Car Wars Episode IV: A New Hope for Steel?

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In our previous post, we described how light-weighting would reduce the total number of pounds of steel used in the production of the average vehicle, even without a pound of that material shifting to alternative materials such as aluminum. That’s because steel necessarily has to cannibalize its own share by substituting lighter high-strength steels for mild steels.

The challenge for the materials industry has less to do with reaching the 2016 CAFÉ standards of 35.5 mpg but rather the 2025 CAFÉ standards of 54.5 mpg. Undoubtedly, aluminum’s share of the total pie by volume will continue to grow (see chart below), but not necessarily at the expense of steel when one accounts for the higher-margin steel.

Light Weighting

Source: Ducker Worldwide, Aluminum Associaton

We see three additional arguments the steel industry ought to make in response to the aluminum PR momentum.

The biggest one involves a 2012 NHTSA (National Highway Transportation Safety Administration) study that brought in a team of experts to build a vehicle with “maximum weight reduction” while maintaining current feature/functionality, safety, etc., and at the same time creating a vehicle at a retail price point within 10% of the original vehicle, a 2011 Honda Accord.

Design for Manufacturability

The design team chose advanced high strength steels concluding, “Although other materials such as aluminum and composite offer greater weight savings, their cost premium and large scale manufacturing limitations prevented the team from choosing them for the body structure.”
Second, the “war” between aluminum and steel actually involves less of a one-or-the-other approach and really more of an integrated approach such as VW’s MQB process. That process uses a modular body architecture and incorporates multiple alternative “light weight” materials including advanced high strength steels, aluminum and composites, among others.

Finally one additional argument in the corner of the steel camp involves body repairs. According to one recent article, the cost of tooling, new equipment and training will mean rising prices for body shops as well as consumers. At the end of the day, consumers will make purchasing decisions based on total cost of ownership (though after reading many of the comments to that story, many might conclude that these types of repairs really won’t weigh heavily on consumers). That of course remains to be seen.

Whether consumers will choose a car based upon a particular metal appears doubtful but consumers will choose based upon cost or, in our case, total cost of ownership.

We don’t think the aluminum camp should declare victory just yet.

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