Seoul, South Korea - About four years ago, Hyundai considered shifting from steel to aluminium body parts for its Genesis sedan to make it lighter, more fuel-efficient and more competitive with German luxury marques.
Its affiliate Kia made a similar move, building test versions of its premium K9 sedan using aluminium in body panels including the doors, bonnet and boot lid.
But both opted for steel instead, deterred by the cost and, apparently hamstrung by close ties with sister company Hyundai Steel Co.
As Audi and Ford lead the way in using aluminium, which is lighter but more expensive than steel, their Asian rivals are reluctant to invest in the costly retooling required that would disrupt existing manufacturing processes and supplier relationships.
Truls Thorstensen, president of EFS Business Consultancy, commented: “A really big challenge at the moment for the Asian companies is to find out how they should behave in this context of vehicles coming under pressure to be lighter.
Asian carmakers usually prefer evolutionary upgrades that enable them to use existing plants and make multiple models on the same assembly lines; western rivals tend to make wholesale product changes that require re-engineering of factories. That's forcing Asian car companies to find other ways to cut weight and emissions as tighter US and European fuel economy and emissions rules drive a push for lighter cars.
Thorstensen said: “If you are free to do whatever you want, the decision might be easier to go in the direction of aluminium or light weight.”
Aluminium demand by Asia's auto industry is expected to rise 71 percent by 2016, far below a projected five-fold jump in North America, according to an internal forecast by Atlanta-based Novelis Corp, the biggest maker of flat-rolled aluminium.
It predicts that by 2016 Asia will account for less than a tenth of total auto industry aluminium consumption, while North America and Europe will have about 45 percent each, despite expectations that Asia will continue to account for more than half of global vehicle output.
Charlie Durant, a senior consultant at metals consultancy CRU, said: “This substitution from steel is being driven mainly by strict emissions regulations, especially in North America, and is a game changer for the aluminium rolling sector.
“In Asia, the emissions regulations are less stringent and vehicles tend to be much smaller.”
“The relative cost of aluminium sheet is seen as a prohibitive factor, so it's in regions with the most stringent legislation that this material will be most widely adopted,” he added.
European luxury brands are expanding their use of aluminium in high-end, high-margin cars, while Ford will begin building its flagship F-150 pickup with an aluminium body later this year, making it the first such mass-market vehicle.
Asian automakers, however, mostly produce mass-market cars on highly efficient assembly lines that are often decades old. They don't sell luxury cars in high volumes and can't comman the sorts of prices that Audi and BMW can.
Aluminium can cost some four times more than steel, although it’s as much as 30 percent lighter than conventional steel and 15 percent lighter than advanced, high-strength steel - but a switch to aluminium increases not only materials costs but requires heavy investment to overhaul production lines.
The previous version of Hyundai's Genesis had an aluminium bonnet, but the company switched to steel for the current model, launched in late 2013, making it heavier and less fuel efficient than its predecessor.
An aluminium bonnet weighs about half of one made of steel; every 10 percent reduction in vehicle weight improves fuel economy by six to eight percent, according to the US Department of Energy.
In 2010, when Hyundai began developing the current Genesis, shaving weight and increasing fuel economy was a concern.
Engineers proposed expanding the use of aluminium from the bonnet to other outer body panels and even frames, but the company went the other way because of its ties with Hyundai Steel and the higher costs associated with aluminium.
The new Genesis weighs 177kg more than its predecessor - and 82kg more than BMW's rival 535i.
Hyundai US chief Dave Zuchowski said Hyundai had “put a lot of additional weight into structural rigidity” to pass tougher US crash tests.
“We used to say we'd like to reduce the weight in the car 10 percent as we bring them out,” he said. “In this world, with crash requirements and things like that, you're not going to be able to do that.”
Instead of going to aluminium, Asian automakers are working with steelmakers to develop lighter, stronger steel, while taking other measures to improve fuel efficiency including upgrading conventional engines and parts without having to make heavy modifications to manufacturing facilities.
Hyundai Steel CEO Woo Yoo-cheol said: “Hyundai is under enormous pressure to cut costs since it's a volume, mass-market carmaker, and they believe it is much more competitive to use steel for their flagship models.”
For now, Japanese carmakers limit aluminium mostly to parts of hybrid and premium vehicles, while Nissan is expanding the use of high-tensile steel, which is stronger and lighter than conventional steel, in up to 20 percent of parts installed in its new production models starting in 2017.
Asian automakers stick with steel partly because it’s plentiful, with two-thirds of global supply made in the region.
Novelis will complete an auto sheet plant in China late this year and is getting plenty of inquiries from Asian automakers about using aluminium, although it predictcts it will take four to five years for Chinese automakers and two to three years for Korean and Japanese firms to use it in significant amounts.