Automotive Aluminum Market Set for Rapid Growth and Trend by 2025

Aluminum is found in nature in the form of aluminum sulfates and can also be produced from bauxite, which comprises various elements such as aluminum hydroxide, silicon, titanium, sulfur, gallium, vanadium oxides, chromium, iron, sulfuric calcium, and magnesium carbonates, among others. Aluminum is significantly lighter than steel, has good tensile strength, and is easier to mold, making it a preferred choice in various industries. Aluminum was first used in a sports car back in 1899, two years later an engine with aluminum parts was first built. Ever since, aluminum has been used by automotive manufacturers, owing to the inexpensiveness application in mass- produced vehicles. Vehicles manufactured using advanced aluminum alloys are more fuel efficient and reduce carbon emissions, making it more environment-friendly as compared to vehicles manufactured using steel. It also increases performance of the vehicle and improves durability. Aluminum is versatile in nature, which enables automobile manufacturers to combine it with other metals or with materials such as fiberglass and plastics to enhance specific properties. Also, aluminum has the capacity to absorb twice the crash energy as compared to mild steel, which makes it safer.

Automotive manufacturers are focusing on improving performance, fuel economy and reducing emissions, without affecting the size, safety, and capability, a factor that has led to significant growth of the automotive aluminum market.

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Aluminum castings are used in various parts of automobiles such as alternator housing, carburetors, wheels, valve covers, engine block, transmission housings, wheel spacer, impellers, and fan clutch. Aluminum sheets are used in complete vehicle body, structural components, car trims and sealing, body panels, side walls, hood, doors, and trunks. Extruded aluminum is used to manufacture roof rails and sunroofs. The use of aluminum in automobiles has provided numerous benefits such as good formability, great potential in weight reduction, excellent corrosion behavior in presence of thermal load, high yield strength, and dent resistance capability, high-quality surface finish and recyclability. Original equipment manufacturers contribute a major share in the automotive aluminum market.

Automotive Aluminum Market Outlook – Rising demand for lightweight and fuel efficient automobiles supplementing market growth

North America is expected to dominate the automotive aluminum market over the forecast period. This is mainly attributed to the stringent implementation of yield strength standards. CAFÉ Standards were implemented in the U.S. in order to reduce energy consumption by increasing fuel economy in cars, vans, light trucks, and heavy trucks. This has augmented growth of the market in the region. Asia Pacific is expected to follow North America in the consumption of automotive aluminum. This is mainly attributed to increasing discretionary income in the region and supportive government initiatives, especially in the growth engines of the region — China and India. For instance, the Indian government allows for 100% FDI in the automotive industry, which accounts for 7.1% of the country’s GDP. Furthermore, as highlighted by India Brand Equity Foundation (IBEF), the Indian government aims to make automobiles manufacturing the mainstay of its ambitious Make in India initiative and projects the passenger vehicles market to triple to 9.4 million units by 2026, as highlighted in the Auto Mission Plan (AMP) 2016–2026. This trend is expected to follow over the forecast period. ASI Performance Standard (Principles and Criteria launched December 2014) and ASI Chain of Custody Standard govern the automotive aluminum industry. These standards are applicable on all the phases of manufacturing aluminum, which includes bauxite mining, alumina purification, primary aluminum production, stages such as rolling, forging, extrusion and foundry, material alteration, and refining and re-melting of recycled scrap.

High cost of automotive aluminum as compared to steel and cast iron is one of the restraining factors for the automotive aluminum market. Also, introduction of new materials like reinforced plastic has restrained the market growth of automotive aluminum on a global scale. Research and development on alternative methods to produce aluminum at a lower cost and eco-friendly manufacturing processes to reduce environmental damage are some of the key strategies adopted by the top market players. Some of the companies operating in the global automotive aluminum market are Alcoa Inc., Arconic Inc., UACJ Corporation, CHALCO, AMG Advanced Metallurgical Group, Norsk Hydro ASA, Constellium N.V., Novelis Inc., and Rio.

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