Weight-conscious automakers turn to new advanced steel

As North American automakers put their vehicles on a weight-reduction plan, they are turning increasingly to a new generation of advanced high-strength steel.

The average vehicle built in North America contains 151 pounds of advanced high-strength steel, up from 111 pounds in 2007, according to data compiled by Ducker Worldwide, a consulting firm in suburban Detroit.

Dick Schultz, Ducker's managing director, predicts automakers will increase usage of advanced steel 10 to 15 percent annually over the next five years or so. The stronger varieties of steel allow automakers to use lighter structural components.

What's the practical limit? Schultz expects usage will top out at about 450 pounds per vehicle. That would be more than half the weight of a typical vehicle's body, bumper and doors.

Right now, Honda Motor Co. and BMW AG are considered industry leaders in the use of advanced steel. But Schultz says all the automakers are making more use of it. "It's fair to say there were early adopters," Schultz said. "But everybody is catching up."

'New steel'

Schultz prefers to call the new varieties of steel "new steel," to differentiate them from the first generation of high-strength steel that has been around for years.

In the 1990s, the steel industry began to promote new steel as a way to reduce vehicle weight and improve a vehicle's crashworthiness.

Steel makers produce it by adding small quantities of alloys -- such as manganese or molybdenum -- then heating the metal above 1,300 degrees Fahrenheit. The result is hardened steel that still has enough "give" to be shaped by a stamping press.

One of the first automakers to make use of advanced steel was BMW, which now uses it in all its models. The 7 Series uses roughly 400 pounds of it per vehicle.

A steel Odyssey

Honda Motor Co. -- North America's second-largest user of advanced steel -- made extensive use of it in the redesigned Honda Odyssey minivan. Fifty-nine percent of the Odyssey's steel is advanced steel, up from 35 percent in the previous version.

Honda's engineers used advanced steel in the A- and B-pillars, bumpers, roof, doors and some body panels. Perhaps Honda's most creative use of new steel is in the front-end body structure, to improve crash protection.

In the Odyssey's front end, a polygon-shaped frame disperses the impact of a front-end collision through the floor frame rails, side sills and A-pillars. By contrast, a conventional vehicle would channel all of the impact through the lower load-bearing rails.

With the exception of the Element and Ridgeline, all of Honda's North American models have been given this polygon frame, which the company calls "Advanced Compatibility Engineering."

Pickups next

Schultz predicts industry usage of new steel will rise substantially as automakers redesign their full-sized pickups. For example, General Motors Co. is redesigning its 2014 Silverado and Sierra pickups.

Since GM's light-duty pickups last got a redesign in 1999, that represents a major opportunity for makers of new steel.

GM already is making the switch to new steel. The American Iron and Steel Institute estimates GM will use more than 120,000 tons of advanced steel this year, up from 40,000 tons in 2006.

Who will benefit? In North America, the market for automotive steel is dominated by United States Steel Corp., Arcelor Mittal, Nucor Corp., Severstal North America, a unit of Russia's OAO Severstal, and AK Steel Corp.

Severstal North America President Sergei Kuznetsov: High-strength steel "is going to be a big play for the steel industry."

Investing in steel mills

While auto production still remains below pre-recession highs, steel makers are investing huge sums to renovate old facilities and build new ones.

For example, German steel maker ThyssenKrupp AG has spent $3.7 billion to build a processing mill in Mobile County, Alabama. The plant, which was completed this year, will convert slabs shipped from Brazil into sheet metal for exterior body panels and other components.

OAO Severstal, which purchased the assets of bankrupt Rouge Steel Co. in 2004, also is spending big to upgrade its facilities. The Russian steel maker has spent $1.4 billion to buy and renovate Rouge Steel.

Severstal provides more than 10 percent of the flat-rolled carbon steel used by North American automakers for body structures and enclosures. Now the company wants to expand its market share, Severstal North America President Sergei Kuznetsov said in an interview with Production Line.

While Severstal's investment has been huge, Kuznetsov said it was essential to establish a presence in the automotive market.

High-strength steel "is going to be a big play for the steel industry," Kuznetsov said. "Automakers are going to have to meet fuel efficiency standards, and weight is a big issue. That's where we believe the industry is going."

You can reach David Sedgwick at dsedgwick@crain.com.