by The automotive aluminum market has been gaining significant traction over the past few years owing to the growing need for lightweight materials in the automotive industry. Aluminum helps reduce the overall weight of vehicles, thereby improving fuel efficiency. It is a preferred material for making engine components, wheels, doors, and other exterior body parts of vehicles. The growing demand for passenger cars and commercial vehicles across the world has led OEMs to increasingly adopt aluminum over conventional steel.
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 of 2024 to 2031.
Key Takeaways
Key players operating in the automotive aluminum market are Alcoa Inc., Arconic Inc., UACJ Corporation, CHALCO, AMG Advanced Metallurgical Group, Norsk Hydro ASA, Constellium N.V., Novelis Inc., and Rio Tinto.
The rising demand for light-weight and fuel-efficient vehicles offers significant growth opportunities for aluminum suppliers. Many countries are offering subsidies and tax benefits for EVs, which is expected to boost the adoption of aluminum.
Global vehicle production is estimated to increase sharply over the coming years, especially in major emerging markets like China and India. This will drive the demand for automotive-grade aluminum from OEMs globally. Many aluminum producers are investing heavily in expanding their production capacities to cater to the growing needs.
Market drivers:
Stringent emission regulations aimed at reducing vehicular CO2 emissions are a major driver for the increased use of aluminum in automobiles. Aluminum helps automakers comply with emission norms more efficiently as it leads to substantial weight reduction. The average aluminum content per vehicle has increased from 220 pounds to over 330 pounds in recent years. Major automakers have ambitious electrification targets for the next decade, which will further elevate the importance of lightweight materials like aluminum.
PEST Analysis
- Political: Domestic policies and trade policies determines growth of aluminum usage in automotive industry. Trade wars and tariffs can impact trade dynamics.
- Economic: Rise in disposable incomes globally is driving demand for personal vehicles usage aluminum improve fuel efficiency and reduce weight. Rise in GDP increases automotive production and aluminum consumption.
- Social: Demand for lightweight and efficient vehicles is rising concerns for reducing carbon footprint and environmental protection. Aluminum allows building of fuel efficient vehicles aligned to social values of sustainability.
- Technological: New aluminum alloys and production processes allows improved strength properties facilitating greater aluminum usage in under-hood components and body panels over traditional steel. Use of recycled aluminum through closed loop production systems reduce costs and improve sustainability.
The geographical regions where the automotive aluminum market is concentrated in terms of value include North America, Europe and China. North America and Europe are established markets with major automotive manufacturers focusing on replacement of steel with aluminum to meet stringent fuel efficiency and emission norms. China is the largest and fastest growing market for automobiles where government support for new energy vehicles and light weighting is driving increased aluminum usage.
The Asia Pacific region excluding China is the fastest growing region for the automotive aluminum market due to rapidly expanding automobile production in countries like India, Indonesia, Thailand and Vietnam coupled with growing preference for passenger vehicles. Rising income levels and building of manufacturing capabilities by OEMs and aluminum producers in the region are contributing to its rapid growth rates above global average.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
