Automotive Cable Assembly Market Trends
By David Pheteplace, Bishop & Associates Inc.

This is an interesting time for the automotive industry. GM and Chrysler have received billions in bail-out money. Rick Wagoner has just resigned as CEO of GM at the request of the government. GM has 60 days to develop a plan to show it can survive. Chrysler has 30 days to form an alliance with Fiat. With this backdrop, we now wander into the wilderness of projecting the trends for this industry.

Technology Trends
Interconnect technology in the automobile has come a long way in the last 50 years. In the 1960s, the main interconnect found in automobiles was for turn signals, headlights, brake lights, interior lights, and the radio; and under the hood, the starter motor and ignition. The 1970s saw some minor changes and additions, but the 1980s started the real electronics revolution in automobiles. The ‘80s brought the introduction of Electronic Control Units (ECU), which became the brain of the car, electronic fuel Injection, ABS electronic anti-lock brake systems, and airbag systems. In the 1990s, these systems were adopted in most vehicles and led to a proliferation of the other electronic systems and sensors found in cars today, increasing safety and performance, and reducing pollution levels. Many luxury features found only in high-end vehicles as recently as the 1970s, such as electric windows, heated seats, heated exterior mirrors, electric seat/pedal adjustment, electric mirror adjustment, and climate control systems, have become more common across all makes and models. Additional systems found today include GPS (global positioning) systems, electronically-controlled transmissions, high-end surround sound music systems, satellite radio options, rear seat video and gaming consoles, multiple zone climate control, and iPod hook ups, just to name a few. Needless to say, this has increased the amount of interconnect in today’s automobiles.

Delphi USB Port for Automotive and Airbag Squib Assembly

Larry Matola, lead architect of new business development at Delphi Corp., has seen several trends in automotive cable assemblies. There are two stand-out trends, he says: The OEMs are driving for both weight and cost reduction. Delphi has addressed these issues with the same solutions: miniaturization. They have reduced wire sizes down to 22- to 30-gauge wire, and they are utilizing a wafer-style connector that can be machine-assembled/terminated, resulting in less weight, less material cost, and less labor. The wafer connectors allow for the handling of the thin (flexible) wire and the mass plugging of the wires, instead of individual contacts into the connector bodies, further reducing labor and improving quality.

Delphi Wafer Connector Assembly

Delphi also utilizes a smart design software package, which allows them to optimize the wire harness design (see the Smart Wiring Harness picture below and compare it to the mid-size car harness). The optimization places the electronic modules in the harness assemblies to minimize run length and splicing, and helps reduce the overall cost and weight.

Matola also sees the possibility of bussing in future vehicles. FlexRay is a time/event-triggered network protocol for automotive applications developed by the FlexRay Consortium. Future applications of FlexRay could include steer-by-wire, brake-by-wire, and transmission control, which could potentially eliminate hydraulic and mechanical systems in automobiles, thereby further reducing weight and cost.

Delphi has also responded to the increasing adoption of the latest high-tech electronic systems into automotive use. These systems include USB (Universal Serial Bus), IEEE 1394 (Fire Wire), and Ethernet systems (see the Delphi USB port picture). The ports will allow a variety of electronic devices, from computers to iPods, to be connected to your car.

Matola also pointed out that hybrid and electric vehicles are presenting new challenges to the automotive cable assembler. These cars still employee 12-volt ground systems, but the charging and drive systems can be operating at a number of different voltages and at hundreds of volts. These systems utilize very large, three-phase coaxial cables and special high-voltage connectors to transmit the power.

Market Trends
The automotive market for cable assemblies and interconnect components in vehicles hit its high point in 2007, when approximately 69 million cars were produced worldwide. The average vehicle is estimated to contain $500 to $600 of interconnect content, ranging from more than $100 for the small, inexpensive vehicles sold in China and the Asia-Pacific area (think of the new Tata Motors Nano set to go on sale in India this month for $2,200), to more than $1,000 for some high-end vehicles, such as a fully-loaded SUV. Bishop & Associates estimates the worldwide market for automotive cable assemblies at $37.7 billion for 2007, and declining to $33.2 billion in 2008 (down 12 percent). It remains to be seen where the market will go in 2009 and beyond.

Initial indications for 2009 are not good. In the U.S., sales for the first two months were approximately 1.3 million units, or an annualized volume under 8 million units. Compared to 2007 at 16 million units and 2008 at 13 million units, this would correspond to a 50 percent decline in just two years in the U.S. market. Given that unemployment is still rising in the U.S., Europe, Japan, and China, and the tight credit market, this trend is likely to continue worldwide through 2009. While the pundits have been projecting 55 million units worldwide, and 10 million in the U.S., do not be surprised if the sales come in well below those numbers. Bishop & Associates is projecting the worldwide market for the cable assembly industry for automotive to drop 36 percent in 2009

David Pheteplace Bishop & Associates Inc., Market Segment Director - Cable Assemblies David Pheteplace joined Bishop & Associates in 2008 as its market segment director for cable assemblies. Pheteplace, a management consultant for the electronic and interconnect industry, specializes in operational and strategic analysis, problem solving, and solution implementation. He has more than 20 years of experience in the connector industry, including managing divisions for Amphenol, Cinch, and Robinson Nugent. Pheteplace can be reached at www.pheteplace.com.