Analysis of Development of Automotive Wire Harness Products in China in 2010

The automotive wiring harness is known as the "blood vessel" of a car and is usually considered to be the central nervous system of a car. It connects the on-board computer with various related functions on the vehicle. The content and quantity of electronic technology in automotive wiring harnesses have gradually become an important indicator for evaluating automotive performance. As China's auto industry continues to grow, the automotive wire harness industry has also developed rapidly.

I. Rapid increase in automobile output drives the rapid development of the automotive wiring harness industry in China

In recent years, China's automobile industry has developed rapidly. The automobile output has grown from 8.89 million units in 2007 to 13.79 million units last year, and in particular, the output of automobiles in 2009 has increased by 48.2% over the previous year. It is estimated that by 2010, China’s automobile production will exceed 15 million vehicles. The factors that drive the development of automobile wiring harness industry in China still exist.

According to the conservative estimate of the China Electronic Component Industry Association, if the average vehicle needs to use 65 sets of harnesses, the demand for automotive wiring harnesses in 2009 will be 89.65 million sets (excluding the need for new and old vehicle maintenance). The value of the wire harness is 4,800 yuan. In 2009, the automotive wire harness market had reached a scale of 66.2 billion yuan (excluding the need for new and old vehicle maintenance). It is estimated that in 2010, China’s auto production will reach 15 million vehicles, requiring about 1.02 billion sets of automobile wiring harnesses (calculated as an average of 68 sets of wiring harnesses per vehicle), and the market size will reach 67.5 billion yuan (the average value of the bundles per vehicle is 4,500 yuan. Meta-calculation).

Second, the increasing demand in the international market to promote the export of automotive wiring harness products in China

As China's auto wire harness industry continues to grow in demand from the domestic market, the global automotive wire harness market is becoming more attractive to Chinese auto wire harness companies. According to statistics from Gasgoo.com, in 2009, international buyers issued a total of 1208 frequency of automobile wiring harness purchases through Gasgoo.com, a 45.7% increase over the 656 frequency in 2008.

In addition, in 2005, the export volume of China's automotive wire harness products reached 149,000 tons, earning 1.13 billion US dollars. By 2009, the export volume of automotive wire harness products had reached 249,000 tons, generating foreign exchange of 2.33 billion US dollars. During the five years, the average annual growth rate of the export volume and export value of China's automotive wire harness products reached 63.7% and 65.9%, respectively, and the country’s auto wire harness exports achieved rapid growth.

According to Gasgoo.com, China has become an important production base for global automotive wiring harnesses. Foreign-funded enterprises have accelerated the transfer of production to China, and at the same time carried out localized R&D. Therefore, in the next few years, localized automotive wiring harness companies in China will face dramatic challenges.

Third, domestic automotive wire harness manufacturers face enormous challenges

In the automotive wire harness industry, the appearance of in-vehicle electronic products and devices has become increasingly complex, resulting in increasingly complex products. In this area, despite the production of labor-intensive products, it is faced with frequent changes in product styles and how to cultivate skilled operators has become a topic. Judging from the main bases for the production of automotive wiring harnesses, most of the bases are concentrated in coastal cities in terms of logistics conditions and ensuring workforce considerations.

The labor cost based on the automotive wire harness industry accounts for a high proportion of manufacturing costs. At the same time, China has a global advantage in this area. Since the mid-1990s, large global suppliers have accelerated the transfer of manufacturing operations to China. Among them, "Tianjin Jinju Automotive Wiring Harness" is the main base of Sumitomo Electric. In 2007, its output reached 9.44 million sets. Sumitomo Electric also built a production line for auto wire harnesses that is specially designed for Nissan in Fuzhou. At the same time, it plans to build this base in 2011 as the world's largest wire harness production base for Nissan.

The entry of foreign wire harness companies into the domestic market poses great challenges to local automotive wiring harness companies. Local companies need to achieve a major transformation in technology, product quality, and marketing methods. Shanghai Jiafeng Automotive Parts Co., Ltd., which has established a friendly relationship with Gasgoo.com, has adopted a series of new strategies to transform its marketing methods. It soon won wide acclaim from many customers in the domestic and foreign matching markets. It has established stable cooperative relations with many well-known international car companies such as Volkswagen, Delphi, JAC, Chery Automobile and Chrysler.