Introduction

The global new energy vehicle (NEV) industry is undergoing rapid transformation, with China emerging as a key battleground for both domestic and international manufacturers. Leveraging breakthroughs in electrification and smart vehicle technologies, China has become the focal point of competition in automotive connectors.

Global Automotive Connector Leaders and Their Strategies

According to International Cable & Connectivity magazine, major global companies focusing on automotive connectors include TE Connectivity, Aptiv, Molex, Phoenix Contact, Rosenberger, and Yazaki. These companies, backed by decades of technological expertise, hold a dominant position in the high-voltage and high-speed connector market.

China remains a crucial growth driver for TE Connectivity’s automotive division, particularly in EVs and autonomous driving. TE’s 2024 fiscal report revealed a 3% organic growth in its automotive business, fueled by strong demand in Asia.

For Aptiv, China is an indispensable market. In 2024, the company’s global sales reached $19.7 billion, with 29% of net revenue coming from the Asia-Pacific region, with China playing a core role. Recently, Aptiv announced the spin-off of its Electrical Distribution Systems (EDS) business. Despite its considerable revenue, EDS had a low profit margin of only 8%. This spin-off places the EDS division in direct competition with Chinese wire harness manufacturers like Luxshare Precision and Hu Guang Corporation, highlighting the challenges traditional businesses face amid the wave of automotive intelligence.

Meanwhile, the survival challenges of traditional internal combustion engine (ICE) supply chains are becoming increasingly evident. Yazaki, for instance, closed its Shantou factory and instead partnered with Art New Energy to form a joint venture, aiming to regain competitiveness in battery and charging system solutions.

Opportunities for Domestic Manufacturers

China’s local manufacturers are experiencing a golden opportunity for growth amid technological advancements and import substitution trends. Even Aptiv acknowledged in its annual report that fierce competition from domestic OEMs and suppliers could impact its business.

In the first half of 2024, most Chinese listed connector companies reported double-digit growth in the automotive sector. For example, Deli Technology’s automotive connector revenue surged by 90.28% year-over-year, while Luxshare Precision’s automotive interconnect revenue soared by 48.3% to 4.756 billion RMB, significantly outpacing traditional global players.

Despite the intense competition in the NEV market, key trends such as high-voltage system upgrades, the adoption of 48V architectures, and the implementation of autonomous driving continue to create ample growth opportunities for domestic connector suppliers. Small and mid-sized Chinese firms that have entered the automotive connector market are poised for expansion.

One such company is Wenda Electronics, which recorded a 30% revenue growth last year and remains highly optimistic about the NEV sector. Wenda Electronics’ General Manager, Zhou Jianshun, believes that the competitive landscape remains fair and that overall market growth will prevent significant constraints on domestic enterprises.

“Although foreign companies are gradually expanding their production capacity, local enterprises remain confident,” Zhou stated. “Market demand is continuously increasing, and the push for high-voltage and intelligent upgrades in NEVs is providing substantial growth opportunities.”

Bridging the Gap: Challenges and Competitive Advantages of Chinese Firms

When discussing the differences between domestic and international manufacturers, Zhou highlighted key gaps in research and development (R&D) capabilities and brand influence. Global players benefit from extensive technological accumulation, talent reserves, and long-term collaborations with top-tier clients. Their strong brand reputation and customer trust, particularly in high-end markets, give them a competitive edge.

However, domestic firms have their own advantages. The rising trend of supply chain localization has created opportunities for Chinese manufacturers, as OEMs increasingly prioritize domestic suppliers. By leveraging differentiated competition strategies, local companies can offer equivalent quality at lower costs while providing superior service. Their geographical proximity also allows for quick responsiveness to client needs and customized solutions tailored to the local market.

Conclusion

The automotive connector market is witnessing fierce competition between global giants and domestic challengers. While international firms maintain their lead in technology and branding, Chinese manufacturers are gaining ground through localization, cost advantages, and rapid response capabilities. As the NEV industry continues to expand, domestic suppliers are well-positioned to capture market share and drive further innovation in the sector.