Global Automotive Aluminium Growth Analysis Report - Market Size, Share, Forecast Trends and Outlook (2024-2032)

Automotive Aluminium Market Overview

Aluminium is one of the most widely used metals in the manufacturing of vehicles due to its favourable properties and characteristics, including excellent strength and lightweight, among others. The safety, recyclability, and high efficiency of the metal make it ideal for use to enhance the safety and sustainability of different components of vehicles, such as wheels, suspensions, and brakes, among others. As per the Aluminum Association report for 2022, the average aluminium used in vehicles was around 459 pounds per vehicle in North America.

Increasing research activities aimed at developing high-performance aluminium alloys with enhanced ductility, strength, and corrosion resistance to improve vehicles’ performance are anticipated to aid the growth of the automotive aluminium market. In addition, technological advancements and innovations aimed at reducing the weight of luxury vehicles are likely to surge the usage of aluminium in the coming years.

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Automotive Aluminium Market Insights

• As per the International Aluminium Institute, around 90% of the aluminium used in vehicles is recycled at the end.
• The global aluminium demand, including the demand in the automotive sector, is expected to increase by 40% by 2030.
• The aluminium growth is expected to reach the content level of 556 pounds per vehicle (PPV) by 2030. 
• Around 95% of the automotive aluminium scrap is recycled and recovered every year.

Automotive Aluminium Market Trends

Rising Trend of Sustainability

The increasing attempts to decarbonise the automotive sector and the surging preference for eco-friendly and sustainable transportation modes are expected to be some of the key market trends. Another crucial trend of automotive aluminium market is that the excellent strength-to-weight ratio as well as exceptional strength and durability make aluminium an ideal metal for use in developing lightweight and fuel-efficient vehicles.

The global CO2 emissions from fuel combustion witnessed an increase of 1.3% in 2022. China and the United States were responsible for around 45% of the total global fuel emissions, which necessitated the requirement for sustainability initiatives and green materials in the automotive sector that can reduce the total GHG emissions. As per a study by the Department of Energy's Oak Ridge National Laboratory, an aluminium-intensive vehicle can reach around 20% reduction in total life cycle energy consumption and 17% reduction in CO2 emissions.

Industry News

February 2024

JLR announced that it has signed a supply contract with Evtec Aluminium, a provider of lightweight aluminium powertrain parts, for its new range of Jaguar electric vehicles (EVs) from 2025. The deal is expected to be worth USD 67 million and promote the growth of Evtec in the automotive aluminium sector.

July 2022

Hydro announced that it aimed to continue investing in the automotive aluminium industry with a EUR 29 million investment in an innovative extrusion press at its plant in Tønder, Denmark. This new press increases production capacity and offers a high capacity to provide extrusion and can eventually support the extruded aluminium components for vehicles in the European region.

Opportunities in Automotive Aluminium Market

Burgeoning Popularity of HEVs and EVs

Aluminium is a key component in EVs and HEVs as it minimises their environmental impacts, increases fuel efficiency, and improves structural integrity. Hence, the automotive aluminium demand can be attributed to the rising popularity of hybrid electric vehicles (HEVs) and electric vehicles (EVs), buoyed by growing environmental concerns. As per the study by the Aluminum Association EVs use around 30% more aluminium compared to the standard vehicles.

Benefits of Aluminium Recycling

Aluminium recycling can save around 21 oil barrels of oil or around 1 tonne of aluminium, which boosts its demand in the automotive sector. As per the research data by the Aluminium Association, replacing a fleet of steel cars with aluminium cars can save around 108 million barrels of crude oil as well as remove the possibility of producing 44 million tonnes of CO2. This is because the use of aluminium instead of steel in car production leads to a 20% reduction in lifecycle CO2 footprint.

Market Restraints

The high production cost of automotive aluminium compared to cost-effective materials can hinder market growth. This can be especially common among small-scale automakers who do not have the budget to afford high-grade aluminium for their vehicles, impacting the overall automotive aluminium demand forecast. As per the data from the International Aluminium Institute, aluminium production prices are greatly affected by energy prices, which can make them difficult to afford compared to raw materials such as steel and plastic.

Moreover, the smelting process of aluminium requires a large amount of energy and the total energy for aluminium production can go up to 14-16 kWh of electricity per kilogram, which further adds to its high cost, and can pose a challenge to the market.

Market Dynamics

Growth of the Light-Weight Vehicles in the Market

Several government bodies across the world are imposing strict regulations and standards regarding fuel emissions. The European Union announced that it has set a target for 2030 which aims to reduce the CO2 emissions from new cars by 37.5%. The usage of aluminium can be paramount for achieving this goal as it is a lightweight material and can reduce the overall weight of the vehicle, promoting fuel efficiency.

As per the automotive aluminium market dynamics and trends, several major market players are readily incorporating aluminium in their models to enhance fuel efficiency. For instance, the Ford F-150 model of Ford is now composed of an aluminum body which reduces around 700 pounds from its weight and improves its fuel efficiency by 25%. Moreover, many EVs and hybrid EVs are also using aluminium in their production as the use of aluminium can reduce their weight by around 50%, compared to steel.

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Automotive Aluminium Industry Segmentation

“Automotive Aluminium Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Market Breakup by Form

• Cast Aluminium
• Rolled Aluminium
• Extruded Aluminium

Market Breakup by Vehicle

• Passenger Cars
• Light Commercial Vehicle (LCV) 
• Heavy Commercial Vehicle (HCV)

Market Breakup by Application

• Power Train
• Chassis And Suspension
• Car Body
• Others

Market Breakup by Region

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East and Africa

Automotive Aluminium Market Share

By Form Insights

As per the automotive aluminium industry analysis, Cast Aluminium holds the highest market share as it is widely used in the production of engine parts and transmission parts, among other critical components. Rolled aluminium is also gaining significant growth due to its growing usage in body panels and roofs as these parts require large flat surfaces.

By Vehicle Insights

Passenger cars account for the highest market share due to the growing production of passenger cars in recent years. Several passenger car automakers are leveraging aluminium to meet fuel efficiency standards in regions such as Europe and the USA. Moreover, the high adoption of aluminium by leading passenger car providers such as Tesla and BMW for their body panels and chassis aids the segment growth and consequently growth of the automotive aluminium industry.

By Application Insights

Power trains account for a substantial market share as aluminium is extensively used to reduce their weight while improving efficiency and lowering manufacturing costs. With the growing trend of sustainability, manufacturers are using recycled aluminium in vehicle components, including power trains, to enhance the environmental performance of vehicles, which boosts the automotive aluminium market revenue.

Meanwhile, the utilisation of aluminium in chassis and suspension of vehicles is significantly growing owing to its favourable properties like high thermal conductivity, excellent corrosion resistance, and energy efficiency, among others.

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Automotive Aluminium Market Regional Insights

North America Automotive Aluminium Market Trends

North America represents a substantial portion of the automotive aluminium market share due to the increasing demand for luxury vehicles in countries like the United States. The continued preference of consumers for larger automobiles is contributing to the rise in aluminum production. In 2022, there were four times as many light trucks as cars, and they also contained almost 30% more aluminum.

The rising preference for eco-friendly, fuel-efficient, and sustainable vehicles in the region, especially among the environmentally conscious population, is also propelling the automotive aluminium market opportunities. According to the "2023 North American Light Vehicle Aluminum Content and Outlook" report, from 2020 to 2030, the market share of aluminum content will rise by approximately 100 net pounds per vehicle (PPV) due to the growing demand for more environmentally friendly modes of transportation.

Asia Pacific Automotive Aluminium Market Drivers

The Asia Pacific is expected to witness healthy growth in the forecast period due to rapid urbanisation and industrialisation and the increasing demand and production of vehicles. The introduction of stringent government initiatives aimed at lowering carbon emissions from vehicles is also likely to favour the automotive aluminium market development in the coming years.

ICRA states that the automobile industry has a major impact on India's consumption of aluminum and projects that the country's domestic aluminum demand would expand at a healthy rate of about 9% over the next two fiscal years. Moving forward, a greater amount of aluminum would be used per unit if the goal of improving fuel efficiency through vehicle weight reduction was to be pursued. In the long run, however, a substantial switch to electric cars throughout the next ten years would also support domestic aluminum demand.

Europe Automotive Aluminium Market Opportunities

The European region is expected to hold a significant share of the market due to the stringent CO2 emission standards for vehicles that are encouraging the adoption of lightweight materials such as aluminium. The EU aims to reduce the 37.5% for passenger car emissions by 37.5% and light commercial vehicle emissions by 31%, which can aid the automotive aluminium demand growth.

Latin America Automotive Aluminium Market Growth

Countries such as Brazil, Mexico, and Argentina are some of the major manufacturing hubs of the region, which can promote market growth. There is an increased focus on enhancing vehicle production in the region, specifically in Brazil and Mexico, which can increase automotive aluminium market opportunities in the coming years.

Middle East and Africa Automotive Aluminium Market Dynamics

The MEA region is also expected to witness an upward trend in the market due to the presence of countries such as South Africa and Morocco which can offer major manufacturing hubs for automotive production. There has also been a surge in foreign investments in countries such as Morocco which allows automakers to invest in light-weight and efficient materials such as aluminium, which can boost the automotive aluminium industry revenue.

Innovative Automotive Aluminium Startups

Several startups in the company are focused on promoting sustainability and the usage of lightweight materials that can be achieved through aluminium. The companies are also investing in their production capacities and establishing collaborations with automakers to gain market reach.

Gränges

This is one of the prominent startups in the market which focuses on automotive aluminium production. It has promoted the use of aluminium in critical automotive parts such as heat exchangers and battery enclosures that can aid the demand of automotive aluminium market. The company is also readily investing in expanding its production capacity to increase its market reach across the world, specifically in regions such as North America and Europe.

BCAST

It is a UK-based startup from Brunel University which develops advanced casting and recycling technologies for aluminium in the automotive sector. The company is also working on sustainable aluminium casting methods that can improve the vehicle’s fuel efficiency and performance and has offered its high-strength aluminium to several automakers in recent years.

Competitive Landscape

The market players are heavily focused on innovations and establishing partnerships to supply aluminium parts to the automakers who are developing lightweight vehicles. Some players are also offering recycled aluminium as a part of the broader initiative of promoting sustainability.

Alcoa Corporation, founded in 1988, is one of the largest industrial companies in automotive aluminium industry. It is headquartered in Pittsburg, the United States, and is a major producer of aluminium in the world. Through research and development activities, the company aims to support sustainability in industrial activities.

Farinia Group is a company that specialises in the production of innovative materials for use in manufacturing activities. It operates in nearly 17 countries and has collaborated with 1200 partners to provide excellent customer service. Some of the sectors it serves are automotive, aviation, agriculture, fashion and luxury, and power generation, among others.

Endurance Technologies Limited is a leading aluminium die-casting company and one of the largest automotive component suppliers in India. Through its technologically advanced solutions, the company aims to deliver sustainable solutions to its customers. With its history dating back to 1985, the company has developed nearly 31 strategically located manufacturing facilities near leading OEMs.

Other automotive aluminium market players include Aluminum Corporation of China Limited, Consolidated Metco, Inc., Dynacast, Aluminium Bahrain B.S.C., Kaiser Aluminum Corporation, Gibbs Die Casting, Inc., Nemak Group, CITIC Limited, Bonnell Aluminum, Ryobi Group, Martinrea Honsel Germany GmbH, and Bodine Aluminum.

Recent Developments

September 2022

Alcoa Corporation announced innovations in its alloy development and deployment process with the introduction of A210 ExtruStrong, a high-strength, 6000 series alloy, which can be used across a wide range of end-use sectors such as automotive, construction, and industrial, among others.

May 2022

Novelis Inc., a provider of sustainable aluminium solutions in the automotive aluminium industry, announced that it is investing around USD 2.5 billion in building a new low-carbon recycling and rolling plant with an initial capacity of 600 kilotonnes in Alabama, the United States.