Steel is playing a key role in the automotive sector, but is currently challenged by substitutes offering lighter alternatives. Nevertheless, leading firms in the sector have shown that room for further improvement exists.
The steel and car industries have been strongly intertwined over the past decades. Indeed, this infinitely recyclable metal accounts for 60 percent of the average weight of a car, and as much as 12 percent of the steel extracted is consumed for the automotive sector. Nevertheless, increasing concerns about fuel consumption has led car manufacturers to look for lighter alternatives than steel to build their new vehicles, aluminium being for instance on the rise in the industry (more information on this topic on http://snip.ly/bpnu ). No later than this month, Ford has for instance announced that aluminium will partly replace steel in the production plants for one of its pick-up series. In a nutshell, the use of aluminium for an average car is expected to increase from 6.6 percent in 2015 to over 25 percent within 10 years. Such figures could make us wonder whether steel is doomed to be replaced over the following year. Nevertheless, this is very unlikely to be the case, as steel still possesses unique characteristics and leaders in the industry are currently trying to improve their range of offers.
Even though steel suffers from a heavier weight than its substitutes and may therefore see its market shares decrease in the sector, it remains a far cheaper alternative than aluminium, manganese or plastic composite. As a consequence, car providers are facing a simple trade-off, and need to choose which one of the weight or fuel-efficiency variables they would like to optimize. Steel producers will therefore need to optimize this equation in order to reinforce their strong leading role in the sector. And that is exactly what is currently happening.
Advanced high-strength steel as the solution?
In order to remain competitive in an industry which has seen substitutes proliferate, major steel companies – such as Arcelor Mittal, accounting for more than 15 percent of the automotive sector’s steel sheets -are heavily investing in their R&D departments in order to produce lighter and thus more competitive steel for the industry. This illustrates well the fact that steel makers are trying to comply with the new rules of the game and increase their competitiveness. Even though the high-strength steels manufactured up to now remain significantly heavier than its substitutes and some improvements still remain to be made, it seems that the steel industry is following the right path to stay competitive in the automotive sector.
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Read more about:
- Alumimium threatening the steel industry:http://www.ft.com/cms/s/0/7c671aac-4372-11e4-be3f-00144feabdc0.html
- Advanced high-steel development: http://www.forbes.com/sites/greatspeculations/2015/05/20/trends-in-steel-usage-in-the-automotive-industry/
- Ford’s partial shift to aluminium: http://www.autonews.com/article/20150914/OEM01/150919923/ford-alcoa-plan-to-replace-more-steel-with-aluminum-in-f-150