Global Market Outlook on Cable Harnesses

APeJ has been dominating the cable harness market for the past 4 years and is expected to continue until 2021. China leads the demand holding around 30 percent of the global demand.Increasing demand for interconnect systems in enterprise networking, subscriber equipment in telecom and power distribution and power train in automotive are the major drivers for the cable harness market

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Global Cable Harness - Market Maturity

Increasing demand for connectivity and internet protocol in emerging and developed countries and pent-up demand for automotive (especially cars) is expected to drive the cable harness market, globally. However, slowdown of economy and volatile raw material prices have been hindering the market growth in addition to several regulatory policies

Global Cable Harness Drivers and Constraints

Drivers

  • Growing demand for automotive (especially cars) at consumer level, especially in NA, Europe, and China, irrespective of the soft economies, is driving the automotive cable harness market
  • Increasing demand for connectivity and internet protocol in emerging and developed countries such as China, India, Germany, and the UK is expected to drive the telecom cable harness market, globally

Constraints

  • The medical, military, and aerospace sector demand for cable harness is reduced due to the austerity budgets for healthcare & defense, especially in developed countries like the US and Europe 
  • Slowdown of economy, especially in Europe, China, and Japan is another constraint for the cable harness market. In addition to this, there is a reduced demand for computer, industrial, and consumer sectors due to cautious consumption by businesses and individuals
  • Volatility in copper and crude oil prices is expected to restrain the growth of cable harness market, globally. Such volatility in prices and increase in competition have created pressure on manufacturers’ profit margin due to which some of the global players in the industry focus on shifting to locations where the final products are being assembled

Porter’s Five Forces Analysis (Global)

Supplier Power

  • Global cable harness market is highly raw material and labor intensive
  • Copper, Aluminum and Plastics (PVC) are the major raw materials and are abundantly available, which makes the supplier power low
  • Similarly, the suppliers are fragmented in most of the regions, so high competition within the industry also makes the bargaining power of suppliers to be low

Buyer Power

  • Buyer power is highly supported by large number of players in the industry, which gives the buyer high options
  • Switching costs to buyers is also relatively low because of the availability of more number of suppliers and generic equals in many applications. However, in the automotive and transportation sector, wiring harness manufacturers work closely with automotive manufacturers to design & develop a harness system in line with the vehicle model requirement. Hence, they do not change suppliers frequently

Barriers to New Entrants

  • Advanced technologies makes it significantly difficult for new competitors to enter the market because they have to develop those technologies before effectively competing
  • In addition to this, there are several big brands holding a large amount of market share. The brand identity in the industry is high. This may also create a significant barrier to new entrants in the market
  • Thus, the overall barriers to new entrants in the cable harness market is moderate

Intensity of Rivalry

  • Nowadays, the value-adds by offering various types of connector assembly along with cable harness has been increasing. This makes all top brands to intensively compete with each other to offer more such value-adds to attract the customers
  • The exit barrier is relatively low, hence weak firms are more likely to leave the market. This will increase the profits for the remaining firms 

Threat of Substitutes

  • Currently, there is no technology or product, which provides an alternative to cable harness from end-use/application point of view. Though there are wireless signal transmissions coming up, it may not create threat cable harness market for the next 10 years
  • Thus, threat from substitutes is likely to have minimum impact on the overall cable harness market