Wire Harness Manufacturer’s Association Conference
A market overview of the industry
By John Colwell, Bishop & Associates, Inc.

Members of the Wire Harness Manufacturer’s Association (WHMA) recently gathered in Indianapolis, Indiana U.S.A. for its annual conference and exhibition. The event was well-run and well-attended, featuring an exhibition that included the latest products, tools, and equipment for manufacturing and testing cable assemblies. However, the most notable aspect of this conference was the extraordinary amount of informal communication among members, and between exhibitors and members; something that could only occur in a smaller show setting. The discussions centered on competitiveness, cost control, and customer retention. And, of course, there were some war stories.

Bishop & Associates, Inc. provided a market overview of the cable assembly and wiring harness industry based on its new report, World Cable Assembly Market for Connectors. Some of the highlights of that presentation are as follows: 

• The merchant market for wire harness and cable assembly shipments in 2005 is valued at $30.66 billion.

• Harness assemblies represent the largest category of cable shipments at $19.2 billion. Included in this category are high-volume, high-value automotive harnesses, appliance harnesses and simple connectorized pigtails.

• Round jacketed cable assemblies with insert-molded or mechanical strain-reliefs account for an additional $6 billion in cable assembly shipments. Included in this category are high-volume, standards-based commodity cables commonly used in computer/telecom systems and other end-use industries.

• Other significant categories include FRC cable assemblies, power cords, and optical cable assemblies.

• The total value of connector shipments in 2005 was approximately $35.5 billion. Of this, connector products that mount on backplanes and printed circuit boards comprised an estimated $19.5 billion in connector shipments. The remaining $16 billion were connectors mounted on wires, optical fibers, and flexible substrates.

• The estimated value of connectors sold to the merchant cable assembly market is estimated at $9.5 billion. The merchant cable assembly market includes cottage, mom-and-pop, regional, national, and global producers, including the global CEMs. 

• The value of connectors sold into the captive market is estimated at $6.5 million in 2005. The captive portion of the cable assembly market includes the OEMs who produce their own assemblies and cable assemblies that are assembled by craft personnel who are engaged in installation, maintenance, and repair of equipment.

• The automotive harness industry is the largest end-use sector for cable assemblies with a value of $9.98 billion in 2005 shipments. The forecast for 2010 is $13.93 billion, representing a 5-year CAGR of 6.9 percent.

Value of Cable Assembly Shipments by Equipment Sector

• The automotive harness industry is in the process of change. High structural costs and labor rates in the developed regions are forcing regional manufacturing shifts. At the same time the electronic content of vehicles continues to increase. There are a growing number of RF applications. Hybrid electric vehicles (HEVs) are introducing new high-voltage, high-power interconnection applications.

• Telecom/datacom is the second largest end-use sector with cable assembly shipments valued at $4.68 billion in 2005. The forecast for 2010 is $6.97 billion, representing a 5-year CAGR of 8.3 percent.

• In the post Y2K recession, the telecom system OEMs moved quickly to outsource their manufacturing which, in turn, led to a shift in manufacturing to lower-cost regions.

Comparative costs and how to manage them were key themes at the conference. Bill Canis of the National Association of Manufacturers (NAM) gave an outstanding keynote presentation on structural costs and the vital role that manufacturing plays in the well-being of national economies. For anyone who believes that competitiveness is simply a matter of comparative labor rates, Canis’ presentation is truly an eye-opener. He discussed the impact of energy costs, hydrocarbon-based material costs, corporate tax rates, tort costs, and regulatory costs.
 

Domestically-imposed costs by governments increase the cost of doing business in the United States by 22 percent. Germany, the United Kingdom, Canada, and France also carry high governmental cost burdens. When asked how small- and medium-scale manufacturers can sensitize elected officials to the challenges facing manufacturers, Canis suggested inviting government officials into your manufacturing facilities for a tour and a little publicity—makes perfectly good sense to me.

More information about the Wire Harness Manufacturer’s Association can be found at www.whma.org. To learn more about the good work the NAM is doing, visit www.nam.org.

John Colwell
Director of Telecom/Medical/Instrumentation, Bishop & Associates, Inc.
John Colwell’s background includes 10 years at Nortel Networks, Cable Group, where he directed the U.S. premises cable marketing effort. Additionally, Colwell directed its global product development group. Prior to joining Nortel, John held positions in engineering and business planning and development at Amphenol Corporation.