Market evolution: Automotive relays (CN 85364190) — 2015–2025

Introduction

Customs code 85364190 covers relays for a voltage ≤ 60 V and a current > 2 A — components widely used in automotive, industrial control, and consumer electronics applications. Over the period 2015–2025, the EU's trade in these relays underwent a marked transformation. While the overall market expanded — with both exports and imports growing in value — imports rose considerably faster than exports (+51.8% vs. +29.5%), eroding the EU's initial trade surplus and pushing the balance into deficit by 2025. At the same time, the EU's domestic production volumes collapsed even as production value rose — pointing to a structural shift toward higher-value manufacturing. This report analyses the main dynamics behind these trends, focusing on the trade balance reversal, the geographic reorientation of supply chains, and the transformation of the EU's production base.

1. From Trade Surplus to Structural Deficit: The Widening Import-Export Gap

Imports have grown at nearly twice the pace of exports

Over the full period, EU imports of relays rose from €315.3 million to €478.7 million (+51.8%), while exports grew from €364.1 million to €471.5 million (+29.5%). Import volumes expanded from 9,103 tonnes to 12,084 tonnes (+32.7%), whereas export volumes barely moved — from 8,476 tonnes to 8,628 tonnes (+1.8%). This divergence indicates that the EU's appetite for relays increasingly outpaced its ability — or willingness — to supply them domestically or through exports.

Unit prices tell a more nuanced story

Export unit values rose from €42,925/t to €54,620/t (+27.2%), while import prices increased more modestly from €34,627/t to €39,598/t (+14.4%). The persistent price gap — EU exports command a roughly 38% premium over imports — suggests that the EU retains competitive strength in higher-specification or higher-value-added relays, even as it has lost ground in volume terms. The faster rise in export prices may also reflect currency effects, input-cost inflation, or a strategic shift by European manufacturers toward more specialised products.

The balance swung from surplus to deficit — with a deep trough in between

The EU began the period with a comfortable surplus of €48.8 million (2015). By 2025, that surplus had become a deficit of €7.1 million. The trough was far deeper: the trade balance reached a minimum of −€129.1 million at some point during the period, before partially recovering. This pattern is consistent with the supply-chain disruptions of 2020–2022 (COVID-19, semiconductor shortages), which likely compressed exports while import demand remained elevated, and with the post-2022 normalisation as some trade flows recovered.

2. Shifting Supply Chains: Geographic Reorientation and New Vulnerabilities

China consolidated its position as the dominant import source

China was already the EU's largest relay supplier in 2015 at €132.7 million, and by 2025 it had grown to €211.0 million (+59.0%), peaking at €275.5 million along the way. China alone accounts for nearly 44% of the latest import value among the top partners. Japan, the second-largest supplier, also grew strongly (€44.1M → €69.1M, +56.7%). Together, Asian suppliers dominate EU imports, reflecting the region's central role in relay manufacturing for the automotive and electronics industries.

The Philippines collapsed as a supply source

EU imports from the Philippines fell from €41.2 million to €18.4 million (−55.4%), making it the most notable decline among major partners. A price shock was detected in 2022 (abnormality 14.3), coinciding with broader supply-chain disruptions in Southeast Asia. The decline may also reflect production relocations within the global automotive supply chain, with capacity shifting to other Asian or North African locations.

Nearshoring gains are visible in Morocco, Tunisia, and Türkiye

EU exports to Morocco surged from €30.4 million to €69.7 million (+129.0%), making Morocco the fastest-growing major destination and now the largest single export market for EU relays. Exports to Tunisia more than tripled (€5.0M → €15.9M, +220.2%), and exports to Türkiye grew by 42.3% (€15.5M → €22.1M). These three countries — all positioned as nearshore manufacturing platforms for European automotive OEMs and Tier-1 suppliers — have absorbed a growing share of EU relay exports, consistent with the broader nearshoring trend in European automotive supply chains. Notably, Tunisia also appears as a growing import source (€3.7M → €10.2M, +175.9%), suggesting the emergence of a two-way trade corridor.

Russia was effectively eliminated as a trade partner

EU exports to Russia collapsed from €13.3 million to near zero (€1,218) — a −100% decline. A supply shock was detected in 2024 with an abnormality of 2.8. This is a direct consequence of the EU sanctions imposed following Russia's invasion of Ukraine in 2022, which progressively restricted the export of dual-use and industrial goods. The complete elimination of this market represents a permanent loss of €13 million in annual export revenue.

EU import concentration is moderate and relatively stable, while exports remain well diversified

The Herfindahl-Hirschman Index (HHI) for import value stood at 2,240 in 2015 and ended at 2,306 in 2025 (+3.0%), indicating moderate concentration that is broadly stable. The import volume HHI, however, rose more steeply (+25.0%), suggesting that physical supply has become more concentrated — a potential source of vulnerability. On the export side, the value HHI fell from 813 to 777 (−4.4%), confirming that EU exports are well diversified across partners. Among the top EU reporters, Germany remains the dominant actor on both the import (€206M → €181M) and export (€150M → €167M) sides, while the Netherlands emerged as a major import hub (+571.6% to €148M) — likely reflecting its role as a logistics gateway.

3. Fewer Units, Higher Value: The EU's Structural Production Transformation

Domestic relay production volumes have halved — but the value of output has risen

Perhaps the most striking structural development is the divergence between EU production volumes and values. Production quantity fell from 400 million items to approximately 171 million items (−57.3%), while production value rose from €300 million to €404 million (+34.6%). This implies that the average unit value of an EU-manufactured relay roughly tripled over the period — from approximately €0.75 to €2.36 per item. The EU is producing far fewer relays, but the ones it does make are substantially more valuable.

This pattern is consistent with a structural upgrade in the EU relay industry: European manufacturers appear to be exiting the high-volume, low-margin segment (where Asian competitors dominate on cost) and concentrating on higher-specification relays — potentially those designed for automotive safety systems, EV powertrains, or industrial automation, where reliability requirements and regulatory standards create barriers to entry.

Specialisation is concentrated in a handful of Western and Southern European economies

Using the Revealed Symmetric Comparative Advantage (RSCA) as a measure of specialisation, the most specialised EU producers in 2025 are:

Germany and France together account for over half of EU production value, but Portugal and Romania also display strong comparative advantages, suggesting that some production has migrated to lower-cost EU member states while retaining EU-based supply chain proximity. At the other end of the spectrum, Greece (RSCA −0.96), Ireland (−0.95), and Luxembourg (−0.94) show no meaningful specialisation in this product.

Trade intensity and export propensity have both surged — but from different bases

The EU's trade intensity (total trade as a share of apparent consumption) rose from 74.4% to 107.1% (+44.0%), while export propensity (exports as a share of production) surged from 61.5% to 114.8% (+86.8%). A trade intensity above 100% indicates that total trade (imports + exports) exceeds domestic production — a hallmark of a highly integrated, cross-border supply chain where components are imported, processed, and re-exported. The even faster growth of export propensity suggests that EU-based producers have become increasingly outward-oriented, with more than their entire domestic output now being exported (supplemented by imported components re-exported after assembly or integration).

Conclusion

The EU market for automotive relays (CN 85364190) between 2015 and 2025 underwent three simultaneous transformations. First, the trade balance eroded from a €48.8 million surplus to a slight deficit, as imports (+51.8%) significantly outpaced exports (+29.5%) in value growth. Second, the geographic map of trade was redrawn: China consolidated its dominance as the primary import source, nearshoring destinations like Morocco and Tunisia absorbed a growing share of EU exports, and Russia was entirely eliminated as a trade partner due to sanctions. Third, the EU's production base contracted sharply in volume terms (−57.3% in item count) while increasing in value (+34.6%), indicating a decisive move up the value chain toward higher-specification relays.

These dynamics are interconnected. The decline in low-cost domestic production is being offset by increased imports — primarily from Asia — while EU manufacturers focus on higher-margin segments where they retain a comparative advantage. The growing role of Morocco, Tunisia, and Türkiye as export destinations reflects the nearshoring strategies of European automotive companies seeking to balance cost efficiency with supply-chain resilience. Meanwhile, the elimination of Russian trade and the consolidation of import supply chains around a few Asian sources introduce new concentration risks that European policymakers and industry actors will need to monitor carefully.

Overall, the EU relay market has become more trade-intensive, more geographically reoriented, and more specialised in high-value production — trends that mirror broader shifts in the European electrical components and automotive supply chains.