Market Trends of Global Relay Industry
This section covers the major market trends shaping the Relay Market according to our research experts:
Growing Adoption of Relays in Automotive Industry
- The automotive industry is transitioning from hardware- to software-enabled vehicles, and the average software and electronics content per vehicle is increasing rapidly. Electronics often enable the integration of new functions and features into the car. Thus, electronics is increasing penetration into major applications, including powertrain, safety management, body, and convenience or infotainment.
- In addition, passenger safety is another factor driving the adoption of automated automobile systems. The installation of safety features and systems in vehicles has greatly aided in reducing the number of accidents and fatalities on the road over the past few decades.
- The rapidly growing use of electric components in current and upcoming vehicles is consistently propelling the need for manufacturing reliable and standardized components for efficient, safe, and secure switching of electric loads. These factors are currently driving the market growth.
- The relays for automotive applications are engineered for direct current (DC) voltages in passenger comfort and infotainment systems and managing power levels in harsh environments. The relays are utilized in almost all harnesses and box modules throughout a vehicle, comprising the car's rear and front area, body control, passenger and engine areas, powertrain, and door, seat, roof, and fan modules.
- Additionally, the demand for advanced relays with lightweight and high-performance characteristics is compelling manufacturers to invest in producing more solid-state relays, compared to traditional heavy electromechanical relays, owing to the growing demand for hybrid and electric vehicles around the world. This, in turn, will boost market growth in the future.
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Asia-Pacific to Register a Significant Market Share During the Forecast Period
- Asia-Pacific is anticipated to hold a substantial market share during the forecast period. The growth of the relay market in the Asia Pacific is owing to the rising renewable energy capacity addition. Also, the increased grid infrastructure activities and emphasis on substation automation under IEC 61850 standard are anticipated to propel the market in the Asia Pacific during the forecast period.
- The advent of renewable energy generation across the region provides opportunities for relay manufacturers as it is utilized for many applications, such as offering a very big contact gap, powerful switching competencies, and many others in this sector. Apart from this, the government and various regional companies have invested strongly in developing this sector.
- Further, the Chinese government's programs, such as the Made in China 2025 plan, promote the use of R&D in factory automation and technologies and its investments. Also, as most of the automation equipment is imported from Germany and Japan, the 'Made in China' initiative aims to expand the country's domestic production of automation hardware and equipment. Initiatives by the government in the automation sector will drive the studied market.
- Moreover, increasing investments, manufacturing capacity, and sales of automotive vehicles considerably will drive the relay market shortly. In addition, stricter emission regulations by governments are propelling automakers across the region to invest in electric vehicles. Various automakers are therefore significantly investing in developing and launching new electric vehicles. For instance, in December 2021, South Korea's Hyundai Motor Co unveiled its plan to invest 40 billion rupees (USD 530 million) in launching six electric vehicles in India by 2028. The rising investment in electric vehicles is expected to further boost the demand for relays.
- Furthermore, in February 2022, Hyundai Mobis, the auto parts producing unit of Hyundai Motor Group, unveiled its plan to spend up to USD 6.72 billion in the next three years to strengthen auto chips, mobility, and other fields as its future growth drivers.
- Thus, owing to the factors mentioned above, the revenue share from the Asia Pacific is anticipated to grow faster than the other geographical regions during the forecast period.
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