Profitable pairing

By Abbe Miller

June 2009- "Everyone can agree that The Big Three was a big mess long before the economy headed south. And a big part of the problem was due to the fact that they just weren't making cars that people wanted. It's been evident in their sales, with casualties like Pontiac proving consumers' disinterest in the domestics.

"Consumers want cars that perform well, cars that are safe and cars that get good gas mileage," says Kevin Lowery, the director of corporate communications at Alcoa Inc., Pittsburgh, and the communications committee chair for the Aluminum Association's Auto & Light Truck Group. "All of that plays to the benefits of aluminum. You can make a car lighter and stronger with aluminum, and the use of it in automobile production has grown every year since 1970, which is a great testament to the fact that automakers understand the value proposition."

Paying exorbitant prices for gasoline isn't too far back in consumers' memories and the long-term side effect of those pricey barrels is the paranoia that those prices will return. So consumers are preparing for that day by purchasing all the fuel-efficient cars they can get their hands on. Therefore, the CAFE-mandated 27.3 mile per gallon standard that will go into effect in 2011 is hardly considered a regulation.

"Some of the highest-selling cars in the North American fleet are those that have a lot of aluminum--more than 400 pounds or 10 percent of their weight," says Lowery. "For the Big Three, these are cars that include the Chevy Impala, the Dodge Caravan and the Ford Focus."

It's no secret that Honda and Toyota also have reputations for high aluminum use and therefore, high CAFE ratings. The pairing, which historically has resulted in high levels of popularity, is something that the Big Three would like to see more of.

"They're going through a tough period now, but we're confident that they'll be back," says Lowery. "It's just a matter of time."

Pertinent parts
Regarding CAFE regulations and cars with the highest performing gas mileage, however, The Aluminum Association's Auto & Light Truck Group did a survey of car manufacturers, which indicated that manufacturers understand that they need to make material adjustments to their vehicles.

According to a Ducker Worldwide report, conducted in conjunction with the Auto & Light Truck Group, "Even though 2009 vehicle production will be much lower than 2006 production, there will be a need for more aluminum engine blocks, more knuckles, more suspension arms and links, more brake calipers, more hoods and more bumpers than in 2006."

And the more aluminum that a car is comprised of, the lighter it becomes and the more fuel-efficient in turn. But what about safety?

"The amazing thing that you're beginning to see more and more of starts with the fact that you can have a big car that's still light," says Lowery. "You can have a big car with some material substitutions, such as aluminum for steel, and that car can become lighter but still be safe."

Therefore, consumers are already beginning to shed themselves of old misnomers. Many aluminum-intensive cars don't just happen to be lighter; the weight is intentional.

"Think about it," says Lowery. "A lighter car stops faster. Additionally, there are ways that aluminum can be designed that other metals can't, such as for parts of the crumple zone and crash management systems. There are so many benefits."

So as the government enforces automotive manufacturers to reduce their carbon emissions and increase their fuel economy, the prevalence of aluminum in a car's makeup will continue to rise. The Ducker report forecasts aluminum to achieve 10 percent of the average curb weight of a vehicle by 2020.

"We can make it lighter, we can make it stronger, we can make it perform better and we can make it safer," says Lower. "There's a lot that you can do with aluminum today."

Inevitably, there will be even more to do with it tomorrow. MM















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2016 End User Outlook

Although low pricing on metal products across the globe once inspired companies to stock up, there’s little appetite for risk peering into 2016.


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