The global automotive alloy market size is projected to grow at a promising CAGR of 7.69% during the forecast period, to reach USD 177.47 Billion by 2021. Increasing production of automobiles coupled with increasing need to reduce a vehicle’s weight are the major factors driving this growth.

The market for aluminium is estimated to witness a high growth owing to increasing adoption of aluminium in multiple automotive applications by globally established OEMs. The rising average weight of the vehicle due to integration of various systems has led to OEMs to consider using lighter materials for the vehicles. The demand for lightweight materials by OEMs has directly influenced the suppliers of raw materials and increased competition in the market. For instance, Novelis Inc. (U.S.) developed the Advanz 7000-series of aluminium products which can be used to manufacture automotive components such as bumper systems, and door intrusion beams, among others.

The Asia-Oceania region includes emerging economies such as India, China, Indonesia, and Thailand, among others. Increase in disposable income coupled with rise in population levels has driven the demand for automobiles in this region. The geographical advantages of Asia-Oceania region and government support for industrialization have reduced the production costs.

The size of the market for alloys used in LCVs, in terms of value, is projected to grow at a fast pace in the automotive alloy market during the forecast period due to increasing adoption of aluminium, especially in the North American region. The passenger car segment is estimated to be the largest market for alloys because of the increasing demand for transportation and new hybrid and electric automotive models.

Automotive OEMs have been spending heavily on the research and development of new alloys for powertrain applications to reduce the weight without reducing the strength of the components. This has led the alloy manufacturers to develop innovative aluminium applications in the powertrain.

The major restraints considered in the study include high cost and engineering barriers. These factors could negatively affect the demand for adoption of lightweight alloys.

ArcelorMittal S.A. is one of the largest suppliers of steel to the automotive industry with approximately 13.3 Million tonnes of flat steel deliveries, generating revenue of USD 12.6 Billion from sales to automotive manufacturers in 2014. However, owing to stringent regulations governing vehicular emissions, OEMs are focusing on using lightweight materials, especially aluminium, to reduce weight. This has increased the competition for the company as OEMs have started to shift from steel to aluminium. The company has invested in developing new steel products which can compete with aluminium in the automotive industry. The company plans to invest USD 20 million to establish a research and development center in Brazil. The company also supplied its lightweight products to Honda Motor Company (Japan).

To speak to our analyst for a discussion on the above findings, click Speak to Analyst