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PVC materials segment of automotive wire and cables market could lose share to XLPE and PPE

Asia is the most attractive region for automotive wire and cable manufacturers

From engines to transmission systems to lights and braking systems, none of the functions of a modern automobile would be conceivable in the absence of wires and cables. The global automotive wire and cables market is a consolidated one with the five leading companies holding sway over nearly 60% of the global market share. The largest manufacturers of automotive wire and cables are based in Asia, and continue to pump in investment dollars to expand their footprint across this region encouraged greatly by the vigorous automobile industry.

The leading companies in the global automotive wire and cables market are: Sumitomo Electric Industry, Leoni AG, Yazaki Corporation, Lear Corporation, and Coficab Tunisie SA. However, it is important to note that wiring harness manufacturers are typically regarded as being different from wire and cable manufacturers as these entities operate in different positions in the value chain. But of course, given the nature of products they deal in, their operations are likely to overlap at some point.

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EVs and Hybrid Cars Could Infuse Innovation in the Automotive Wire and Cables Market

An emerging trend that will likely have a far-reaching effect on the automotive wire and cables market is the promotion of EVs and hybrid cars in the U.S. and China. As compared to a gasoline- or diesel-based vehicle, the amount of wires and cables required in an electric vehicle of the same size is higher. Companies are positioning EVs, hybrid vehicles, and even autonomous vehicles as sophisticated products and makers of automotive wire and cables will have to align their products with this change.

Cables are composed of individual, insulated wires that are jacketed together in a protective, non-conductive covering. The use of automotive wire and cables has seen an upward growth graph in the automobile industry through the last few decades, especially so in the recent years with the increased integration of electronics in vehicles.

The demand for automotive wire and cables is determined by the prevailing state of the global automobile industry. The higher the demand for vehicles-both commercial and passenger-the better will be the growth prospects of the automotive wire and cables market. With a revival in the U.S. economy and the spike in car ownership numbers in leading Asian markets, the amount of wire and cables used per car is poised to grow further. Players in this market are required to be responsive to the latest vehicular technologies, developing wire and cables to new industry specifications.

PVC and XLPE Wires and Cables Occupy Predominant Share of Market

The global automotive wire and cables market can be classed on the basis of materials as: PVC, PPE, TPU, XLPE, and others (silicone and EBR). In 2012, the use of PVC wire and cable insulation materials was seen to be the highest globally at nearly 60%. In the same year, the XLPE segment came a distant second with about a quarter of the total market share. While PVC has traditionally been the material of choice in the automotive wire and cables market, this material is losing market share on account of its toxic effects and difficulty in recycling. The PVC market will likely relinquish a portion of its market share to other insulating materials such as XLPE and PPE.

However, during the next few years, if bio-based plasticizers for PVC automotive wire and cables are successfully commercialized – and if they are adopted widely by vehicle makers – the PVC segment could fare well. Bio plasticizers reportedly bring down the toxicity of PVC by up to 40% as compared to those manufactured using phthalates.

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