What Is the 'Wiring Harness' That Stopped the Korean Car Industry?

[Asia Economy Reporter Suyeon Woo] Due to the impact of the novel coronavirus infection (Wuhan pneumonia), the supply of Chinese-made parts has become difficult, causing the entire Korean automobile industry to come to a halt. The part experiencing supply disruptions is a component unfamiliar to the general public called the 'wiring harness.'

The 'wiring harness' is a labor-intensive part with an individual unit price of only a few hundred thousand won. Since it is a component that combines each wire by vehicle model to create thousands or tens of thousands of wiring bundles, manual labor is absolutely necessary.

The wiring harness refers to a bundle of wires and signal devices that supply power and control signals to various devices and parts of a vehicle. It can be considered a kind of vehicle's blood vessels or nervous system. For this reason, during the assembly process, it is laid under the vehicle body from the initial stages, connecting various parts.

While all automobile parts are important, the wiring harness is required in the earliest process, so if the wiring that connects the parts is not laid, the process cannot even begin. Recently, as electric vehicles and autonomous vehicles have become equipped with various complex sensors and vehicle structures have diversified, the product range of wiring harnesses is also becoming more varied.

Because wires must be combined according to various vehicle models and twisted, bundled, and bent to fit the shape of the vehicle body, automation is still difficult, and manual labor is required. Due to the need for various combinations and the large volume, it is also not easy to stockpile inventory for more than one to two weeks in advance.

Although domestic parts manufacturers such as Kyungshin, Yura Corporation, and THN have succeeded in technology localization, production is mainly carried out in China due to the high labor costs of this labor-intensive part. According to the Korea International Trade Association, last year, Korea's wiring harness imports amounted to $1.97 billion, of which 87% were imported from China.

Expanding the scope to all imported items, last year Korea's imports from China totaled $107.22 billion, accounting for 21.3% of Korea's total imports. Since 2007, China has surpassed Japan and maintained its position as the top import source.

The reason for the increase in imports from China is that many domestic manufacturers, including automobile parts factories, have relocated their production plants to China, where labor costs are low, over the past several years. Therefore, when supply issues arise in specific countries, such as the recent novel coronavirus outbreak in China or last year's export restrictions by Japan, companies that import materials and parts and produce domestically inevitably face production disruptions.

Therefore, experts unanimously emphasize the need to continuously diversify parts supply sources. They point out that the supply sources of parts and materials, currently concentrated in neighboring countries such as China and Japan, should be diversified to Southeast Asia, Russia, and other regions.

An industry official said, "Even if the supply source of small parts like wiring harnesses, which are entirely dependent on China, is changed to Southeast Asia, the impact on the final consumer price will be minimal," adding, "Companies must strive to discover various supply sources beyond the purchasing sources they have conventionally chosen out of inertia."

This content was produced with the assistance of AI translation services.