Asian Car Makers Sticking With Steel For Now

 

leaf-productionWith Ford leading the way, American car manufacturers are rushing ahead with plans to make their cars and trucks lighter by using more aluminum. Lighter cars are more fuel efficient, an important consideration for meeting the US government goal of 52.5 mpg in coming years. So why are Asian car manufacturers bucking the trend toward aluminum and sticking with good old steel? Several reasons, actually.

Reuters reports there are numerous reasons, but they can be boiled down to;

  • Aluminum costs up to 4 times more than steel.
  • Using aluminum requires extensive and expensive retooling of existing assembly lines.
  • Asian companies often build multiple models on the same assembly line. Switching to aluminum for one model means making the change for all models built on that line.
  • For Hyundai and Kia in particular, both are corporate cousins of Hyundai Steel Co. Internal considerations dictate that Hyundais and Kias be built with steel supplied by Hyundai Steel, not aluminum from someplace else.

Novelis Corp. is the biggest maker of flat-rolled aluminium in the world. It predicts a 70% increase in the use of aluminum by Asian manufacturers in the next two years but a 500% increase by North American car companies. According to IHS Automotive, Asia is expected to account for only 10% of the aluminum used in car manufacturing in 2016 as compared to 45% in North America and 45% in Europe. This, in spite of the fact that Asia accounts for almost half of worldwide total vehicle production.

A lot of that discrepancy can be traced to the fact that many cars for Asian markets are smaller than their American and European cousins, and so are lighter to begin with. Also, fuel economy standards in many Asian countries are far less stringent than in the US and Europe. China in particular is just starting to impose pollution controls, safety standards and gas mileage requirements on cars sold there.

Steel makers like Hyundai are working hard to meet the challenge from aluminum by creating new steel products that are stronger and lighter than traditional steel. With most of the world’s steel now being produced in Asia, vehicle manufacturers have ready access to plenty of low priced steel and see little need to retool for aluminum, even for their top of the line cars. Even so, aluminum seems to be the way forward in America, though it is by no means a forgone conclusion that aluminum will ultimately trump steel in the automotive world.

Steve Hanley

Closely following the transition from internal combustion to electricity. Whether it's cars, trucks, ships, or airplanes, sustainability is the key. Please follow me on Google + and Twitter.