Adoption of aluminum in auto industry slower than expected – by Jeff Sanford (Collision Repair Magazine – November 16, 2015)

http://www.collisionrepairmag.com/

Toronto, Ontario — November 16, 2015 — Once a quarter the world’s major publicly-traded corporations announce their earnings. Corporate executives appear before the press to offer explanations for exactly why their companies are making or losing money. One story that emerged this past earnings season involves the aluminum sector.

This past earnings season, the CEO of the world’s largest producer of rolled aluminum, Novelis, explained to investors that sluggish business at the company was a result of a slower-than-expected adoption of aluminum by the automotive industry. The big story in the metal sector over the last year has been the shift to wider use of aluminum in the automotive industry.

For decades, high-end vehicles have been made with aluminum. But over the last year the adoption of an aluminum body in the Ford F-150, the best selling car in America, was supposed to mark the beginning of a once-in-history shift from steel to aluminum for more mainstream vehicles.

The aluminum industry is beset by falling prices, and executives have pointed to the use of aluminum by the auto industry as a reason for optimism. Could the predictions of a big boom in aluminum gotten ahead of the story? Arguably.

This year was supposed to be the beginning of a new era in body manufacturing. But the story of aluminum adoption by the auto industry hasn’t been as revolutionary as many thought. Speaking during a phone call announcing Q2 2016 earnings for Novelis, Steve Fisher, CEO, indicated the adoption of aluminum by the auto industry is happening at a less furious pace than some have expected.

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