Material Transformations

Over the past couple of columns we have articulated the looming impact of various factors from the perspectives of cost, complexity and competitiveness. The new Big Three—Electrification, Automated Driving and Shared Mobility—will drive substantial changes to the structure of the auto industry over the next decade. Combine this with lower production volume increases through the balance of the decade and the critical issue of achieving the optimal sales mix and the result is the building blocks of an increasingly competitive sourcing environment. 

To some, continuing business as usual is an easy choice, but not the wise one. OEMs and suppliers alike are facing so many fundamental changes that business systems and structures are all being called into question. An area which has and will continue to witness tremendous change will be the vehicle body-in-white (BIW). Over the next 10 years, the average BIW will be reduced in mass by up to 15 percent in North America despite the increased in crossover utility (CUV) volume. The average CUV can weigh 500 pounds more than its sedan cousin off the same platform. The shift in demand for CUVs will further complicate improving fuel economy in North America. By 2025, over 37 percent of all production volume will be for CUV/SUV body styles—up 6 points of share from 2010 according to the recent IHS North American Light Vehicle Production Forecast. This comes at the expense of sedans and coupes. Taller body styles = heavier structures.

OEMs have been facing the challenge of mass reduction for over a decade. Material and process substitution to reduce mass have been alive and well in powertrain, suspensions, chassis, and even interior systems. No doubt the prime focus will be placed upon reducing mass within BIW while maintaining structural integrity in the face of new 5-star crash tests. Several new platforms raised the awareness of material substitution and optimization to achieve mass reduction. The aluminum-intensive Ford T3 platform (F-Series, Super-Duty and next-gen SUVs), GM’s multi-material Omega platform (CT6 sedan) and a raft of German-designed vehicles (Audi Q7, BMW 7-Series, recent Mercedes E-Class) all represent massive diets of various types.

Luckily for the supply base, the mass-reduction recipe is different for each OEM, dependent upon current capital structure, the compliance gap which needs to be closed, in-house technology, supply base alignment, cost structure and competitive factors. In-turn, no one material will be the answer. Though aluminum sheet has and will continue to make inroads to impact Class A surfaces, cast and extruded aluminum are increasingly finding homes in rails, cross members and shock towers. Look for aluminum in the BIW to reach 3.5-billion net pounds by 2025—almost a four-fold increase. With scrap included, this number is at least 25 to 30 percent higher.

Although aluminum industry has been slowly but steadily gaining share, the steel community has been actively developing new grades and processes to help maintain share. Shifts to higher yield strength varieties are offering new hope to maintain the bulk of the current stamping and assembly infrastructure, enabling for lower capital requirements. Shifting to an aluminum-intensive body shop is not an inexpensive endeavor. Look for higher tensile strength steel grades to become viable options—a trend which we have witnessed from several OEMs and trumpeted by General Motors of late.

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Some suppliers are true enablers. Those with unique welding, adhesive and fastening technology will need to continue to come to the table with solutions for further cost-effective integration of new materials. Meeting emissions/fuel economy standards which stiffen by 5 percent a year through 2025 no matter who enters the White House in November will require every industry participant to pull its load. 

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Michael Robinet has been a managing director of IHS Automotive since 2011. Prior to that, he was the director of Global Production Forecasts for IHS Automotive. His areas of expertise include global vehicle production and capacity forecasting, future product program intelligence, platform consolidation and globalization trends, trade flow/sourcing strategies and OEM footprint/logistics trends.