Long seen as a lighter but far more expensive alternative to steel for automotive manufacturers, aluminum has enjoyed a surge as engineers scramble to shave weight amid tighter emissions standards. A new study to be issued Monday by DuckerFrontier says the use of aluminum in vehicles is projected to grow 42% over the next decade, but at a slower pace than in previous forecasts.

The average vehicle sold today weighs nearly 4,000 pounds and is made of rubber, plastic, steel, aluminum, upholstery and other materials. Auto makers have worked to make every component—from body panels and engines to brackets and windshields—lighter, often by substituting materials that can add costs but improve miles per gallon.

Ford’s shift in 2014 from steel sheet metal to aluminum for the best-selling F-150’s body panels, which represent a meaty portion of a vehicle’s structure, was seen as a tipping point for aluminum because sales and production volumes of Ford’s truck are so high.

Designers, more recently, have decided to use a mix of materials including magnesium and carbon fiber to achieve weight savings, and steelmakers have rolled out stronger but thinner, lighter steels. 

At the same time, the Trump administration is considering softening fuel economy regulations, which could slow so-called light-weighting efforts as urgency fades. 

“You’ll probably never see anything again that’s as aluminum intensive,” Dick Shultz, co-author of the DuckerFrontier study, said in an interview. While Ford slimmed down its F-150 by 700 pounds via aluminum, it also added $1,000 in costs per vehicle, he said while predicting the next generation F-150 would likely use less aluminum in favor of other materials.

CLICK HERE TO READ MORE

Earlier this month (July 4) the NY Times reported, “Automakers said this week that sales dropped in June for a sixth consecutive month, falling by 3 percent from a year ago, a trend that analysts do not see letting up anytime soon.”

Source:Bureau of Economic Analysis, via Federal Reserve

Riding the wave of year-over-year increasing industry volumes will not be a significant means to achieve necessary growth rates over the next five years. Many companies have tightened their belts since the automotive crisis in 2008 and 2009, and may likely weather any uncertainty. However, some companies will find ways to prosper in this dynamic time, while others merely endure.

Flexibility, diversity, thinking broadly with speed and confidence is critical to driving above-average returns. To do this, in-depth research and analysis is essential. Required actions and investments take time and planning to materialize, and should be built on an intimate understanding of customers and markets. Driven by emerging technologies, new mobility solutions, regulatory push and consumer preferences, suppliers are changing quickly and dramatically.

Where are the largest opportunities: Which markets, products, materials, technologies, customers offer the greatest potential?

How do you get there: Organic investment, acquisition, commercial collaboration, or another way?

“We at DuckerFrontier have supported clients in and around the automotive OE and aftermarket space, providing market intelligence and critical insight on many recent transactions, enabling investments with confidence and speed that deliver growth and profit expansion for our clients,” said Scott Ulnick, DuckerFrontier Managing Principal.

Across the industry, suppliers are actively trying to capture the tailwinds in the market. For example, Samsung Electronics purchased Harman in Feb. 2017, with plans to leverage its position and capabilities to become a long-term leader in the growing area of automotive electronics. This includes navigation systems, infotainment, telematics and driver-assistance technologies, now estimated to account for at least 30% of current vehicle cost.

The Faurecia Automotive Exteriors business unit was sold to Plastic Omnium in July of 2016, to allow for accelerated investment and growth in other key areas like sustainable mobility and the cockpit of the future. This kind of action is driving strong profitable growth, per Patrick Koller, Faurecia CEO. “It will also move into adjacent and new markets such as high-horsepower and industrial applications, in particular using its breakthrough deNOx technology, which was acquired with Amminex,” Koller stated. “Our ambition is to provide clean mobility solutions for all our customers, as well as expand our digital services to cities.”

Source:“Faurecia Investor Day demonstrates strong profitable growth of its Clean Mobility Business driven by innovation and breakthrough technologies.” Faurecia. June, 2017

An interesting move by LKQ, which affected both its OE and aftermarket business, was the LKQ purchase of Pittsburgh Glass Works (PGW) and the turnaround selloff of the OEM automotive glass portion of the business to Vitro on March 17. This drove Vitro’s shares up 3.5% upon announcement. This deal supports not only the glass sales but the technology that utilizes it, such as heads-up display (HUD), advanced driver assistance systems (ADAS) that utilize cameras, etc. LKQ President and CEO Robert Wagman said in a statement, “PGW’s industry-leading OEM business fits well with Vitro’s long-term growth strategy within the automotive glass manufacturing industry, and this divestiture allows LKQ to focus on our aftermarket glass distribution operations and the synergies that exist with our core North American auto parts distribution business.”

Source: Huetter, John.”LKQ sells off OEM auto glass business of PGW to Vitro for $310M.” RDNRepairer Driven News. December, 2016

Thoughtful companies are evaluating what’s needed to increase market share, explore new markets, and propel their organizations past the challenges that lie ahead. These actions and strategies are crucial, and can set an organization apart by how it allocates resources.

As a leader in market research, DuckerFrontier can help identify areas of opportunity in current or adjacent markets, to help your organization quickly grow. Please reach out to us for more information on supporting strategic planning initiatives and market research needs.

Mr. Abraham will speak on July 31 at CAR MBS, the first day of the four-day event (from July 31 to August 3) taking place in Traverse City, Michigan. The CAR Management Briefing Seminars feature thought-provoking, content-rich sessions led by many automotive industry leaders and visionaries. The event will also bring together experts, practitioners and policymakers, to connect with management executives from automakers to discuss where the global automotive industry is headed.

Attendees of CAR MBS 2017 are drawn from various industry segments, including public transportation, automotive, logistics and mobility. Management from automakers and suppliers – along with representatives from the financial community, government and automotive press – will focus on the issues impacting the industry and the pathways to success. Additionally, CAR MBS will address topics such as: manufacturing, trade, strategy, mobility, restructuring, sales, production forecasts, fuel emissions and more.

To learn more about CAR MBS 2017, please go to:

http://www.cargroup.org/mbs/

Abraham will speak at Aluminium China on July 20, the second day of the three-day event (July 19-21) in Shanghai. Aluminium China is Asia’s top aluminum industry platform for the aluminum industry supply chain, and will bring together leading industry figures, state-of-the-art technologies and advanced applications related to aluminum. Aluminium China 2017 will host more than 400 exhibitors from 75 countries and regions from around the world.

Pfefferer’s appearance at Vehicle Telematics 2017 spans both days of the event – the largest and most sought-after B2B/B2C platform to discuss relevant trends that guide the next wave in the automotive industry. The event serves as a forum to bring together experts, practitioners and policymakers, to connect with senior-level executives and discuss the business possibilities of vehicle telematics.

“Telematics India has evolved over the years into the leading event on connected cars and automated vehicles in India. Its impact, however, reaches beyond India, influencing the entire region. We’re honored and proud to be part of the event again, and we look forward to interesting presentations and discussions over these two days,” said Pfefferer.

In its seventh edition, the conference will bring together expert keynotes, case studies and panel discussions. Attendees will come from various industry segments, like public transportation, automotive, logistics, mobility, telematics and consumer electronics. Some of the topics Telematics India will address are: Connected Vehicles, Automotive Cyber Security, Fuel Optimization, Advanced Driver Assistance Systems (ADAS), Connectivity Services, Driver Behavior Management, Vehicle Tracking, UBI, Policy & Industry Trends, and more.

To register for Telematics India, please go to:

http://telematicswire.net/conf/2017/pune/registration.html

The three-day event featured forums, roundtables, private sessions, over 30 international speakers, and more than 40 workshops that introduced innovative vehicles and sustainable technologies. Discussions at MOVIN’ON 2017 addressed the challenges of mobility, and provided insight into economically viable environmental solutions. From Kemnitz’s experience at MOVIN’ON, he notes, “the point was made that changes ahead can be accelerated or better managed through including the voice of citizens and users.”

This global summit, first held in 1998 and originally called the Michelin Challenge Bibendum, is now sustainable mobility’s flagship gathering. In 2017, important changes to Michelin Challenge Bibendum include:

• More collaborative and participative activities
• More open approach to the full range of mobility ecosystems
• Greater focus on concrete initiatives
• Showcase for work by the Michelin Challenge Bibendum Open Lab
• A new name: MOVIN’ON

After MOVIN’ON, Kemnitz concluded how much he enjoyed the format of the summit: “We thank Michelin for this great event and for the opportunity to participate. The workshops that I attended were at the crossroads of innovation concerning data, communication technology, and behavioral change, all improving vehicles and their operation to the benefit a more sustainable and citizen-friendly transport activity.” MOVIN’ON 2018 is confirmed again in Montreal, and DuckerFrontier is looking forward to contributing at this event.

To learn more about MOVIN’ON 2017, go to:

http://www.michelin.com/eng/sustainable-development/better-mobility-for-everyone/movin-on

Abraham works closely with key North American and Global accounts to help achieve strategic growth objectives. With a core focus on DuckerFrontier’s light-vehicle and materials practice, Abraham is actively involved in client initiatives, including alternative lightweighting and materials strategies, telematics and infotainment technology assessment, alternative supplier assessments, as well as market entry in developing regions.

With more than 12 years of experience, Abraham directs multiple client engagements in the fields of technology trend assessment, competitive analysis, the voice of the customer, market size and segmentation, and data modeling. Since joining DuckerFrontier, Abraham has managed several global initiatives, including leading project teams throughout Europe and Asia. He’s also a popular speaker for many automotive market events, including light-vehicle material trends and market entry strategies for foreign markets.

Since 1994, Sapa has been the leading educator within aluminum systems in North America, and provides more than 40,000 hours of technical training annually to stakeholders worldwide. For more information on Sapa’s profile academy, visit www.aluminumeducation.com