Facts & Figures: Cable Assemblies for the Transportation Market

Transportation market sector sales for cable assemblies in commercial aviation continue to ascend, as sales growth is driven by regional air travel.

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Bishop tracks 13 companies in the transportation market sector. These companies’ combined sales have grown year over year until the first two quarters of 2015. In 2013, these companies grew 2.6% year over year and 4.7% in 2014. In 2015, the companies contracted 1.7% over the prior year results in 1Q15 and 3.6% in 2Q15. In comparison with these companies, the cable assembly market for the worldwide transportation market sector grew 2.8% in 2013 and 10.0% in 2014.

Bishop follows electronic interconnect sales trends in 13 markets. The combined annual revenue of all the market sectors was $4.35 trillion in 2014 and grew 1.9% over 2013. Of the 13 market sectors, transportation was the sixth fastest-growing market sector in 2014 at 4.7%, with combined revenues of $362.1 billion. Profitability was $26 billion at 7.2% of sales.

Of the companies followed for transportation, Boeing had the largest growth at 19.3% for the first half of the year. Including Boeing, five companies had double-digit increases in sales and three had double-digit declines.

Boeing grew first half sales to $32,258 million, up 19.3% from the prior year. It delivered 381 commercial airplanes in the first six months, an increase of 11% over the prior year. Boeing’s backlog is $489 billion with approximately 5,700 airplanes on order.

Westinghouse Air Brake sales grew 16.8% in the first half to $1,666 million. Its Freight Group business, which focuses on the rail industry, was up 31% over prior year.

PACCAR grew its sales 15.4% in the first half of 2015 to $9,913 million. Ron Armstrong, chief executive officer of the company said, “PACCAR’s excellent financial results reflect the benefits of increased truck sales in North America and Europe, record quarterly aftermarket parts profit, and robust financial services results worldwide.” The company manufactures Kenworth, Peterbilt, and DAF vehicles.

Trinity Industries and Wabash National Corporation grew 12.1% and 12.8%, respectively. Both companies focus on commercial transportation and energy.

In contrast to Boeing, EADS (Airbus) sales for the first half were down 17.7% in US dollars. When measured in euros, however, the company reports commercial airplane revenues were up 9%. EADS delivered 304 commercial airplanes in the first six months.

The following table shows the results for the 13 companies Bishop tracks in the transportation market sector.

Transportation Market Sector – Sales and Net Income

Transportation Market Sales and Net Income 2Q15

As shown in the following chart, year-over-year sales results have contracted in 2015. Prior to this contraction, quarterly sales had increased for six consecutive quarters. Sequentially, second quarter 2015 sales were up 7.4% from the first quarter of 2015.

Transportation market quarterly sales changes

Trends in the Transportation Market

  • The production of narrow-body aircraft has picked up worldwide to accommodate an increase in regional air travel and to address the airlines’ need for better fuel economy.
    • Boeing and Airbus have been the major beneficiaries from this increase in business, for Boeing’s 737 series and Airbus’ 320 series.
    • COMAC, Commercial Aircraft Corporation of China, plans to compete with Boeing and Airbus with the C919. The first flight of the C919, however, has been delayed until late 2015 with no deliveries until at least 2018. Its ARJ21, a regional jet, was certified in December 2014. It is slated to go into service in February 2016.
    • In addition to the narrow-body aircraft, regional jet manufacturers Embraer and Bombardier see a market for 7,000 of the 70-to-100-seat aircraft over the next 20 years.
  • The narrow-body and wide-body aircraft are using more fiber optic assemblies. To reduce weight and improve fuel economy, fiber optic assemblies and bus systems are being used extensively in the newer models of aircraft from Boeing and Airbus.
  • The new emission standards for Class 8 trucks will result in more cable assembly opportunities. These new emission standards will require more cable assemblies in vehicles for the emission controls in new vehicles and possibly retrofits of existing truck assemblies. In addition, the trucks will now have diagnostic ports that will require cable assemblies to download information to the diagnostic equipment.
  • The uncertain cost of fuel is increasing the attractiveness of rail for passenger and freight movement. Pound for pound being transported, trains are more efficient than trucks or aircraft. The market for everything from locomotive to railroad cars to high-speed trains is growing as well as the infrastructure. The rail industry is ripe with cable assembly opportunities including high-voltage assemblies for the drive systems and communications between cars and signaling and control systems on the railway routes.
  • The falling price of oil (and fuels) should lead to higher profits for service providers using transportation equipment (trains, planes, and trucks). The increasing profitability of the service providers may lead to additional equipment purchases.
  • Ship building should be on the rise. With the economies in the US and Europe improving, exports and imports are picking up. Although there was a glut of all types of ships, these resources are now being utilized, so we should see business increasing, particularly for ship builders in China and South Korea.

Bishop & Associates estimates the worldwide market for transportation cable assemblies will grow 5.3% in 2015. At 10.3% year-over-year growth, China will be the fastest-growing region in 2015 for this market sector.

For more detailed information and sales forecasts for the transportation and harsh environment connector markets, see our research reports  World Automotive Connector Market and Harsh Environment Connectors and Markets 2015.

No part of this article may be used without the permission of Bishop & Associates Inc. If you would like to receive additional news about the connector industry, sign-up here. You may also contact us at bishop@bishopinc.com or call 630.443.2702.

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Dave Pheteplace

Dave Pheteplace

SVP and Managing Director Cable Assembly at Bishop & Associates Inc.
David Pheteplace joined Bishop & Associates Inc. in 2008, and was appointed vice president in September 2011. He is also the managing director of Bishop’s cable assembly division, which he established in 2008. Pheteplace has more than 30 years of experience in the interconnect industry, including managing divisions of Amphenol, Cinch, and Robinson Nugent.
Dave Pheteplace

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