Harmontronics: Striving to Be a Pioneer in the Intelligent Driving Revolution

By Wang Mopujia

As the era of intelligent vehicles unfolds, every hardware component in automobiles faces opportunities for upgrading. How can enterprises ride the wave of intelligent vehicle development? How to enhance product competitiveness through digitalization and intelligence? How to avoid internal competition and steadily expand into the vast global intelligent driving market?

Recently, the research team of Shanghai Securities News visited Harmontronics on site to analyze the companys opportunities and challenges in this new era, explore its growth drivers and technological moat, and unveil its latest layout in the global intelligent manufacturing market.

“Harmontronics aims to scale up and strengthen its automotive electronics equipment business,” said Cai Changwei, Chairman of Harmontronics, in an interview with Shanghai Securities News. The company will focus on its core business, refine its market positioning, and evolve into an industry leader in its niche segment.

Embracing the New Wave of Intelligent Driving

Within Harmontronics' headquarters campus, advanced automated production lines and precision R&D equipment are neatly arranged. Staff members work busily and orderly, building a new blueprint for intelligent automotive component manufacturing.

“The era of intelligent vehicles has arrived. In the future, new manufacturing equipment will be required for updating emerging hardware such as radars, high-speed wiring harnesses, cameras and controllers in vehicles. Harmontronics is actively preparing for massive market demand,” Cai Changwei stated.

Harmontronics has long focused on intelligent automotive component manufacturing. It has expanded its businesses including automated production lines for intelligent vehicle cameras, LiDARs, various sensors and flat wire motors, and holds a leading position in automated production lines for high-speed wire harnesses and connectors.

“This is an automotive high-speed transmission wiring harness, functioning as the nervous system of intelligent vehicles,” said Hu Shusheng, General Manager of Harmontronics Marketing Center, holding two black wire harnesses. Realization of intelligent driving relies on real-time transmission of massive data, and these wire harnesses are critical for data transfer. “Brands such as Volkswagen plan to equip each vehicle with over 70 high-speed transmission wire harnesses, representing enormous market potential.”

“With the surging global number of intelligent vehicles and strong demand for high-speed wire harnesses per vehicle, the market scale is immeasurable,” Hu Shusheng added. Downstream clients increasingly require higher efficiency for high-speed wire harness production equipment, expecting greater output per unit time, which creates new growth opportunities for the company.

“The intelligent driving revolution brings both opportunities and challenges to Harmontronics,” Cai Changwei noted. The company will keep pace with the times, innovate proactively and respond flexibly to market changes. Its strategy centers on focusing on core tracks, deepening strengths in automotive equipment, and upgrading technologies continuously. Meanwhile, it will strategically adjust its new energy business to cut losses timely, ensuring new orders generate positive profits and cash flow.

Consolidating the Technological Moat

In Harmontronics' assembly workshop, production equipment for modules, connectors, wiring harnesses and sensors operates efficiently. After precise commissioning, equipment is disassembled and shipped in a streamlined and well organized process.

“Seizing the window of digital and intelligent transformation in the manufacturing industry, Harmontronics has comprehensively optimized business processes and reshaped its operational system via industrial internet modules including data collection, cleaning, transmission, storage, analysis, prediction and visualization, driving standardization and platformization of products and business models,” Cai Changwei explained. This has improved operational efficiency and accelerated intelligent manufacturing.

“Harmontronics manufactures each piece of equipment with 80% standardization and 20% customization,” Cai Changwei said. Standardization and platformization effectively reduce equipment production costs and boost unit profit margins.

Driven by the trend of electrification, intelligence, connectivity and sharing in the automotive industry, rapid iteration of new products and processes raises higher requirements for technical capabilities across the automotive manufacturing chain. “For instance, board end connectors in automobiles look ordinary but demand extremely high production speed and precision. Key parameters such as bending positions require rigorous inspection,” Hu Shusheng pointed to a rectangular component.

Facing new trends and requirements, Harmontronics continuously enhances its core strengths. In H1 2024, the company completed the development and production of the GemNet 90° and 180° projects, with GemNet 90° delivered to customers. “During R&D, our team overcame signal attenuation and interference issues of high-speed transmission wire harnesses to improve transmission efficiency and reliability, ultimately developing high performance new products,” a senior R&D manager of Harmontronics introduced.

The GemNet 90° and 180° projects exemplify Harmontronics' increased investment in R&D. In recent years, the company has ramped up investment in new technologies and products, overcoming multiple technical bottlenecks and industry pain points. Since its IPO in 2019, annual R&D spending has risen from nearly RMB 30 million to RMB 96 million. The company has built up 15 core technologies and obtained over 600 patents and software copyrights.

“Through standardization and platformization of core process equipment, as well as production technology innovation and process iteration, Harmontronics has accumulated extensive industry experience and technological assets, continuously consolidating its market position and technological barriers,” Cai Changwei stated.

Accelerating Global Expansion for New Layouts

“This piece of equipment will be exported to Mexico to the world's largest component manufacturer in its niche segment. They impose strict product requirements, and our technological level for this production line is close to global leading standards,” Hu Shusheng proudly pointed to a nearby silver gray automated equipment.

“In H1 2024, overseas orders for Harmontronics' automotive equipment accounted for more than half of total automotive equipment orders,” Hu Shusheng revealed. The company's business covers over 20 countries worldwide, with subsidiaries and branches established in Europe, America, Southeast Asia, Africa and other regions.

The partner list in Harmontronics' exhibition hall features well known domestic and international enterprises including Aptiv, Mahle and Sunwoda. In the field of automotive intelligent manufacturing, Harmontronics cooperates with global top tier automotive component suppliers such as TE Connectivity, Continental, Bosch, Molex and Denso. Its connector clients include TE Connectivity, Molex and Yazaki, while new energy partners include Panasonic and CATL.

Why can Harmontronics cooperate with numerous renowned enterprises? Hu Shusheng gave the answer: “Foreign competitors take 8 months to manufacture equipment that Harmontronics can deliver in 3 months, at 20%–30% lower prices with higher production efficiency.”

“The unique advantage of Harmontronics equipment lies in achieving maximum output with minimal floor space. Our fully automated production lines deliver efficiency equivalent to multiple manual lines,” Hu Shusheng further explained.

“In terms of efficiency improvement, Harmontronics boosts re wiring capacity through standardization, shortening customer delivery cycles and enhancing their productivity. For quality assurance, we have built an end to end quality control system to fully meet customer requirements on product functions and performance. For cost control, standardization of products, processes and operations shortens delivery cycles and cuts production costs,” Cai Changwei summarized.

Looking ahead, Cai Changwei said Harmontronics will leverage its strengths to explore high quality customers at home and abroad. The company plans to expand further into international markets including North America and Europe, while consolidating domestic clients, gradually realizing dual driven growth from domestic and overseas markets.