The global automotive relay market size to be valued at USD 19.5 billion by 2025 and is expected to grow at a compound annual growth rate (CAGR) of 5.9% during the forecast period. Electric automotive parts have diversified over the past decade, leading to an increase in the number of relays used as switching devices as well as variation in the required features of each relay. The industry is expected to witness steady growth over the forecast period owing to advancements in miniaturization and high contact capability development to address restrictions in mounting space in the Electric Control Unit (ECU) of vehicles.
Electric automotive parts have diversified, thereby increasing the number of relays used for switching; different features are required for each relay. Further miniaturization and high contact capability development are needed, especially in Electric Control Unit (ECU) where there are restrictions in mounting space due to the presence of a cluster of relays. A high degree of reliability in relays is required from a safety point of view. Components equipped with features such as latching, low noise, and ultra-miniaturization have gained prominence owing to the need for providing switching technology for the latest generation of electronic functions in a car.
The average number of relays installed per vehicle is expected to increase over the forecast period on account of the growing adoption of sophisticated electronics equipment and increased emphasis on safety and security. Switching of supplementary devices required for safety, security, communications, infotainment require additional relays apart from the basic relays used in powertrain systems. Increased developments in PCB relays to decreasing the overall vehicular weight for increasing fuel efficiency is expected to provide a fillip to market growth over the forecast period.
With the transition of the automotive industry from hardware to software-oriented vehicles, the average number of software and electronics per vehicle is rising rapidly. New features are integrated into vehicles using electronic devices with a wide range of application areas such as safety management, powertrain, comfort, and infotainment which employ the use of automotive relays. This is expected to boost the demand in the market during the forecast period.
Passenger safety is another important factor to drive the adoption of automated systems in automobiles. Safety features in vehicles have contributed remarkably to reduce road accidents and fatalities over the last few decades. Also, the automotive industry is working to transform the driving experience of consumers. Smarter cars capable of performing self-diagnosis are gaining popularity and are anticipated to augment the growth of the market during the forecast period.
The lack of standardization, and the presence of highly competitive players in relay manufacturing hinder the growth of the global automotive relay market. During the operation of an automotive relay, large amounts of heat are generated, and other factors such as durability limitations, and switching noise are expected to hamper the growth of the market.
The growing demand for hybrid and electric vehicles with advanced, lightweight, and high-performance relays, is compelling manufacturers to invest in solid-state relays compared to traditional large electromechanical relays. Thus, this is anticipated to act as an opportunity for the market to grow.
PCB relay is estimated to have the largest share in this market. It's used in a majority of electronic applications such as ABS, cruise control, doors, power steering, power windows, and sunroof. In regions such as Europe and North America, they are used majorly. However, in regions such as Asia-Oceania and RoW, Tier-1 manufacturers and OEMs still prefer plug-in versions.
Plug-in relays are used where the switching operation is performed under extreme vibrations, temperatures, and voltage fluctuations. They are used in fuel injection systems, heating control, and air-conditioning (HVAC) systems, and switching fuel pumps. The demand for these components is more, owing to their compact size that saves considerable space in the junction box. This phenomenon, in turn, helps in reducing the overall weight of the junction box. Increasing electronic control modules coupled with electronic components have generated the demand for smaller devices that are capable of carrying greater current loads.
High voltage relays are also estimated to increase in the future as they have many applications in electric and hybrid electric vehicles. Automotive manufacturers and OEMs integrate the relays in the vehicle’s circuit, based on the respective applications. They form tie-ups and alliances with service centers to ensure proper maintenance and replacement of components
The global passenger vehicle automotive relay market was valued over USD 6 billion in 2016. Many governments provide lucrative offers to promote the selling and usage of EVs. A positive factor responsible for the growth of the segment is the increasing demand for electronic e-fuse over the electromagnetic alternative due to the modernization of vehicles
Many European countries follow incentive-based programs for promoting EVs. Countries, like Germany and Austria, offer tax exemptions and reductions. France and the UK offered bonus payments to EV buyers and discounts on insurance. The electric vehicles segment is estimated to witness the highest growth as compared to other segments over the forecast period. Many governments provide lucrative offers to promote the selling and usage of EVs. Tax benefits are provided at the time of purchase. Further, the extent of the exemption depends on the size of the batteries used in the vehicle.
In the United States, insurance companies are providing discounts on insurance policies to customers, and utility companies are offering low electricity rates. Also, few states offer credits to electric vehicle manufacturers and buyers for their costs and purchase of charging equipment. The Federal Government offers tax credits up to USD 7,500 for Plug-in Electric Vehicles (PEVs).
The capacitive load's segment is estimated to dominate the market in terms of revenue as compared to other segments over the forecast period. Automotive electronics consist of semiconductor devices that are used to do multiple functions in a car. Various safety and comfort systems in a car would not have been possible without electronics. Some of the basic applications in modern cars are driven by electronic systems and these require relay for their efficient operation. These include door lock system, power window, air conditioner, wiper, and fuel injection.
The electronic applications are more in the passenger car segment, as compared to the LCV segment. This is due to the increasing demand for premium cars with advanced features. Modern vehicles feature a multitude of intelligent systems which increase all safety aspects and driving comforts. Navigation systems with interactive traffic condition interfaces have become common even in the mid-sized car segment. Passive and active safety systems such as airbags, belt tensioners, and antiskid brake/traction control, have led to an increase in the average number of relays per vehicle.
In high-spec cars, the value of the electric and electronic component sums up to almost a quarter of the total vehicle value. The wiring length can reach several thousands of meters with as many connection systems between different harnesses, ECU’s and actuators. Reliable switching of lights, motors, heaters, ECUs is critical for the overall reliability of the vehicle
Asia Pacific is a key revenue-generating region and captured a significant market share in 2016. The regional growth is due to the penetration of automobiles in developing economies such as China and the adoption of safety standards is expected to drive the market in several Asian countries. Asia Pacific exhibits a high growth potential, which may be attributed to high vehicle demand in this region. Increasing automobile demand in Asia Pacific, particularly China, and Japan is expected to drive regional market growth over the forecast period.
Growing demand for connectivity and car digitalization will favorably impact market growth over the forecast period. Further, high-growth potential across the compact car segment due to space constraints has also driven the auto wiring harness demand extensively. Stringent government regulations mandating the use of certain electronic safety systems such as the Anti-locking Braking System (ABS) and Electronic Stability Program (ESP) to reduce harmful fuel emissions offer avenues for market growth. In addition, the growing popularity of electric vehicles has also spurred the auto wiring harness market demand.
Europe is also expected to witness substantial growth owing to strong growth across the automotive sector. The leading companies in auto wiring harness market include Delphi Automotive, Sumitomo Electric, Furukawa Electric, Tianjin Jin-Zhu Wiring systems Co. Ltd., Prestolite Electric, Fujikura Ltd., Lear Corporation, and Leoni.
A few of the major industry players include ABB Group, Denso Corporation, Eaton Corporation plc, Fujitsu Limited, Hella KGaA Hueck & Co. (HELLA). The current market environment is witnessing intense competition between the key players for achieving market domination via product differentiation and enhancement of quality. This has resulted in growing market consolidation through strategic initiatives such as alliances, mergers, and acquisitions.
In August 2021, Faurecia, one of the leading automobile companies announced that the company plans to acquire a total of 60% of shares in Hella GmbH & Co. Faurecia and Hella plan to become a global leader in fast-growing automotive technologies and to be fully aligned with the industry megatrends.
Report Attribute |
Details |
Revenue forecast in 2025 |
USD 19.5 billion |
Growth rate |
CAGR of 5.9% from 2018 to 2025 |
Base year for estimation |
2016 |
Forecast period |
2018 - 2025 |
Quantitative units |
Revenue in USD billion and CAGR from 2018 to 2025 |
Report coverage |
Revenue forecast, company ranking, competitive landscape, growth factors, and trends |
Segments covered |
Product, application, vehicle type, and regions |
Regional scope |
North America; Europe; Asia Pacific; South America; MEA |
Country scope |
U.S.; Canada; Mexico; U.K.; Germany; Japan; China; India; Brazil |
Key companies profiled |
ABB Group; American Zettler Inc. (subsidiary of Zettler Components, Inc.); Beta Electric Industry Co. Ltd.; Coto Technology; Crydom (A subsidiary of Sensata Technologies Holdings N.V); Deltrol Controls (A subsidiary of Deltrol Corporation); Denso Corporation; Eaton Corporation plc; Fujitsu Limited; Good Sky Electric Co., Ltd.; IDEC Corporation; Hella KGaA Hueck & Co. (HELLA); Littelfuse Inc.; LS Automotive Corporation; Megatone Electronics Corp. |
Customization scope |
Free report customization (equivalent to up to 8 analysts working days) with purchase. Addition or alteration to country; regional & segment scope. |
Pricing and purchase options |
Avail customized purchase options to meet your exact research needs. Explore purchase options |
This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest trends and opportunities in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the automotive relay market into product, vehicle type, applications, and region:
Product Outlook (Revenue, USD Million; 2014 - 2025)
PCB Relay
Plug-in Relay
High Voltage Relay
Others
Vehicle Type Outlook (Revenue, USD Million; 2014 - 2025)
Passenger vehicles
Commercial vehicles
Electric vehicles
Application Outlook (Revenue, USD Million; 2014 - 2025)
Resistive loads
Capacitive loads
Inductive loads
Regional Outlook (Revenue, USD Million; 2014 - 2025)
North America
U.S.
Canada
Mexico
Europe
Germany
UK
Asia Pacific
China
India
Japan
South America
Brazil
Middle East and Africa (MEA)
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The automotive & transportation industry is amongst the most exposed verticals to the ongoing COVID-19 outbreak and is currently amidst unprecedented uncertainty. COVID-19 is expected to have a significant impact on the supply chain and product demand in the automotive sector. The industry's concern has moved on from being centered on supply chain disruption from China to the overall slump in demand for automotive products. The demand for commercial vehicles is expected to plummet with the shutdown of all non-essential services. Furthermore, changes in consumer buying behavior owing to uncertainty surrounding the pandemic may have serious implications on the near future growth of the industry. Meanwhile, liquidity shortfall and cash crunch have already impacted the sales of fleet operators, which is further expected to widen over the next few months. We are continuously monitoring the COVID-19 pandemic, and assessing its impact on the growth of the automotive & transportation industry. The report will account for Covid19 as a key market contributor.
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