May 21, 2024

The Global Automotive Aluminum Market Growth is projected to driven by lightweighting trends

The automotive aluminum market comprises aluminum products such as aluminum sheets, extrusions, and cast parts that are used in commercial vehicles, passenger vehicles, and other automotive applications due to their light weight and corrosion resistance properties. Aluminum helps reduce the weight of a vehicle, thereby improving fuel efficiency. It is a preferred material for engine components, suspension components, wheels, and other exterior body parts.

The Global Automotive Aluminum Market is estimated to be valued at US$ 58.33 Billion in 2024 and is expected to exhibit a CAGR of 12% over the forecast period 2024 to 2031.

Key players operating in the automotive aluminum market include Alcoa Inc., Arconic Inc., UACJ Corporation, CHALCO, AMG Advanced Metallurgical Group, Norsk Hydro ASA, Constellium N.V., Novelis Inc., and Rio Tinto Group. Aluminum helps auto manufacturers comply with stringent emission norms by reducing vehicle weight, resulting in improved fuel efficiency. This is a major factor driving the increasing use of aluminum in the automotive industry. The growing demand for lightweight vehicles to improve performance and comply with emission regulations has resulted in increased adoption of aluminum across various vehicle components.

The increasing global vehicle production is another key factor propelling the growth of the automotive aluminum market. Various developed and developing countries are witnessing rising disposable incomes and spending power of consumers. This has increased the sales of vehicles worldwide, thereby augmenting aluminum demand from the automotive sector. Furthermore, stringent emission norms and fuel-efficiency standards in countries such as India, China, the U.S., Germany are prompting automakers to focus on lightweight materials such as aluminum. This is expected to drive market growth during the forecast period.

Key players operating in the automotive aluminum market are focusing on global expansion into developing countries with high growth potential through partnerships, joint ventures, and new production facilities. For instance, in June 2020, Novelis partnered with GARMCO, a lithium-ion battery technology company, to supply aluminum for battery enclosures used in electric vehicles. Such strategic moves are helping key players boost their geographic footprint and aluminum sales volumes.

The growing popularity of electric vehicles represents a key trend in the automotive aluminum market. EVs use significantly more aluminum than internal combustion engine vehicles owing to large battery packs and electronics. Major automakers are increasing investments in EV development, which is driving the demand for aluminum from the e-mobility sector. Furthermore, the rising adoption of advanced production technologies such as 3D printing is also supporting market growth as it enables the production of complex lightweight automotive aluminum parts.

Porter’s Analysis

  • Threat of new entrants: New automotive aluminum manufacturers face significant barriers to entry due to high capital investment requirements for aluminum smelting facilities and established relationships between existing aluminum suppliers and automakers.
  • Bargaining power of buyers: Large automakers have significant bargaining power over automotive aluminum suppliers due to their high volumes and ability to source from multiple suppliers globally.
  • Bargaining power of suppliers: A few global suppliers like Alcoa and Constellium dominate the market, giving them pricing power over automakers. However, growing aluminum recycling could increase supply sources over time.
  • Threat of new substitutes: Other lightweight metals like magnesium and carbon fiber are growing as substitutes but aluminum still has advantages in terms of price, properties, and recyclability that maintain its role in auto bodies and components.
  • Competitive rivalry: The global automotive aluminum industry has only a few major suppliers serving a concentrated set of automaker customers, leading to intense competition on price, quality, and engineering/technical support.

Geographical Regions

North America dominates the automotive aluminum market at present in terms of value due to high consumption in the United States, driven by the region’s large automotive manufacturing industry. However, the Asia Pacific region is expected to see the fastest market growth over the forecast period as countries like China and India rapidly expand their domestic auto industries and aluminum production capacities.

Another key geographical region is Europe which, while more mature than emerging markets, still represents a major market for automotive aluminum supported by increasingly stringent fuel efficiency and emissions regulations driving greater aluminum usage among automakers based in Europe.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it