The global new energy vehicle (NEV) industry is undergoing rapid transformation, and China, with its breakthroughs in electrification and intelligent technologies, has become a focal point for both domestic and international companies competing for market share and technological leadership.

According to International Cable & Connector magazine, several major foreign companies are heavily investing in the automotive connector market. These include global giants such as TE Connectivity, Aptiv, Molex, Phoenix Contact, Rosenberger, and Yazaki. Leveraging decades of technological expertise, these companies have secured significant positions in the high-voltage and high-speed connector sectors.

For TE Connectivity, the Chinese market is a critical growth engine, particularly with the growing demand in the electric vehicle (EV) and intelligent driving fields. TE’s 2024 fiscal year report highlights a 3% organic growth in its automotive business, driven by strong demand in the Asian market.

Aptiv, on the other hand, considers China an essential market to dominate. In 2024, the company reported $19.7 billion in global sales, with net sales from the Asia-Pacific region accounting for 29%, and China representing a core market. Aptiv’s announcement to spin off its Electronics and Safety (EDS) business was also notable. Despite significant sales, this segment had a profit margin of only 8%. The spinoff reflects the growing pains that traditional businesses face in adapting to the intelligent transformation, as competition from local Chinese wire harness manufacturers like Luxshare Precision and Hubei Huagong increases.

Additionally, the survival crisis faced by the traditional internal combustion engine (ICE) vehicle supply chain is becoming more apparent. Yazaki recently closed its Shantou plant and formed a joint venture with Alte, aiming to regain competitiveness in the power battery and charging/distribution systems for NEVs.

While the pressure on traditional automakers and suppliers is mounting, the Chinese market is also presenting significant opportunities for local manufacturers. Domestic players are finding crucial openings in the ongoing technological iterations and the wave of import substitution. Aptiv’s annual report specifically notes that competition is intensifying in the Chinese market, with both domestic and international manufacturers, particularly local OEMs, rapidly increasing their market share, posing challenges to their business operations.

In the first half of 2024, many domestic connector companies posted impressive growth in the automotive sector. For instance, E-Connect’s automotive connector revenue surged by 90.28%, while Luxshare Precision saw a 48.3% growth in its automotive connectivity products, with revenues reaching 4.756 billion yuan. These growth rates significantly outpaced those of international veteran companies, reflecting the local players’ growing technological prowess.

The increasingly competitive landscape for NEVs, however, has also created substantial development opportunities for domestic small- and medium-sized connector manufacturers. For example, Wenda Electronics, which saw a 30% growth in the past year, remains optimistic about the potential of the NEV market. According to Wenda Electronics’ General Manager Zhou Jianshun, the market’s overall growth ensures that local companies will not face significant pressure on survival.

Zhou believes that while foreign companies are gradually expanding their production capacity, local firms are confident due to the growing market demand, especially in high-voltage and intelligent upgrades for NEVs, which present a vast opportunity.

However, Zhou also acknowledges the gap between domestic and foreign firms in terms of R&D capabilities and brand influence. Foreign companies have clear advantages in technology accumulation, talent reserves, and extensive experience in dealing with large customers. Furthermore, international brands enjoy long-term customer trust, particularly in high-end markets.

Despite these challenges, Zhou highlights the advantages of local companies under the current trend toward domestic supply chain localization. As Chinese OEMs increasingly prioritize domestic sourcing, local companies are well-positioned to seize opportunities. By adopting differentiated competitive strategies, domestic firms can offer the same quality products at lower costs, superior service, and quicker response times, tailored to the local market’s needs.

As the NEV industry continues to evolve, the competition in the automotive connector market is intensifying. However, China’s domestic manufacturers are gaining ground, leveraging local market advantages and capitalizing on the rapid shift to electrification and intelligent technologies. The next few years will undoubtedly be pivotal for the global connector market, as China’s role continues to grow in importance and influence.