Articles in Category: Automotive

The ever-resourceful Renault-Nissan and their ever-creative chief executive, Carlos Ghosn, have just launched their latest offering for the emerging markets, the Renault Kwid.

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Priced at Rs 300,000 ($4,700) is it certainly pitched price-wise at the emerging markets and at first glance should prove popular in its first market, India, but also in other emerging markets in time such as Indonesia, Vietnam and others.

Emerging Auto Markets

The attractions are clear, all have massive populations, low per-capita car ownership markets with huge medium-to-long term potential. A Financial Times article explains that Renault had to start from the ground up in designing the Kwid to achieve such a low price.

They based the whole design team in Chennai, the city known as the Detroit of India – a first for a western car maker – using mostly Indian designers and sourcing Indian parts. The concept they say is frugal, innovation and required a completely new clean sheet approach.

Illustrating the problem, the FT quotes Navi Radjou, a management theorist in saying “companies don’t like to learn new things, to be blunt. They try to exploit their existing knowledge, not to rethink what they do from scratch.”

Why Automakers Miss

Western businesses see developing economies mostly as new markets where they can sell more of what they already produce. Those that try to come up with something new tend only to tweak existing offerings, which rarely works. GM and Volkswagen may well be cases in point, having poured millions into the market with limited success.

Even Indian firms get it wrong. Tata Motors‘ Nano was certainly cheap when it was introduced in 2009, but it flopped. Spurned, the article says, by rudimentary features and a poor safety record.

Screen Shot 2015-06-03 at 12.38.16

The Rennault-Nissan Kwid, a crossover SUV that breaks the $5,000 barrier.

Renault’s design team has focused on what emerging market buyers place priority on, roomy interiors to accommodate large families, heavy duty air-conditioning to cope with summer temperatures and fancy navigation and media systems.

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Today in metals, two steel majors joined forces in India and predictions differed for the US economic recovery.

ArcelorMittal and SAIL Team Up for Auto Plant

ArcelorMittal, and the Steel Authority of India Limited (SAIL), India’s leading steel company, signed a memorandum of understanding to set up an automotive steel manufacturing facility under a joint venture arrangement in India.

Why Manufacturers Need to Ditch Purchase Price Variance

The MoU was signed in London Lakshmi Mittal, Chairman and CEO of ArcelorMittal, and C.S. Verma, Chairman of SAIL. Rakesh Singh, Secretary to the Government of India, Ministry of Steel and Aditya Mittal, ArcelorMittal CFO and CEO ArcelorMittal Europe, were also present.

The MoU is the first step of a process to establish a JV between the two companies. The proposed JV will construct a state-of-the-art cold rolling mill and other downstream finishing facilities in India that will offer technologically advanced steel products to India’s growing automotive sector.

MarketWatch: US Recovery Murky

It’s a mystery if the US economy will fire back up and grow at a significant rate this summer.

Not long ago, economists thought US growth could reach nearly 4% in the second quarter after a tepid 0.2% gain in the first three months of the year, a period marked by unusually harsh weather. That would be a carbon copy of the feast-or-famine growth pattern that occurred in 2014.

Many are so sure after an uneven batch of economic reports midway through the second quarter. A poll of analysts compiled by MarketWatch predicts the US will expand at a 3.2% annual rate from April through June — and some have chopped their forecasts to below 3%.

A cluster of fresh reports this week probably won’t give much inkling.

Orders for durable goods such as TVs and trucks that are meant to last a long time are expected to fall again in April. Business spending and investment have softened considerably since last fall.

Sales of new homes nationwide, meanwhile, might creep higher in April, but closings are still historically weak.

The transportation funding can got kicked down the road in Washington and a major steel company agreed to pay for a predecessor’s Michigan environmental infractions.

House Passes Short-Term Highway Bill

The House voted Tuesday to extend federal transportation funding for two months, in an attempt to prevent an interruption in the nation’s infrastructure funding at month’s end, the Hill reported.

Why Manufacturers Need to Ditch Purchase Price Variance

The decision to punt a long-term funding extension to the summer was approved by a 387-35 vote, over the objection of Democrats, who argued Congress should have found a way to pay for a longer-term extension.

Twelve Republicans and 23 Democrats voted against the bill. Rep. Mark Amodei (R-Nev.) voted “present.”

Ahead of Tuesday’s vote, White House officials said President Obama is willing to sign the temporary transportation funding extension if it is passes the Senate later this week, even though he would prefer a longer-term solution.

AK Steel Dearborn Pays Severstal’s Fines

AK Steel will pay $1.35 million to settle alleged air pollution violations at a Dearborn plant previously owned by the American subsidiary of Russia-based Severstal.

The Justice Department announced the agreement among the steelmaker, the federal government and the State of Michigan Wednesday, saying it settles 42 violations alleged by the state Department of Environmental Quality and two notices issued by the Environmental Protection Agency against Severstal North America.

AK Steel, based in Ohio, announced last summer its intention to purchase Severstal’s Dearborn coke-making facility and other assets for $700 million. Following the sale, completed in September of last year, AK Steel took responsibility for past violations.


It may seem absurd at first sight to compare an icon of America’s heritage, the Harley-Davidson, with a British transplant to India from the 1940’s, but both the Harley and Enfield share at least one thing in common. Both trade on a marketing image that is soundly retro, much as Harley has tried to appeal to a younger audience, it’s old guys like me that drool over those classic lines and make up the majority of their owners.

Pool 4 Tool’s Automotive SRM Summit

The Enfield also has a decidedly retro appeal with the range being largely unchanged from the original 1940’s designs; it oozes rugged simplicity and economy. The Bullet 500 single cylinder machine is essentially the same as made by Enfield from the 1940’s in the UK before Eicher Motors, a Mumbai-listed manufacturer of engines and commercial vehicles, bought Enfield’s Indian unit in 1994 and kept the brand alive as Royal Enfield after it closed in the UK.

Modern Design, Classic Appearance

Changes such as using aluminum instead of steel for engine components and fuel injection instead of carburetors have improved the reliability and economy but not changed the appearance.

Source FT and Bloomberg

Source: FT and Bloomberg

Clearly, the brands differ markedly in many other ways, not least price where Harley appeals to wealthy middle class (mostly middle age) bikers, while the Lee Enfield has a much wider audience that has helped fuel dramatic sales growth.

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The federal government’s Highway Trust Fund is nearly dry again. Remember when we played this game last year?

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Transportation Secretary Anthony Foxx on Friday said, “we ought to be embarrassed as a country” about the state of the nation’s infrastructure, as lawmakers once again scramble to beat a May 31 deadline for extending federal transportation funds.

A Patch for the Patch

Lawmakers have talked about passing a $10 billion patch to extend transportation funding until the end of the year, but Foxx said temporary extensions are not sufficient enough to address the nation’s infrastructure needs.

“We ought to be embarrassed as a country,” he said after an appearance at a Washington, D.C., Metrorail subway station in Northern Virginia.

Foxx has a point as last year’s fix for hundreds of millions of dollars in highway, bridge and public works projects was supposed to give lawmakers time to come up with a comprehensive solution to funding the steel, concrete and underground pipe and tunnel work necessary to ensure safety of our rapidly aging infrastructure. The Highway Trust Fund is currently funded only by gas taxes and a user fee that hasn’t been adjusted since 1993.

Manufacturers Urge Long-Term Fix

Dennis Slater, president of the Association of Equipment Manufacturers, recently wrote in a Milwaukee Journal-Sentinel Op-Ed that, “the cycle of short-term fixes already is damaging our economy. States already have pulled back on hundreds of millions of dollars’ worth of investment amid uncertainty over whether Congress will pay its trust fund tab. That hurts job creation right here in Wisconsin, among our state’s many manufacturers, contractors and workers in related industries.”

Slater and AEM urged Congressman Paul Ryan, chairman of the influential House Ways and Means committee, to push for a 5-year, fully funded fix for the trust fund rather than another short-term extension.

“Ryan has begun to float a short-term extension to buy himself more time to craft comprehensive tax reform legislation — a laudable goal — which he says would account for highway investments,” Slater wrote. “But the safety of America’s roads and bridges shouldn’t depend on the fate of tax reform, which faces an arduous path forward on Capitol Hill.”

Congress has three weeks to act.

Seems that somebody forgot to tell the automotive metals that the bear market was still going on this month. Strong aluminum and high-strength steel demand, and end-user purchases, have again made auto the standout in a field of mostly down markets.

After flattening in April, the monthly automotive MMI® registered a value of 87 in May, an increase of 2.4% from 85 in April. A big factor was the performance of aluminum coil on the index, as its index broke resistance and soared as well.

Pool 4 Tool’s Automotive SRM Summit

China removed export taxes on aluminum, opening more markets up to the automotive-grade sheet and coil prices that automakers in the West have been experimenting with for a decade now. Prices of palladium, lead and even copper also notched strong LME growth filling strong demand from domestic and foreign automakers.

Consumer Sales Rising

In the US market, April new car sales rose by 5% from a year ago, to more than 1.463 million units as predicted in a J.D. Power and LMC Automotive‘s mid-month auto sales forecast update. April’s totals are anticipated to be the highest since April 2005.

SUVs and smaller “crossover utility vehicles” were the main leaders in the sales surge. While not all US automakers posted strong Q1 results, profits were generally up even if they were up lower than some analysts expected. General Motors‘ results were better than in the same period a year ago, when costs associated with safety recalls limited quarterly profit to $125 million.

Fiat Chrysler Automobiles reported a profit of $101.2 million (€92 million) d​uring the first quarter compared with a loss of $173 million (€190 million) during the same period last year.

What This Means for Automotive Buyers

Consumer demand for automobiles traditionally picks up in the summer months, so this could be the beginning of a big turnaround for our Automotive MMI®. Fundamentals continue to look strong as the index had better supply and demand numbers than other metals even when it was losing price ground. Stay tuned.

For actual prices of the automotive metals this month, read the full article by logging in or signing up to become a MM member.

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New metal technologies play a key role in all we do here at MetalCrawler and none could be more promising than Tesla Motors‘ line of batteries for the home. The Chinese yuan may also be on the cusp of being declared not manipulated by the International Monetary Fund.

Tesla Home Batteries

The idea is that homes and businesses powered by solar panels could harvest and store energy during the day that could be used to run homes at night, or be used as a backup during a power outage.

Why Manufacturers Need to Ditch Purchase Price Variance

Although the exact technology involved in the battery, called Powerwall, is a closely guarded Tesla secret, it probably isn’t based on revolutionary concepts, Jordi Cabana, a chemistry professor at the University of Illinois at Chicago told Live Science. Cabana studies new battery materials and said the batteries look as if they are based on the same lithium-ion batteries in Tesla’s cars.

“Just looking at the specs that they publicize, it doesn’t look very different — in terms of the cost — to what they’re putting in their cars,” Cabana said.

The company is also planning to unveil a business-based battery-storage system, called the Powerpack, though the price for that system has not been released yet. Tesla is already taking orders for its residential system, but the products won’t ship until late summer, company representatives said at the news conference.

IMF Close to Calling Chinese Yuan ‘Not Manipulated’

In what would be a blow to US manufacturers, particularly steelmakers, the International Monetary Fund is close to declaring China’s yuan fairly valued for the first time in more than a decade, according to the Wall Street Journal, a milestone in the country’s efforts to open its economy that would blunt US criticism of Beijing’s currency policy.

The fund’s reassessment of the yuan—set to be made official in IMF reports on China’s economy due out in the coming months—follows years of IMF censure of Beijing’s management of the currency.

Although stainless steel demand is expected to grow moderately this year, service centers are flush with inventory which is putting pressure on US mills.

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Combined with successive months of declines in nickel prices, service centers are only purchasing what is absolutely necessary. Both domestic mills and Asian mills have robust North American inventories, a stark contrast from a year ago when lead times went beyond the standard 6-8 weeks, causing service centers to seek alternative sources.

Technical Issues Hurting Mills

Another exacerbating factor in last year’s supply was Outokumpu’s technical issues with its cold-rolling mills and a lack of alternative domestic supply led service centers to seek other sources. With lead times extended, the domestic mills were able to pass through several base price increases in 2014.

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Today in MetalCrawler, losses widened at a major stainless steel manufacturer, an aluminum giant gets a new CEO and two design and construction software companies team up for better workflows for HVAC designers and installers.

AK Steel Loss Widens

AK Steel Holding Corp. said its first-quarter loss widened from a year earlier on a big write-down related to its investment in iron-ore pellet joint venture Magnetation LLC.

Why Manufacturers Need to Ditch Purchase Price Variance

Average selling prices fell 8.9% from a year earlier, while shipments increased 39%, with a boost from an acquisition and strong demand from the automotive sector.

Ohio-based AK Steel in March predicted that shipments of carbon and stainless steel to the automotive market would remain strong because of market demand. However, the company warned that it expected its shipments to decline 14% from the fourth quarter to roughly 1.7 million tons on weakness in the carbon steel spot market, which AK Steel attributed to rising imports.

Martens Leaves Novelis

Novelis Inc., the US’ largest aluminum recycling and rolling company, has announced the departure of Philip Martens as the company’s president and CEO. Replacing Martens as president on an interim basis is Steve Fisher. Novelis says it has begun a search for a permanent CEO.

Martens, a former Ford Motor Co. executive, joined Novelis in 2009. During his tenure with Novelis the company shifted its focus toward servicing the automobile industry.

Vulcan Works With AECOsim for Ductwork

Geo-positioning and construction software manufacturer Trimble recently started supporting new construction modeling workflows with enhanced integration between Bentley Systems‘ AECOsim Building Designer software and Trimble’s Vulcan sheet metal cutting software for the HVAC market. The new workflow integration enables design models to be shared easily, securely and accurately. The move expands the companies’ ongoing collaboration around “Construction Modeling” and enhanced information mobility.

Vulcan is a sheet metal cutting software product for HVAC contractors, design/build firms and duct manufacturers, who rely on the software to increase shop productivity, plan duct design and installation and reduce waste.

MetalCrawler has a case of the Mondays as steel prices in China are being cut even more to try to spur sales.

China Steel Cuts Prices Deeply

China Steel Corp. announced Friday a deeper-than-expected price cut of 7.4% on average for its products to be shipped to local customers in June, as sluggish demand is adding pressure on the profits of China’s biggest steelmaker this quarter.

NHTSA Approves of F-150 Crash Compatibility

The National Highway Traffic Safety Administration gave its top rating to the aluminum-bodied 2015 F-150 Super Crew, granting it five stars for both the frontal and side impact tests and four stars for the rollover rating.

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The previous model, with a steel body,  got an overall rating of four stars, and only three stars for the frontal crash. Safety ratings have not yet been released by the other US group that conducts crash-testing, the Insurance Institute for Highway Safety (IIHS), whose tests are generally regarded as even more stringent than NHTSA’s.