environmental

The subject of the environment is increasingly important in the field of automobile wiring-harnesses. In the year 2024, the European Union will require that all automobile components, including wiring-harnesses, conform to the Restriction of Hazardous Substances (RoHS) directive, which restricts the use of certain hazardous materials. Approximately 80% of automobile wiring-harnesses are expected to conform to these standards, which will contribute to the reduction of the automobile industry’s ecological footprint.

Porter's Five Forces

Threat of New Entrants

Barriers to entry are medium in the automobile electrical wiring device market due to the need for significant capital investment in both technology and manufacturing capacity. There are economies of scale and established brands offer a barrier to new entrants. But technological advances and the growing demand for electric vehicles offer opportunities for new and inventive companies.

Bargaining Power of Suppliers

The bargaining power of the suppliers in the market for automobile electrical components is relatively low. There are many suppliers, and many components can be obtained from different suppliers. The suppliers are thus unable to demand a high price and a long-term contract. But if the components are highly specialized, some suppliers may have a greater bargaining power.

Bargaining Power of Buyers

High - The buyers of the car electrical equipment have high bargaining power because of the many suppliers and the availability of alternative products. They can easily change suppliers or negotiate better prices and conditions. Suppliers are therefore forced to be competitive and to satisfy the buyers' requirements.

Threat of Substitutes

The threat of substitutes in the market for automobile connectors is moderate. There are alternative materials and technologies that can be used for similar purposes, but the special requirements of automobile applications often require the use of special automobile connectors. However, technological development can lead to the emergence of new substitutes that can shake up the market.

Competitive Rivalry

Competition in the market for automobile electrical and wiring systems is intense. This is a result of the presence of many established competitors and the constant technological innovations. The competition is based on price, quality, and technological advances. The rapid growth of electric vehicles and smart automobiles increases the competition even more. The companies want to gain a share in these new markets.

SWOT Analysis

Strengths

• Growing demand for electric vehicles (EVs) driving connector innovation.
• High reliability and performance standards in automotive applications.
• Established supply chains and partnerships within the automotive industry.

Weaknesses

• High initial costs associated with advanced connector technologies.
• Limited awareness and understanding of new connector technologies among smaller manufacturers.
• Dependency on the automotive industry's cyclical nature.

Opportunities

• Expansion of smart vehicle technologies and IoT integration.
• Increasing focus on sustainability and eco-friendly materials.
• Emerging markets showing growth potential for automotive production.

Threats

• Intense competition from alternative technologies and materials.
• Regulatory changes impacting manufacturing processes and materials used.
• Economic downturns affecting automotive sales and production.

Summary

The Automotive Connectors Market in 2024 is characterized by strong demand for electric vehicles and smart technology, as well as well-established supply chains. High costs and market dependence on the car cycle are still the challenges. Opportunities lie in the expansion of the IoT and the implementation of sustainable development. Threats come from competition and regulatory changes. Strategically, innovation and market education will be the key to promoting strengths and opportunities and reducing weaknesses and threats.