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As western automakers embrace aluminium, Asia still welded to steel

Jun 20 2014, 11:57 IST
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Hyundai Motor considered shifting from steel to aluminium body parts for its Genesis sedan to make it lighter, more fuel-efficient. Hyundai Motor considered shifting from steel to aluminium body parts for its Genesis sedan to make it lighter, more fuel-efficient.
SummaryAs western carmakers such as Audi AG and Ford Motor Co lead the way in using aluminium, which is lighter but more expensive than steel, their Asian rivals are reluctant to invest in the costly retooling.

About four years ago, Hyundai Motor considered shifting from steel to aluminium body parts for its Genesis sedan to make it lighter, more fuel-efficient and more competitive with German luxury marques, two people familiar with the matter said.

Its affiliate Kia Motors made a similar move, building test versions of its premium K9 sedan, called K900 in the United States, using aluminium in body panels including the door, hood and trunk lid, two other people told Reuters.

But the South Korean duo, which together rank fifth in global auto sales, opted for steel instead, deterred by the cost and, according to two of those individuals, hamstrung by close ties with sister steelmaker Hyundai Steel Co.

As western carmakers such as Audi AG and Ford Motor Co lead the way in using aluminium, which is lighter but more expensive than steel, their Asian rivals are reluctant to invest in the costly retooling required that would disrupt existing manufacturing processes and supplier relationships.

"A really big challenge at the moment for the Asian companies is to find out how they should behave in this context of vehicles coming under more pressure to be lighter," said Truls Thorstensen, president and CEO of EFS Business Consultancy.

Automakers in Asia often prefer evolutionary upgrades that enable them to use existing plants and make multiple models on the same assembly lines; western rivals tend to make wholesale product changes that require re-engineering of factories. That's forcing Asian car companies to find other ways to cut weight and emissions as tighter U.S. and European fuel economy and emissions rules drive a push for lighter cars.

"If you are free to do whatever you want, the decision might be easier to go in the direction of aluminium or light weight," Thorstensen said.

Hyundai declined to comment on what materials it considered in product development. At Kia, a spokesman said the company did not use aluminium body parts in K9 test versions, and declined to comment on whether it considered using the material during the car's development.

RISING DEMAND

Aluminium demand by Asia's auto industry is expected to rise 71 percent by 2016, far below a projected five-fold jump in North America, according to an internal forecast by Atlanta-based Novelis Corp, the biggest maker of flat-rolled aluminium and a unit of India's Hindalco Industries .

In 2016, Asia will account for less than a tenth of total auto industry aluminium consumption, while North America and Europe will have about

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