Alcoa CEO: Growth of Aluminum in North American Vehicles Continues

Researched by Industrial Info Resources (Sugar Land, Texas)--The "aluminization" of the North American auto continues, which bodes well for aluminum producers like Alcoa Incorporated (NYSE:AA) (New York, New York), the company's top executive said this week. The average amount of aluminum per vehicle in North America is expected to grow by 77 pounds (20%) from 2015 through 2020, according to Alcoa Chief Executive Officer Klaus Kleinfeld. Industrial Info is tracking active aluminum-automotive projects worth at least $4.73 billion globally, including $2.89 billion in North America.

Speaking during the company's second-quarter 2016 earnings conference call Monday, Kleinfeld said aluminum penetration in just automotive hoods is expected to increase to increase from 6% in 2015 to 28% in 2020, while aluminum for vehicle doors will reach 73% penetration by 2020, compared with 43% in 2015. Using the company's trademarked Micromill aluminum casting and rolling system technology, aluminum could increase by an incremental 250 pounds vehicle, replacing steel, he added.

Alcoa's value-added product company split-off, Arconic, will benefit from the growth.

According to The Aluminum Association, lighter aluminum helps vehicles achieve greater fuel efficiency and 90% of automotive aluminum scrap is recovered and recycled.

A study by consultancy and market research firm Ducker Worldwide (Troy, Michigan) found that new pickup trucks contained the most aluminum at 548.9 pound per vehicle in 2015, followed by E segment sedans at 546.9 pounds, SUVs at 410.3 pounds and minivans at 396.5 pounds. The study estimated total aluminum content North American light vehicles produced in North America equaled nearly 7 billion pounds.

Still in the planning phases, Alcoa's San Antonio, Texas, aluminum Micromill plant expansion at its Elmendorf site has a total investment value of $750 million.

Alcoa plans to complete a split into two companies--Alcoa Corporation and Arconic--later this year.For related information, see July 5, 2016, article - Splitsville for Alcoa: Executives Still Mum on Capex for New Companies.

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